<p>"The consumer psychology of perceived value (signaling) plus perceived gain (anchoring) explains why the formula of a high advertised sticker price followed by individual, less-publicized discounts is so popular in higher education.</p>
<p>"When the University of Chicago, say, advertises tuition of $43,581, the school is presenting its education as top-flight. Then, when an individual admitted student gets 40 percent off, she's thrilled — much happier than if she were simply charged $25,000 up front. She has 'anchored' to that higher number, which she takes as a sign of the value of her education.</p>
<p>" "People like this concept of a gain, whether it's real or illusory,' Rao says."</p>
<p>A SALE sign will always attract people. Seems that college pricing these days is similar to the tags you find on clothing. The tag will display the ‘suggested retail price’ which then has an impressive big red line through it. Underneath is the % discount and the final ‘great deal’ price. Funny thing…when this appears in certain print ads the fine print which says…no guarantee that item sold for ‘suggested retail’. </p>
<p>In the modified words of Forest Gump…gullible is as gullible does… </p>
<p>There have been other studies showing similar. A few schools are trying to lower their overall price for all (imagine what a balancing act they must go through each and every year across all applicants). I don’t know if they’ve been successful or not. JC Penny tried this strategy and it failed miserably. People love getting a deal. I’m sure some parents like bragging their kids got “money” so it might not be something that goes away anytime soon. </p>
<p>All I know is wading through this for the first time it all drives me crazy. There are some schools that are simply unrealistic financially for full price, but then you hear “this school gives lots of aid.” Well how much? What if your child doesn’t get enough aid? Should you even encourage them to apply? I’d give anything to know what the true price is and have schools stick to it. </p>
<p>Planet Money did a podcast on this recently. As long as there are people willing to pay the full price (and there are some at all the priciest schools), why not price the product that way and then offer discounts to draw the students they want and/or get as much as they can out of other students? There is no one “true price” for colleges, there are prices depending on your stats, special abilities or qualities, and financial situation.</p>
<p>@1sttimer125, spend some time with the net price calculators for each college (on their financial aid page of the website) to see what your true “need based aid” price might be. And review the merit scholarship page and the Common Data Set (Google ‘<college name=""> Common Data Set’) to see what the merit aid statistics look like. Then don’t apply to schools that aren’t affordable in terms of the need based side, or if you kid isn’t statistically likely to garner enough merit aid to make it affordable.</college></p>
<p>I think that the ‘discount sticker’ approach is also particularly confusing and off-putting for first-generation college attenders, kids from immigrant families and people from lower income groups. It takes an awful lot of time, research and energy to figure out what your price might conceivably be, and to game an elaborate strategy for getting the best price. (Kind of like it does to get the best price on an airline ticket – needing to watch the prices for a period of time, downloading various apps, getting a credit card and using points, etc.) </p>
<p>I know that my husband and I found it intimidating and between us we have 2 BA’s, 3 master’s degrees and a PhD. And we just had a conversation last night about how our daughter has found her dream school and we now need to find six or seven others which are similar, mostly so we can play off competing financial aid offers once she gets acceptances. (She’s not a great student and the colleges she is interested in are not super-selective, so it would seem logical to just have her apply to them, but we’re realizing how important gaming the system is, and also how random the outcomes seem to be, based on our son’s experience.)</p>
<p>My own admitted anecdotal evidence with our friends who are recent immigrants is that the kid says “how about Expensive Private College X?” and the parents look at the sticker price and say “No way. Why would we do that when Local College DOwn the Street costs Y?” and it’s difficult for them to grasp that the reward they may see in April as a result of the elaborate strategizing might be a lot better than just paying the sticker price at the local college with rolling admissions. I think that if you have less money to begin with you might appreciate the more risk-=averse strategy, and the ‘let’s try and get the best price on these airline tickets, er, college tuition’ strategy might seem a bit more like gambling, which isn’t very desirable when you can’t afford to lose.</p>
<p>I don’t see how people can decide it’s “gambling” if you aren’t really exposing yourself to loss.</p>
<p>I do think many people don’t like to fee that their lives are being determined by random forces, and they want to rely on things that are clear and understandable. And that stands behind the common keystone of a college admissions strategy – that you have to have an admissions AND financial safety, something you are reasonably certain will work no matter what. Once you have identified that option, of course, it’s fine to just take it. But it’s also fine to apply to what are perhaps more desirable colleges and to see how the stars line up.</p>
<p>It’s not gaming the system, by the way. The system is gaming you. Colleges don’t want to abandon the high, high sticker price because (a) a surprising number of really affluent families pay it, and (b) it signals high value to potential applicants/enrollees. And colleges can’t make up for lost revenue per student by enrolling more students – most colleges have a pretty strict limit on how many students they can enroll. A college that lowered its stated tuition by $20,000 would lose millions of dollars of tuition revenue from affluent students, and communicate that the education it provides has less value than that of its nearest competitors, and without creating any countervailing source of increased revenues. </p>
<p>So colleges continue to use an over-inflated stated tuition . . . and, by and large, unless you are very affluent yourself you really want them to continue that practice. So when you apply places that you would not be able to afford without a meaningful tuition discount and/or financing terms, you are going along with the system, not gaming it.</p>
<p>There was an article about how George Washington University did this. Prior to becoming one of the most expensive schools in the nation, GW was mostly a commuter school with an average academics. After one president decided to raise the tuition dramatically, many more people flocked to the school seeing this as an increase in “quality” after GW built many fancy new infrastructures with the increased tuition. One could argue that their academics haven’t changed that much, but the caliber of the students applying there has.</p>
<p>There are some private colleges that offer great education in certain areas and are very well known for great Merit awards.
However, I strongly believe that quality of person’s education depends primarily on this person and NOT the instituion. You can achieve the same results at any place and the final results is what counts.
So, I belong to the group who thinks that name of UG is only important if one wants it to be attachde to his/her name for the rest of theie lives. I do not see anything wrong with this goal. However, many others simply are not any pusuit of it, as my own D. simply summed it up (way back in HS, after graduating at the top of her class): " I will do fine anywhere". However, she never ciritizise people for choosing one place or another, she did not care and neither any of her friends most of whom currently are at Medical Schools. Apparently, self-relience has worked for them. some went to privates. others to in-state or OOS publics, 3rd to a local college and continue living at home to save money. Self-driven kids will be successful at any place. They did not car much about any rankings, the goal was to get them to a next step and it was accomplished.</p>
<p>Very true for some professions and not for others.</p>
<p>If you are aiming for med school, the very top (Harvard & Rice, but not many other elite privates) or a LAC with good advising or honors college where there is individualized advising at a public would be best. A top public or elite private that curves science classes (where you will be competing with a ton of pre-meds) would be worse.<br>
For a STEM PhD, a top research university or LAC or honors college would be best.</p>
<p>For MBB consulting or IBanking, go to their target schools.</p>
<p>For law or a humanities PhD, well, don’t go to law school or get a humanities PhD.</p>
<p>Well, specifically Med. Schools do not care much where one went to UG. They care about college GPA, decent MCAT score, medical ECs, not much more outside of these 3. Many will cut you if you have these stats below certain level and your diploma from Harvard will not save you. More likely than not, actually Harvard pre-med committee will not even wirte a letter for you if you are not making cuts. And your local home college that is completely unknown outside of your hometown might be just as good as going to Harvard if Med. School is in plans, and this will include top 20 Med. Schools. In addition, in terms of preparation for the Med. School, again, it is entirely up to a student, there is no difference based on the UG. In fact, D. has mentioned that the only beneficial preparation for Med. School is to have a Master’s in Anatomy. But those who have this degree are the ones who did not get accepted on theri first try. I know the other 2 examples - Engineering and IT. I do not know any other fields. So, I agree that some may require in fact to go to the very top, but not the 3 that I have mentioned.</p>
<p>@PurpleTitan: “For law or a humanities PhD, well, don’t go to law school or get a humanities PhD.”</p>
<p>I think that law is a profession where the ability of an individual – and personal relationships – can trump any institutional advantages (although going to a really good law school can be a big help). I have been practicing law for over 25 years, and based on my observations I would say that, as a rule of thumb, the top students at any law school are going to get jobs and do well for themselves irrespective of how highly or lowly ranked a law school may be.</p>
<p>@gandalf78:
That might be true, but law firms are willing to go much deeper in to the barrel at T14 (and especially T6) schools than generic law schools, and very few people actually know how good they will be in law classes before they begin law school. You don’t have slackers in any half-decent law school, so just being willing to work hard isn’t enough.</p>
<p>@MiamiDAP:
The main advantage of some privates is the quality of their advising. That’s why I’d recommend an honors college or some LACs over non-honors top public (where you are on your own) for pre-med, since you’d get access to advising and research opportunities. Also, while I know some privates do not write rec letters if they decide, my understanding is that Harvard does not practice that.</p>
<p>This is a very important topic. I just wish they hadn’t singled out the University of Chicago for this – they are nowhere near the top of the list as far as aggressively discounting pricing as a sales strategy. This is mainly a way for lower-tier private schools without national names to signal that they’re peers of the big dogs and then compete on price instead of reputation. </p>
<p>There’s nothing inherently evil about this; the main problem is that it makes it harder for families to predict admissions outcome and price without professional help. It is much tougher and more time-consuming to come up with a good college list with affordable “likelies” when the family will need merit aid.</p>
<p>@PurpleTitan: My reply to your comment was based, as I read this thread, on MiamiDAP’s statement that “Self-driven kids will be successful at any place.” That statement is true for law schools, based on my own experience and my observations of the profession over the last 25 years. </p>
<p>And I assure you that there are slackers in any law school, whether a “half-decent law school” or otherwise; good LSAT scores are mostly what get you in to law school, not being an anti-slacker. Further, the fact that a student is not in a Top 14 law school may have nothing to do with aptitude or ability, but rather is a function of the financial situation of the student.</p>
<p>By the way, are you a Tennessee Titans fan? I was wondering about your moniker.</p>