Here’s a personal finance pop quiz with an extremely high success rate.
In what industry do so many customers only know the price after requesting the privilege to make the purchase?
The answer, of course, is higher education. This business of selling and buying undergraduate degrees is a tricky one, and college buyers are increasingly looking for more price predictability and granular data to evaluate the offers students get.
When they can’t find satisfactory decision-making tools, parents come up with solutions on their own. Based on data in shaky government databases and obscure jargon-laden school revelations, they organize the information in spreadsheets or tools that they make available online.
Data may not predict the exact price of attending a particular university, and a single number usually won’t make such a big decision. But it can spur a reframing of the shopping process and a decent level of skepticism.
“Ideally, data encourages people to ask the right questions,” said Leigh Moore, former dentist and math teacher, mother of three, and founder of Moore College Data.
Here are four resources worth checking out if you’re still making up your mind — or preparing for years to come.
PRICE: $50 to $125.
PAIN POINT: Any list of colleges someone applies to is, in part, the answer to two questions: Can I get in and can I afford it?
When George Fan, a technology industry veteran, and his family first approached the process, they knew what they didn’t. And his data-driven brain couldn’t resist creating spreadsheets to keep track of the knowledge they gathered.
The final result was College Kickstart, now a small company that Mr. Fan describes as a passion project gone wild.
Perhaps the smartest feature is the letter grade it assigns to the list of schools you are considering. Using recent admissions data and your own grades and test scores, it gently assigns labels to schools, such as “reach” or “likely.” Most students — and parents who had an easier time getting into college when it was less competitive — overestimate their chances. College Kickstart encourages them to adjust their mix if there are too many long-running colleges on the first list.
Mr. Fan then presents data and commentary on both need-based aid and so-called merit aid, which is a list price discount that even the wealthy can get. That saves parents from having to study the topic to get data from many websites.
“Half the battle is just trying to discern what data is useful, rather than feeling like you have to sift through everything,” he said. “And that’s why you see a cottage industry of frustrated parents feeling hurt and taking action.”
THERE MUST BE A LAW: Most data vendors have a wish list of things they’d demand colleges reveal if they were in charge. Mr. Fan would like all colleges to release their latest so-called Common Data Set – a rich collection of information about prices and other things – every December.
“I know they will never share the admission rate for a male Asian in California who applies for STEM,” he said. “But all the families are just looking for some transparency in the process. ‘Am I competitive? Can I afford it?’ It would be a real help.”
PRICE: Free.
PAIN POINT: Ms. Vallab’s household income is so high that her children would not qualify for needs-based assistance. But the earnings are also not high enough to comfortably pay full price for all of them, especially at private colleges.
“The colleges tell you, ‘Don’t worry, most people don’t pay the sticker price,'” she said. “But no one tells you what price they’re actually paying.”
All colleges are required to offer so-called net price calculators on their websites. If they’re accurate—sometimes they aren’t, if colleges don’t use good ones or don’t maintain them properly—they can give families a rough idea of how much needs-based help they could get. However, schools are not required to estimate how much help you can get.
So Ms. Vallab built a tool to do just that. It starts with various averages that the colleges publish on a little-known government website, then uses an algorithm to evaluate a list of prospective schools — and suggest others that might be more discounted.
THERE MUST BE A LAW: One problem with net price calculators is that you have to fill them in one at a time, often using the same data. Ms. Vallab believes there should be one universal that would spit out estimates for every school.
Moore College Data, created by Leigh N. Moore, mother of three in Prospect, Ky.
PRICE: $49.
PAIN POINT: Ms. Moore has worked as a dentist and math teacher and has done some college counseling over the years. But families’ need for the right data at the right time came to light when one of her kids was on his undergraduate orientation before classes even started.
Mrs. Moore was aware of a figure that showed a low four-year graduation rate for men at his college. A fifth year would mean piles of debt. So he went to the registry office looking for a rock solid plan to graduate on time.
“He came out white as a ghost,” said Mrs. Moore. “They had told him they didn’t think he would be released in four years.”
The pair eventually pulled the plug, and another school was still willing to offer him the same discount he had declined a few months earlier. Thus was born a company that tried to collect all sorts of things, such as graduation rates and crime statistics on campus, and pass them on to families.
“Good data should lead to good conversations,” she said.
THERE MUST BE A LAW: Ms. Moore wants the so-called grant letters that purport to explain an accepted student’s financial aid package to include a net price, or the bottom line that families will be responsible for after deducting grants from the list price but before choosing to take any out loans. Believe it or not, many colleges don’t present that figure clearly — if at all.
PRICE: Free.
PAIN POINT: “People have different approaches to dealing with anxiety,” Dr. O’Meara me via email. “Mine is to collect loads of data.”
As a professor in the department of ecology and evolutionary biology at the University of Tennessee, he’s used to understanding heaps of data, and the numbers he’s collected about the university are voluminous, including a lot of data on price and financial aid.
They are also a window into his own family’s needs. His kids care more about whether they live in a desert or a forest than whether sports teams are good, so he provides information about the weather and the biome. His daughter likes to see mountains around her, so he is puzzling out how mountains can present themselves in data that he will add to his collection in the future.
Health and social issues are also on his agenda, such as the availability of abortion and the risk of anti-transgender legislation.
THERE MUST BE A LAW: Dr. O’Meara would like more information on all forms of school misconduct.
He also wished there was more insight into student and alumni satisfaction. For him, average debts and salary are not enough.
“Someone can have a joyful, fulfilling life and make a difference as a social worker or an artist if they are paid decently, even if they are still making much less than an investment banker,” he said. “If all goes well, the university should launch someone into the life they want.”
