Disruption may be coming (at last)

A while ago, I wrote a guest blog post on the Washington Post, about using Google to manage the American college and university application process.  I got some good response to it: A lot of people thought there was some merit to the idea; some thought I was crazy, and many suggested that this was an example of the “McDonald’s Syndrome.”  That is, when you get into one of those situations at work where everyone wants to go to lunch, but no one can offer an idea, you simply say, “Let’s go to McDonald’s.” People are suddenly inspired to come up with something better.

I still believe the whole college selection process is–at least from my standpoint–backwards: Price is often the last consideration for many families, because it’s the most mysterious part of the process, on purpose. This hit home with me earlier this spring, when I sat down with a neighbor and her extraordinarily high-achieving daughter, who had six admissions but wasn’t sure they could afford any of them. Something seems wrong.

As I was thinking about this on my long train ride into the city this week, I recalled a conversation in the late-1990’s with Tedd Kelly, who was the founder of CERR, the Consultants for Educational Research and Resources. Tedd recognized that the way we do college admissions was backwards, because cost is the last thing that gets decided. (In fact, we purposely tell most students we can’t tell them the cost until April, after they’ve completed a FAFSA.)  Tedd set up a website and a business called “ECollegeBid.”  Students could indicate their profile, and how much they were willing and able to pay, and colleges could accept their offer to get them to enroll. Cost was right up front; the details flowed from it.

It was a disruptive idea that is like almost all disruptive ideas in Higher Education: It never seems to work when it comes from the inside, because the disruptors have too much to lose.

But as we go through another year of angst and agony about admissions, and now about financial aid and affordability, true disruption may be coming from another source: The Federal Government.  I’m not sure anyone I’ve talked to has considered how truly disruptive the prior-prior year (PPY) proposals could be.

The current financial aid process requires parents to complete the FAFSA in the spring of the senior year of their child’s high school education, after applications have been filed. It’s always a mad rush, and often must be completed before the parents have their taxes completed, which makes the results tentative.  If you’re applying for Fall 2014, you use 2013 income data.

With PPY, you’d fill out that form in the student’s junior year, any time you can, and almost always after taxes are filed.  You could get the FAFSA (or Profile) results before senior year begins.  You could talk to colleges about costs very early, even before applications are filed.

This could be very good for students, of course:

  • It could erase most of the uncertainty for parents.
  • Students might be surprised by the range of options available to them in the end; many students end up paying about the same at private colleges as publics, but never find out because of sticker shock.
  • It could radically revise the way in which merit aid is used.

But it could scare the daylights out of colleges. Consider what might happen:

  • Students wouldn’t have to apply to as many colleges to ensure they have an affordable option because they’d know costs up front.
  • Applications would fall, and colleges who define themselves by a low admit rate might struggle to make sense of the new reality.
  • Cost becomes an important part of the consideration process in ways it never has before, as most rational people think it should be.
  • Yield projections would be difficult if not impossible in the first couple years. Colleges would not know how many students to admit to make their class.
  • It would be difficult to work with parents who have income that varies wildly from one year to the next.
  • But most important, one of the most sacred of all the sacred cows–the May 1 Candidate’s Reply Date–might be a thing of the past.

Imagine that: If you no longer have to wait until May 1 to know final costs, colleges could institute several application cycles, and insist on earlier deposits: A sort of multiple Early Decisions on steroids.  As spots become filled in each cycle, fewer are available in the next.

Is this frightening?  Suppose we had always done it this way, and I suggested we switch things around, and make cost a total mystery until a month before you have to decide?

Tell me what you think. What else might be the unintended consequences of PPY?

12 thoughts on “Disruption may be coming (at last)

  1. Jon
    As someone who spent more than 30 years in admissions, I actually think everyone wins. Colleges can speek with confidence about cost to prospective students – therefore move more quickly to all of their offerings that students can measure for fit…curriculum, internship opportunities, student life, sports, etc. We’d remove some of the angst and replace it with opportunity to develop decision making skills. Open up lines of communication between parents and students. Students will feel more comfortable with their decision and this can lead to increased retention.


  2. It is definitely a fascinating prospect and a first attempt at demystifying a process that needs to be demystified. My concern is around the prospect of multiple application cycles where fewer students may be admitted with each round. This could detrimentally affect transfer students that tend to apply later in the cycle (which makes sense for them–they may just be starting at a new institution or beginning their second year and transferring is not in the forefront of their minds). With the rise in students attending community colleges, transferring is common place, and we are talking about academically skilled, bright students. Transfer students are already an afterthought at many colleges and I would hate to see this become more of the case because they have so much to add to a college campus (maturity, leadership, high matriculation rates).


  3. Whoa! What an amazing idea! It’s always puzzled me why families have to wait until so late in the process to deal with cost. I’ve been thinking just about having a common FA letter; this is much more comprehensive and, yes, disruptive. But could be a big boon for those most cost-sensitive. Those are my initial reactions. Let’s get this discussion going. (I particularly like the comment about how difficult it is for insiders to propose these things…)


  4. Jon,

    Interesting concept and just another point that education is moving the wrong direction. Most other business are minimize there exposure to lengthy supply issues and have moved to an on demand inventory model. Now education is going to look an entire year backward. Good luck to financial aid offices. I thoght an education was to improve a person knowledge and not move backwards.

    We have the net price calculators to minimize this risk. Granted the quality varies but it is better than before. This is PPY idea is just another concept that may work because the net price calculators are not being used or understood by the parents.

    In reality I think it is a few other things that cause this problem:

    1. Lack of financial literacy on both the parent and student side. This decision is one of the on complicated personal financial decision a person will make when you factor all of the inputs. (EFC, Financial Aid, 529 Plans, Various student loan options, Education Tax credits, …)

    2. Marketing from the Colleges is a big issue. Most schools promote students to apply and the college state that they have plenty of financial aid. This helps the colleges in two major areas: increase selectivity rating for the ranking systems and allow them to cherry pick the best student they want to complete their class profile. The down side is it creates an enormous amount of hope in the students and families. Your statement about your neighbor is a perfect example.

    3. Colleges reacting to students expections and the college experience. I think many families have lost the practicality of an education and the reasons why you are attending college. Schools have built the plush dorms and various facilities to create an educational experience. At the same time graduation rate are declining. We have minimized the expected outcome of an education in the decision process and have focused on the experience.

    I could go on but I do agree we need to have a disrupting event for all involve colleges, students and parents. I do not know what it is but I hope that this isn’t it.


  5. Demystifying is a good thing. Especially with all of the talk and media exposure concerning the fact that a huge percent of students/families never pay sticker prices. Why even have sticker price? It has become like buying a car – the listed price is ONLY a starting point. The possible different admission dates/cycles, however, would probably get very crazy. We on the high school side would have to use all of the time we saved explaining college costs and use that time explaining all of the dates and admissions options. I see a lot of colleges going hot and heavy after 11th graders since that is the prior year.Students might know before school starts in 12th grade where they will be going to college. Like your Google idea, there should be a financial aid/college cost clearinghouse somewhere, but then so many colleges might lose their prized individuality.


  6. The challenge for a family is to determine ‘fit’ when building a strong college application list. This includes academic, social, and financial considerations. Currently, it is almost impossible for most families to predict which schools are more likely to be a financial fit because of the calendar issues you point out, and this solution will go a long way toward solving that critically important piece of the puzzle. There will still be many factors to evaluate during the college search because of our rich and diverse higher ed landscape. But understanding the true cost of potential schools on the front end would ensure that many more people end up at an institution where they’ll thrive.


  7. I think this would be a great idea. It is difficult to compare the value of any particular college / university because it is more than simply the cost. Just like buying a house or car we all value different features. But, I think it would be very helpful to families to be able to talk about the financial aspects early on. Universities should not be afraid of the transparency because they still have their own distinctive characteristics – be it programs, facilities, sports, etc. – to provide value to the student.


  8. I think it would be helpful in general, but creating more admissions cycles will still help the affluent more than the disadvantaged. The admissions system needs to be easier to navigate for first generation students and more difficult to manipulate for the wealthy.


  9. >Price is often the last consideration for many families, because it’s the most mysterious part of the process, on purpose
    True. Compare this to the process of buying a house. Families don’t buy a house and then figure out how to pay for it. In most cases, house buyers are pre-qualified with financing lined up first.


  10. Thanks for posting this and starting the conversation. When I put my citizen and educator hat on, I think this is great for families. When my VP and Dean hat is on, I agree with you and see this turning selective, private college admission on its ear.

    If the Feds get their act together (yes, I know), they will deliver the FC to the family instantly when the parent clicks submit on Turbotax. That really should be pretty easy. So, by February or March of the junior year a family will know their FC and start to narrow their options from that point. The information gathering process takes time and thought. Students and parents may be earlier informed, but I am not sure they will be better informed.

    The problem for private colleges is that they will not have had a chance to build their cases before families draw financial conclusions. Colleges will be pressured to make their cases to students earlier and to make offers of scholarship and aid earlier. Students will likely feel pressure to make earlier decisions from colleges, parents, each other, and the media. Think Ivy League “likely letters” for everybody from more and more colleges.

    Like anything, there will be new advantages and disadvantages. Colleges will respond creatively. Disruption is a good word for what is likely coming.


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