The current financial aid process requires a vast amount of time and effort from colleges, students, and the government. There is a lack of transparency hindering students from considering college due to their pessimism towards the exorbitant costs and their unawareness of financial aid options. This paper explores the factors that impact prospective students’ decisions to matriculate at Colorado College using a probability distribution model. With admissions data from 2009-2012, I will simulate a simplified rule in which 25% of family income is allocated for tuition and Colorado College pays the difference. Using this new rule, I will analyze the composition of students who are then likely to matriculate and determine the feasibility of the rule. This 25% rule eliminates a significant amount of stress, wasted time, and effort for all components of the financial aid process while maintaining a feasible amount of aid donations.
In the current market of higher education, skyrocketing tuition prices and unproportionally small increases in income are contributing to overwhelming amount of debt for recent graduates. Because of this, many question whether the benefits of a postsecondary degree still exceed the costs. Economists and policy makers alike attribute this deterrence to the complicated financial aid system and have proposed many ideas for simplifying the process. Motivated by this effort, this study uses Colorado College as a case study by utilizing a matriculation model with two years worth of admitted applicant data in order to investigate the possibility of the school changing its tuition model to being a percent of a student’s reported Average Gross Income (AGI). We found the optimal percentage to be between 18% and 19% because the class size and relevant demographics at these values remain relatively the same as under the traditional model.
Government-sponsored educational benefit programs for veterans have evolved throughout the years to meet the needs of military students. The growth of these programs has had a significant impact on schools’ growth and proliferation, and they are often considered partially responsible for the shift in cultural perception of post-secondary learning. As the value of a post-secondary degree has increased exponentially over the years, veteran benefit programs have evolved to meet the changing needs of veteran students. The relatively recent proliferation of for-profit colleges and universities is sometimes considered a threat to the effectiveness of these programs, as they aggressively target and recruit students with eligibility for these military benefits. In considering the subpar financial outcomes of for-profit schools graduates, we seek to determine the effects that the growth of these schools has had of the effectiveness of educational benefits for veterans. We find that receipt of veterans’ benefits increases the chances of enrolling at a for-profit school while limiting students’ satisfaction with the academic programs. Though the effects on deciding if and how to pursue higher education are negligible, the decreased satisfaction combined with the higher chance of enrollment at a for-profit school suggest a serious decrease in the effectiveness of these programs.
Projected increases in demand for postsecondary credentials in the labor market have exposed an immediate need for the United States to significantly increase its college attainment rate. The current growth rate of college tuition and fees, however, has been outstripping inflation for decades, and is limiting access for a growing number of would-be college students. Significant variance in college tuition and financial aid levels among states complicate the issue, having prevented researchers from finding the true indicators that govern college tuition levels. I posit that increased future earnings potential is one of these indicators causing tuition price variance throughout the U.S. Specifically, each state’s college wage premium – the amount a college graduate can expect to make over a high school graduate – causes its tuition prices through a supply/demand equilibrium. I hypothesize that the average public college tuition in a state is directly correlated with its college wage premium. Colleges in states with a high premium have a more valuable product and are able to charge more. I test this by collecting data from College Board and the U.S. Census Bureau on average college tuition and median-level college wage premium, and run a simple OLS regression to determine the strength of correlation. I then discuss my results in the context of the United States’ college attainment goals.