College Isn't So Unaffordable

You know all those newspaper headlines and television talking heads saying that college is unaffordable?

They're flawed, a new report argues.

Okay, so that's a significant oversimplification of the nuanced (and slightly tortured) arguments of "Is College Affordable? In Search of a Meaningful Definition," a white paper published Wednesday by the Institute for Higher Education Policy, a nonprofit research group. (Note: This article has been updated from an earlier version to alter the headline.)

But the paper does seek to gently challenge the emergent theme, embraced by many a higher education critic (and such tough-love supporters as President Obama), that colleges are pricing themselves out of reach of many Americans, who are burying themselves ever deeper in debt to try to afford a postsecondary education.

The authors, the economists Sandy Baum and Saul Schwartz, try to reframe the discussion about higher education funding away from questions such as what colleges are charging, how much of students’ and families’ incomes they are spending to earn their degrees, and whether increasing numbers of students are accumulating large levels of student loan debt.

Those are measures, they concede, on which the situation doesn’t look very good: “[M]any students and families have very real difficulties paying for college,” and postsecondary education “is an uncertain investment that does not pay off equally well for all,” especially for low-income students and particularly in a poor economy, they note.

But "although many students and families have very real difficulties paying for college, the perception of college affordability is often worse than the reality" because many people overestimate how much colleges actually charge and "do not understand the extent to which the net price they will actually pay is lower than the published price," the authors write.

Drawing (admittedly imperfect) parallels to health care and housing -- which Americans tend to think of (perhaps more than they do higher education) as "basic rights" -- the authors also argue that consumers and others should think of postsecondary education more as a long-term investment than as a good they consume. When viewed that way, they say, the idea of "buying" a higher education (through loans that one might pay off over a long time) can be equated to a mortgage or to health insurance, and assessments about affordability can look a little different.

"There are well-established and well-accepted institutional structures for paying for housing and health care over time -- but not for postsecondary education," they write. "Rather, education debt is widely considered an inappropriate burden. Paying for college is usually framed in terms of the annual out-of-pocket cost for the few years the student is in school, even though the benefits are enjoyed over a longer period.

"The difference is not so much in the nature of the expenditure as in the way it is framed," they continue. "It is possible that education would seem more affordable if people thought about it as a fundamental need and as an investment to be paid for over time, much as they think of housing."

Baum and Schwartz acknowledge, though, that many people do not view higher education that way, and that part of the reason may be that the benefits of going to college (the return on one's investment, as they argue for seeing it) do not accrue to everyone equally. "Even if the expected return is high enough to make the investment a good one, the risks involved in ending up on the lower end of the distribution of returns and being left with an unsustainable debt burden may make the investment unappealing to some potential borrowers," they write.

Governments have much more work to do, the authors argue, in leveling the playing field for those from lower socioeconomic backgrounds (who don't have as much parental help in paying for college) and in ensuring that students who borrow for college and cannot afford to repay their debts are protected.