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Mid-Market for Private Admissions Help

July 29, 2010

The Princeton Review, which is best known for its books on the college application process and its test-prep courses, is today announcing a new business line. The company will offer online courses -- for $70-$200 each -- on parts of the college application and financial aid process.

The idea, the company says, is to offer information and services that families feel they may not be getting from high school guidance counselors, but priced for those who can't afford private counselors. Some experts on admissions see the announcement as a possible arrival of a new middle market in private counseling for a broader range of families. But some of those same experts say that society would be better served by providing more support to high school counselors.

Today's announcement follows earlier moves by Princeton Review to broaden its role in higher education. Last year, Princeton Review (in a diversification strategy in some ways similar to that of its rival Kaplan) purchased Penn Foster Education Group, which offers online associate and bachelor's degrees in career-related fields. The move shifted the company from coaching test takers and producing guidebooks to providing more formal education. The announcement today will be another addition to the company's services.

Rob Franek, senior vice president of Princeton Review and lead author of its annual Best Colleges guide, and Kal Chany, author of Paying for College Without Going Broke, will be instructors for the online courses. Topics include "How to Conduct an Effective College Search" (two sessions of two hours each); "Essay Writing Workshop," (one session of two and a half hours); "Completing the FAFSA" (on the federal aid application, three two-hour sessions); and "Understanding Your Financial Aid Offer" (one two-hour session). Students will be able to return to sections they want to watch more than once.

In an interview, Franek said that "the target audience are those students and parents not fully getting the college content and guidance they need." He said surveys by the company have consistently found large numbers of high school students and parents who worry about whether they can find a way to afford a higher education and to understand the application and aid process. "We knew a market existed for very clear guidance," Franek said. And he stressed that the content would be notably different from the material the company sells in its various guidebooks.

While many high school counselors provide just this sort of information, the company's announcement will note the growing ratios of students to high school counselors that mean that many students don't get the attention they would like (or that counselors would like to provide). Many of these students aren't wealthy and "we wanted to keep the price points palatable for the average students and their families," Franek said.

Mark Sklarow, executive director of the Independent Educational Consultants Association, the largest group of counselors who are hired by families, said he was not surprised by the Princeton Review's move. He said it made sense for the company "to maximize its place" in the education consulting field, which is growing rapidly. He said he thinks that college advising outside of that provided by schools may follow a pattern seen in test-prep services. The early years of test prep featured books and courses, and the industry evolved to include free materials (these days mostly online) and extremely expensive one-on-one tutoring services.

With parents clearly interested in getting more than they can from their children's high schools, private counseling may soon see a similar range of options. "When a kind of business proliferates, new delivery models come along at different price points," he said. (Franek declined to say whether Princeton Review might expand beyond courses to direct private counseling, but he called today's announcement a "first step.")

The Princeton Review's courses would definitely be less expensive than most private counselors -- even if most of them don't charge the tens of thousands of dollars that the high-end services do in major metro areas. Sklarow said that the average fee of his members is about $160 an hour and that the average package involving services covering a period of identifying colleges and applying is about $3,800.

While Princeton Review will have a price advantage (since most families don't buy just a few hours of private counseling), Sklarow said that courses would provide only part of what his members do. Counselors offer their clients "knowledge of process" (how admissions and financial aid work) and also "individualized knowledge" (based on what the counselors have learned about their clients and colleges). Sklarow said that online courses could only really help with the process part of the equation.

Still, he said he welcomed the new service. "Anything that brings information into the hands of kids, and in a way that they can afford it, is a good thing."

To date, only one large-scale private counseling business has focused on a business model that works for families of modest means. College Coach provides seminars and a range of services on admissions and financial aid -- and the company has sold its services to employers to offer as a benefit. As a result, the company's services are available not only to help the CEO's kids, but those of the lowest-income employees in the organizations. Stephen Kramer, co-founder, said that College Coach shows that "there is a mass market for this information" in that many employees whose salaries would make them unlikely to hire a counselor use the services when offered. "People want information and will participate when we level the playing field" in terms of fees, he said.

But Kramer said his experience also suggests that it may be a tough sell for families without much money. Even at prices well below what a private counselor would charge, "I think there will be an affordability hurdle for many families," he said.

Admissions officials were skeptical of the need for the new service. Jim Miller, coordinator of enrollment research at the University of Wisconsin-Superior and president-elect of the National Association for College Admission Counseling, said that there are indeed families who want more information than they are getting, especially in high schools where counseling positions aren't adequately staffed. But he said that the main problem about college information was its lack of organization, not that it doesn't exist. "Will people be charged for information they could get for free?" he asked.

Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers, said he shared that fear. To the extent that families feel a need for more information about applying to college and getting aid, there is a message for higher education. "Shame on us that we have created this situation," he said -- that is, that families don't feel they can get the help they need through free resources from schools and colleges.

"We've made everything much too complicated," he said. And he added that the students who most need extra assistance are in the lowest-income schools, where the pressures on guidance counselors are the greatest. But these are the students, he said, who won't be able to afford even modest fees. "There aren't enough counselors to really pay the level of attention that many students need," he said, "but that doesn't translate in my mind into needing a commercial alternative."

 

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