The average total posted tuition charge for a 124-credit undergraduate degree is $109,172 with a net tuition charge after financial aid of $63,172, according to College Board data for
2009-10.  While the total amount seems to be modest, the balance is often paid from a family’s discretionary income and by taking loans.  Since discretionary income has not kept pace with the rise in tuition rates, students are taking on ever larger amounts of debt to finance their degree.

If we focus solely on those students who seek a degree so that they can immediately go to work, the financial problem is how a student can purchase a degree that imposes the smallest debt load and debt service on future income.  This question is particularly acute for first generation students who are going to college on a shoe string.

Given the cost of education to students and their need to reach payback on their degree, many graduates have found creative ways to reduce the cost of a degree and to speed up graduation.

This blog examines several options that students have in purchasing a degree and completing their degree in a shorter period of time.

Option One:  Community College Plus Four-Year College (2 Plus 2 Option)

The 2 Plus 2 option has become generally recognized as a means of reducing the cost of a degree.  This option reduces the average total net tuition of a bachelor’s degree 41% or $26,160.  This option alone could substantially reduce the debt load on first generation students so that they have the chance to build assets and afford a reasonable life style.

Many colleges allow for frictionless transfers (all associate degree credits go toward completing the first two years of a four-year degree) from a community college graduate’s
transcript.  However, there is stil resistance from some faculty, in particular in accepting all the credits, which means that many community college graduates lose many hard earned credits during their transfer, thereby increasing the cost of their bachelor’s degree.  Colleges are becoming more accommodating, but college presidents should press their faculty to move to frictionless transfers.

Option Two:  Credit Bundling

Credit bundling is new and is currently being managed by students and not by colleges.  In this model enrolled students take courses at other colleges that slot into the course requirements for their curriculum.  The other schools could be community colleges, public institutions, or continuing education programs; some students pursue CLEP credits.  Often these courses are less expensive than the day program courses at their home institution.  Another advantage for students is that they can compress the time needed to graduate so that they can gain the financial advantage of earning money sooner.

Option Three:  Integrating Work and College

The work and college option uses the concept of converting work experience into course credits.  It is too often ignored by traditional degree programs or the conversion process is so disparaged by the faculty that students are discouraged from the opportunity of earning credit based on their work experience.  It is condescending to assume that the work performed by student at their jobs fails to match the rigor of college work.  Many jobs require considerable training and diligent work to be performed at a satisfactory
level.  In addition, work in most cases is continuously supervised and evaluated to make sure that the student employee performs their job at the highest level.  Colleges should develop programs to make the conversion process accessible to working students and provide a reasonable and predictable method of work evaluation.

Another route that some working students may already be using is to integrate distance education, credit bundling, and work conversion.  Students in their desire to move to the next level in their life will become more adept at adopting and finding new ways to complete their degree expeditiously.

What Stevens Strategy Can Offer

It is readily apparent from the press, government reports, and other sources that parents and students are looking for colleges to reduce the cost of education and thereby reduce debt loads on students.  Presidents, who recognize that their students can find creative ways to complete their degrees in a cost way that inculcates the necessary skills for their degree and career, will lead the way in finding new markets for their college.  A well defined strategy and implementation plans can put the college in the lead in its competitive market.  Stevens Strategy has the skills and experience to work with presidents to facilitate strategies and plans to support students as they seek to graduate with the lowest cost to themselves.  Contact Stevens Strategy at [email protected] to find out how Stevens Strategy can get your college in front of your competition.

Michael Townsley, PhD

Senior Consultant, Stevens Strategy