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Four years, two pieces of paper

9:21 AM  Sep 12th, 2013
by John Pulley

When Pat Hurley ’85 graduated from the University of Dayton, anything seemed possible. Almost 30 years later, the father of three college-age children has become an unwitting participant in a radical experiment conducted by his alma mater. He’s glad that he did.

“I feel better today than I have in the last couple of years,” says Hurley, who “started too late … and fell behind” in setting aside the savings he would need to send his kids to college.

Dayton’s experiment involves shining a light on that blackest of post-secondary education’s black holes: calculating and budgeting for the real cost of a degree. Most colleges provide families of prospective students with a partial estimate of the cost to attend the first year of college only, neglecting to fully disclose expenses not covered by tuition, room and board. A ProPublica report characterized undisclosed fees as “a kind of stealth, second tuition imposed on unsuspecting families.”

Instead of continuing to be part of the problem, the University is proposing a solution. For first-year students who enrolled at UD in the fall of 2013, the University promises that there will be no hidden fees, no increase in net tuition and no extra charges for textbooks — for four years. UD officials say that by giving families an honest, four-year financial prospectus, students and parents can make informed choices and be part of the national conversation about college cost transparency, a conversation UD is propelling.

UD’s leaders believe the four-year tuition program is in accordance with the institution’s deepest values. In a world of opaque higher education costs, says Rob Durkle ’78, the University’s assistant vice president for enrollment management and market development, becoming more transparent about costs “is the right thing to do.”


Pat Hurley and his wife, Christine, vowed to pay for their kids’ undergraduate educations. (“If you go to graduate school,” Hurley told them, “it’s on you.”) So far, they’re making good on that promise. The couple’s oldest, Annie, graduated from the University of Dayton last spring. Their middle child, Patrick Jr., is a junior biology major this fall, which also marks the first semester of college for Margaret, the Hurleys’ youngest. “I have had two at UD for the past two years and will have two at UD for the next two years,” Hurley says. “This tuition thing is very relevant in our house.”

The Hurleys have sat together at the kitchen table and asked tough questions: How much to pay out of pocket and how much to borrow? Whether to take out loans or draw on a line of credit? How to avoid leveraging equity in the house that would put their home at risk? How to pay tuition for kids in college, save for those who are still in high school, pay down the mortgage and set aside funds for retirement?

Planning was hard, in part because the scourge of college fees is widespread. According to U.S. Department of Education data, degree- granting institutions in more than half the states reported that fees constituted “a greater portion of combined tuition and fees in the 2010-11 school year than they had in 2008-09,” ProPublica reported. At some institutions, the total cost of fees is several times the cost of tuition.

When Annie went to UD and Patrick Jr. joined her two years later, it all suddenly seemed overwhelming. “My anxiety when I had two [in college] was the reality of ‘Holy cow! We are spending a lot of money,’” Hurley says. “It’s just hard on a family budget.”

Forced into setting priorities, he and his wife decided their primary goals were to pay for the kids’ college and save for their retirements. Other financial goals became secondary concerns. “It took a year or two for me to get serious about taking a longer-term view,” he says.

Paying for post-secondary education is indeed a long-term proposition, yet most colleges and universities promote short-term thinking. Institutions provide prospective students and their families with one-year cost estimates that omit mandatory fees, sidestep annual tuition hikes and ignore the fact that financial aid awards can shrink or lose purchasing power over time.

“There are certain things that schools hold close to the vest,” Durkle says.

The poker analogy is apt. Families are able to calculate the real cost of college about as well as a card player can guess the hand of an opponent who raises the stakes. “It’s challenging when tuition goes up every year,” Hurley says. “It’s tough to budget. … At some point you just want to know.”

A survey by Human Capital Research Corp. found that 40 percent of parents with children in their first year of college at 21 private institutions were “very confident” of their ability to finance the education of those kids. In the second year of college and beyond, confidence fell by half, to 20 percent. Financial crises can ensue, forcing families to cut corners and students to go without required books. In the worst cases, a child drops out of school.

When Pat Hurley and his wife received the four-year financial aid prospectus that UD prepared for Margaret, it included much more information than the documents received two and four years earlier for the Hurley’s older children. Yet the disclosure is simple enough to fit on two pieces of paper.

Margaret’s prospectus listed all projected costs for four years. The first sheet shows net tuition cost (“sticker price” minus grants and scholarships) for years one through four. Should UD raise tuition, it will increase the value of scholarships, dollar for dollar. If state or federal aid declines, the University will cover those shortfalls, as well. (All but about 2 percent of UD’s students receive aid totaling more than $100 million in grants and scholarships.)

The prospectus listed Margaret’s on-campus housing and University meal plan costs (both of which are required of residential students in their first two years), as well as her estimated transportation and discretionary expenses. The prospectus showed no fees of the type he paid for Annie, which before this year totaled more than $2,000 annually for some students. In the interest of transparency, UD eliminated them. The orientation fee that UD charged Annie? Gone. The basic university fee? Gone. The lab and counseling center fees? All gone.

A line item listed as “books & supplies” shows entries of “$0” for four years. Margaret and other students in good standing receive $500 each semester to buy required texts at the University bookstore — eliminating what the University considers another hidden cost. Nationally, 70 percent of college students say they have gone without a required book because the cost was too high, according to a 2011 survey by the U.S. Public Interest Research Group. At Dayton, prospective students qualify for the book stipend ($4,000 over four years) if they make an official visit to campus and file a Free Application for Federal Student Aid (FAFSA).

Screen Shot 2013-09-12 at 10.19.14 AMUnder a heading labeled “the real cost of your degree,” the prospectus lists Margaret’s total billable and non-billable costs for four years. Even though she is undecided about her major, her parents know how much their daughter’s bachelor’s degree will cost. The last section of the document lists customizable options for paying first-year expenses.

The University guarantees the terms of Margaret’s prospectus if she will file a FAFSA every year, maintain a 3.0 grade point average, enroll in a minimum of 12 credit hours per semester, and remain “a responsible member of the University of Dayton community.” If her GPA dips below the 3.0 threshold, the University will renew her financial aid and recommend that she meet with an academic counselor.

“We look at these students as members of our family,” says Kathy McEuen Harmon, the University’s assistant vice president and dean of admission and financial aid. “We want to give them the opportunity to be successful.”

And Patrick Jr.? While as a returning student he does not qualify for the guaranteed tuition program, his bill and that of all returning, full-time students will also include no fees.

The University has given Pat Hurley peace of mind. “I now have my college tuition plan for the next four years laid out. I know exactly what I borrowed, and I know what I have to plan for out of cash flow,” he says. “It’s a big weight off my shoulders.”


In a sense, the need for Dayton’s trans- parent tuition program was 50 years in the making.

On Sept. 15, 1961, an item in the UD stub- dent newspaper, Flyer News, reported that the University had collected $25 from every student who registered for the fall semester. “This is the first time UD students have paid this type of fee,” the article noted. The purpose of the basic fee was “to pay the costs of student seer- vices … not covered previously by a special fee.”

Over the decades, add-on charges piled up like grime on a windowpane. Getting a clear view of four-year education costs became difficult. By the time Annie Hurley was on cam- pus, the University was assessing some 40,000 fees on the bills of some 10,000 students annually. “We created a system that almost masks the real cost of education,” says Sundar Kumarasamy, the University’s vice president of enrollment management and marketing. “We were part of the problem.”

Students and families began to complain. “I often felt as if I was getting ‘nickeled and dimed’ by the University of Dayton,” wrote a student who filled out the 2012 Graduation Sur- vey. With tuition rising annually, tolerance for fees had reached a breaking point. “The public outcry caught our attention,” Kumarasamy says.

He began devising a more transparent sys- tem, one that would inform families of the real cost of attending the University and make it easier for them to plan. He took inspiration from the teachings of the Blessed William Joseph Chaminade, the founder of the Society of Mary, which in turn founded UD. Father Chaminade encouraged “fearless creativity” and the concept of “new times, new methods,” Kumarasamy says.

The University also has a history of nimbly responding to shifting markets and conditions. In the 1950s, the Flyers men’s basketball team played in Madison Square Garden, generating publicity and creating a pipeline of students who traveled from New York and New Jersey to attend college in Ohio. When the oil crises of the early 1980s dampened enthusiasm for travel and curtailed out-of-state enrollment, UD focused attention on the local market, and enrollment of Ohio students surged. More recently, the University has enlarged its recruiting foot- print and developed new markets outside the state.

UD also was one of the first institutions of higher education to accept college applications exclusively online. It was 1999, and “people were up in arms,” Durkle says. “Now everybody is online.”

In 2012, the time seemed ripe for another bold move. Several years of record enrollments and more selective classes had put the University in the enviable position of actually needing to enroll a smaller class. If greater financial disclosure somehow resulted in UD’s enrolling even fewer students than planned in the 2013- 14 academic year, it wouldn’t be the end of the world. (Projections based on marketing models showed a potential 200-student drop.)

Following a series of executive session meetings and presentations by University President Daniel J. Curran, UD’s board of trustees adopted Kumarasamy’s vision for more transparent dis- closure and a tuition policy that held students’ net costs steady for four years. “We couldn’t lose the opportunity to do what is right,” he says.


The University of Dayton’s transparent tuition program is unique. The forces that drove its development are not.

Between 2008 and 2013, “the United States cut higher education spending by a combined 10.8 percent,” Governing magazine reported in February, citing estimates calculated by Illinois State University. During the same period, household incomes for many families were stagnant or in decline.

The gap between the cost of college and the ability of families to pay it has grown, as well. In 1976, tuition was equal to 10 percent of household income, on average. “Today it’s closer to 30 percent,” says Jonathan Robe, a research fellow at the Center for College Affordability and Productivity. UD’s emphasis on transparency and its net-tuition guarantee “is a good step,” he says. “There is an information gap.”

There is also a troublesome financial short- fall for many families. Last December, the General Accountability Office reported that fewer than 3 percent of families used a 529 plan or Coverdell Education Savings Account to save for college. “The economic downturn may have reduced income available for education savings … [at a time when] paying for college is become- in more challenging, partly because of rising tuition rates,” GAO wrote. Nationally, total student debt, estimated at more than $1 trillion, has surpassed accumulated credit card debt.

Other pressures are buffeting the higher education sector. A shrinking number of high school graduates is stoking competition among colleges and universities for a smaller pool of traditional full-time, college-age students. The decline is expected to be particularly steep in Ohio. Nor is enrollment in college a guarantee of success. Nationally, 40 percent of first-time, full-time college students do not graduate within six years. Many don’t return for the second year of college.

Durkle recalls a young woman from a blue- collar family in Chicago who enrolled at UD. “The family pulled the money together … but they couldn’t do it in year two,” he says. “The outlay was more than they had anticipated. We think this program will help to retain students. Now they’ll have the ability to see all four years.”

By providing the information families need to make sound financial decisions, UD hopes to retain more students. Requiring undergraduates to maintain good academic standing to preserve the net-tuition guarantee should further promote persistence, University leaders say.

“This is a sociological challenge of our time,” Kumarasamy says. “We need to become part of the solution rather than only identifying the problem.”


The experiment seems to be working.

Total number of applications for the fall semester was 6 percent higher than last year, even though UD’s sticker price for the 2013-14 academic year ($35,800) went up 5 percent. The average net tuition — per year, after scholar- ships and grants — is $19,613. The average annual bottom line as found on the four-year prospectus is $31,103.

Families are reporting, through UD’s admit- ted student survey, that the tuition plan and its explanatory materials are helpful. More than 62 percent responded that the information was “very useful” in helping them plan and budget for college; 3 percent responded it “detracted.”

Among the families who decided not to enroll at UD, 24 percent responded that the information on cost transparency enhanced their college decision.

A number of experts have endorsed UD’s transparency initiative, among them David Warren, president of the National Association of Independent Colleges and Universities, and Mark Kantrowitz, a financial aid expert who publishes FinAid.org. Clark Howard, a nationally syndicated consumer expert, said on his radio show May 20, “The University of Dayton has come up with an idea that I think is really smart.”

Not surprisingly, there have been a few bumps in the road, mostly in the area of managing expectations. In the past, engineering students paid a surcharge due to the school’s extensive lab requirements. The elimination of that fee means that tuition paid by other students will subsidize those taking labs, critics have asserted.

Some parents were taken
aback this year when they received a prospectus indicating
that there would be no cost for
books. The old financial awards
sheet listed a cost for books and
an offsetting “book scholarship.”
The change in presentation had no impact on the bottom line, but some families were unhappy about “losing” their book scholarship.

UD is listening to the feedback, using it to tweak the experiment and better communicate the plan that is sometimes difficult for those familiar with the old formula to understand, University officials say. It’s also giving families tools to help them compare schools offering different prospectus models (see “7 questions,” story, below).

Families approach college choice and cost in a myriad of ways based on a number of factors. Those perceptions could influence perceptions of UD’s tuition experiment. “The role of parents runs the gamut, from driving the [college selection] process to sit- ting back and allowing children to drive it,” says David Hawkins, director of public policy and research at the National Association for College Admission Counseling. “The way in which a family responds to price sensitivity … depends on socioeconomic status.”

Families of first-generation college students tend to be averse to debt. So too low- income and ethnic minority families, Hawkins says. For high-income families, debt is a way of life. “If they [UD] can offer predictability, that is a selling point,” he says.

It was for Pat Hurley. In the final analysis, sending a child to college is about more than cost. Hurley wanted his children to get a faith-based education and a quality education, and “the University of Dayton is on a short list of schools that offer both.”

“I’m a big UD fan,” says Hurley, who counts among the University’s alumni three brothers and a sister, three first cousins, and two nephews. “The fact that they’re trying to make the tuition predictable and a little more affordable shows me that they are committed to the kids they are recruiting and educating.”

John Pulley has covered higher education for more than 20 years and has led The Pulley Group, a higher ed communications agency, for the last seven. He and his wife are saving to send their boys to college.


7 questions to uncover the true cost of college

Sometimes education costs can be hidden. Other times, they are simply unconsidered. To help families understand and plan for the total cost of an undergraduate education, UD’s Rob Durkle and Kathy McEuen Harmon offer questions to ask and expenses to examine.

Questions to ask schools:

1. How much has tuition increased historically? Use those figures to estimate the cost of tuition over a four- or five-year period.

2. Does the university attach fees to certain services, such as career or personal counseling or tutoring? How about credit fees for required internships?

3. Are books and other required supplies included in the stated cost?

4. How much does it cost to participate in social activities like club sports or the Greek system? While they aren’t required for graduation, many students consider such activities an essential part of the college experience.

5. Are required courses available and plentiful? If classes fill quickly or aren’t offered on a regular basis, it might take more than four or five years to graduate, adding to the overall degree cost.

And questions to ask yourself:

6. What is my student’s annual cost of travel (driving or flying) between school to home? Such expenses should be factored into the family’s budget.

7. How can my student cut costs before enrolling? Taking AP and summer program courses for credit can reduce the number of credit hours they’ll need to take — and pay for — as an undergraduate. Achieving a solid GPA and test scores in high school will benefit their bottom line for years. “By doing those two things, students in- crease their chances of getting good scholarships,” Harmon said. “That’s the biggest thing you can do.”

–Shannon Shelton Miller


Chorus of concern

A growing chorus of concern from education experts and political leaders indicates that the issue won’t go away anytime soon:

“We must make it easier for parents and students to finance their col- lege education and understand their financial obligations,” wrote U.S. Secretary of Education Arne Duncan in a letter to college presidents.

“If colleges don’t start providing more comprehensive information to prospective students, the government will step in,” said Anthony P. Carnevale, director and research professor of the Georgetown University Center on Education and the Workforce, in an article published last fall by The Chronicle of Higher Education. “If we don’t get transparency, we’re going to have to regulate.”

“Many schools market themselves to students without explaining the real costs of attendance. Letters informing them about financial aid awards often blur the distinction between loans and grants to make the school look like a better deal than it is,” ac- cording to a New York Times editorial published last year.

“The polls are really starting to show resentment toward higher education,” said Patrick Callan, president of the Higher Education Policy Institute, in San Jose, Calif., in a story published this May by the Dayton Daily News.

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