College Choice: Informing Students' Trade-Offs between Institutional Price and College Completion. Policy Brief

Empirical research on the returns to postsecondary education provides a near universal consensus that college confers numerous advantages for both individuals and society. Not only do individuals with a college degree earn more money than their peers with only a high school degree, they lead healthier lifestyles, experience greater job satisfaction, and engage in more civic activity (Baum, Ma, & Payea, 2010). The analyses conducted in this brief show that college price and degree completion rates are positively correlated. If students opt to go to college but have concerns about affordability or the return on their financial investment, they may gravitate toward less expensive (by sticker or net price) institutions. Students who choose what they perceive as a more affordable college may find themselves enrolled at an institution with lower rates of degree completion compared to their other, more expensive college options. In this case, making the college choice based on frugality may not prove to be the best investment in the long run. The authors present data on the trade-offs between annual net price and college completion rates for the high school graduating class of 2004. These analyses are intended to illustrate the magnitude of the trade-off associated with choosing between colleges that differ in terms of net price and completion rates, thereby enabling students and families to think critically about college options in light of long-term outcomes. Student Characteristics by Average SAT Category in "NPSAS:04" and College Board 2004 Data is appended. (Contains 4 tables, 5 figures and 17 footnotes.)