Dive Brief:
- The American Council on Education’s latest report from the Center for Education Attainment and Innovation focuses on the indirect costs of college.
- The report calls for more research about such indirect costs and highlights Higher Education Act reauthorization as a chance to decide on best practices for setting these costs, which affect student financial aid allowances.
- ACE found tuition and fees comprising just 40% of four-year public schools’ total cost and just 25% of community colleges’, making the consequences for bad estimates of indirect costs serious for students.
Dive Insight:
The ACE report acknowledges that it is bad for institutions regardless of whether indirect costs are over- or underestimated. Either students over-borrow or they have to fill gaps in financial aid with work that takes away from their studies and could lead to dropping out.
The study also found inconsistencies among estimated indirect costs across colleges in the same city. Developing best practices could help institutions who simply don’t have the internal capacity to do better, giving them more accurate numbers to quote to their students, and perhaps improving retention at institutions across the country.