06/15/2012 04:45 pm ET Updated Aug 15, 2012

Cost and Value in Higher Education

I'm grateful for the opportunity to share some thoughts from the perspective of my university. Higher education is in the political cross currents these days. Critics, including some inside the academy, charge that colleges and universities are falling down on the job, and there is growing concern that the cost of higher education is putting it out of reach for many families. At the same time, we are reminded frequently that the percentage of Americans with college degrees has declined, and we are falling behind other countries in this important competitive measure. Therefore, despite reduced public funding for colleges and universities, there is growing demand to make higher education available to more people at lower cost.

This week the U.S. Department of Education published its second annual list of institutions with the highest and lowest tuitions in the nation. It also shows the highs and lows after financial aid has been taken into consideration. These lists are meant to help students and their families better understand the cost of education and to see the full range of options available. The lists are helpfully arranged by category: public, private not-for-profit, and for-profit institutions; and within each of these categories there are separate listings for two-year and four-year institutions.

In the private not-for-profit category, which is where my institution, Alliant International University, would fall (though we are neither among the highest nor the lowest in price), the Department's list of the 60 or so highest priced includes many world-class colleges and universities. But then look at the 60 or so non-profit schools with the highest net price (after financial aid) and there is almost no overlap. The second list has a high proportion of art schools and music conservatories, along with some less-wealthy traditional universities. In other words, the "sticker price" of some of the most elite institutions is not much of a guide to the actual price of attendance because those schools often have the most generous financial aid programs. Conversely, many institutions that are rarely in the public eye are among the most costly to attend.

Among public institutions, the focus lately has been on huge increases in tuition levels in recent years. In my state of California, for example, the Department's lists show that public universities have raised tuition by 40 percent or more in the past year. This corresponds almost dollar-for-dollar to reductions in the state budget for higher education, a sad retreat from California's historic support for its great public universities. And yet, by any reasonable standard, the cost of public education here and elsewhere remains a bargain.

Finally, there are the for-profits, which often appear to match their obvious convenience and open access with relatively low cost. But these are frequently schools with very low graduation rates, very few student services and little or no financial aid. In some cases, these institutions spend as much on marketing as they do on their educational programs, so a low price may signal even lower quality.

All of this simply means that students and families need to focus less on price and more on value. The value of an education is partly what it costs, but also what it delivers. Does the academic program match the students' needs and interests? Are there adequate support services -- from counseling to job placement? Are tuition dollars spent on faculty and educational programs or on other things that do not enhance quality?

The bottom line is that the choice of a college or university is very complex, and no list of prices or rankings provides sufficient information. At Alliant, my own institution, in addition to focusing on strong academic programs and student support services, we are working on new financial aid programs that reward students who stick with their studies and make good academic progress over time. The harder they work, the more we'll help "co-invest" in their educations. That's just one approach, and it won't be right for everyone. But our goal is to find students for whom our value proposition is a good match for their needs. Ultimately that is the only basis on which the relationship between student and university is a success.