Community College: Cheaper?

The NJ Stars program of community college attendance for two years then transfer, as a junior, to a state four-year college saves top students a lot of money, right? Wrong. While community college may be worthwhile for some, for top students eligible for NJ Stars, it entails three disadvantages rarely discussed: Cost, time and risk.

Under the NJ Stars program, top students can attend community college tuition-free and then transfer to a four-year public NJ college (if the student excels at community college, she can get a $3,500 per semester tuition scholarship, four semester maximum, under Stars II). Top students however, are also often able to gain admission to top private colleges that offer generous amounts of financial aid, right out of high school.

A calculation of anticipated college cost and financial aid for two NJ families reveals the potential economic pitfall of starting at community college. Each family of four has a graduating high school senior and similar amount in savings. The Smith Family earns $75,000 per year and the Jones Family earns $150,000. Each family can send their child to community college tuition-free (but not cost-free; there are auto, gas, food and incidental costs) for two years via NJ Stars.

So how can that be a bad thing? Most parents - and frankly, too many guidance counselors - mistakenly believe that most children graduate college in four years. At NJ state colleges - the ones eligible under NJ Stars - the facts tell a different tale. Only 42% of Kean University’s freshmen, for instance graduate within SIX years; at Montclair State, only 27% graduate in four and at Rutgers, 53% require five or more years. Each college’s “list price” is over $25,000 annually. At Boston College (BC) and Princeton by contrast, with “list prices” over $50,000, close to 90% graduate in four years. Now, let’s factor in expected financial aid:

College should cost the $75k Smith Family, post financial aid, the following for 2009: Kean - $16,324; Montclair - $13,550; Rutgers - $13,337; BC - $9,445 and Princeton - $7,648. Yes, you read that right - the $50,000 colleges cost far less than the $25,000 ones. Add to this the likelihood that state colleges will require at least five years while BC and Princeton should take four and the cost savings advantage for the “expensive” colleges widens.

So if a student goes to “free” community college and then state “four-year” colleges, she may spend three, if not four, years in addition to her two at community college. The Smith’s cost for three years, maybe four, at the state colleges (in addition to the tuition-free ones at community) is between $48,000 and $65,000 versus the $30,000 and $40,000 four-year out-of-pocket cost at the elite private colleges. Clearly, for this family, community college plus state schools cost more money than private college.

For the $150,000 Jones family - who will not receive nearly as much financial aid as the Smiths - the numbers are not as dramatically in favor of going straight to an elite private college. But when one factors in that the student may enter the workforce a year or two sooner (at say $25,000 per year) by going the private college route, the economic costs are virtually identical. For the excellent students who qualify for NJ Stars and Stars II, proper advance planning can make the cost of immediately attending an elite private college less than the community college/state college offering available through NJ Stars.

The community college route, clearly not always cost effective, also potentially delays a student’s entry into the workforce and the wages not earned while attending college. Career advancement and the maturation process that associating with older adults and mentors provides is placed on hold.

And finally, there are academic risks to the “community-college-then-four-year-college” approach: According to U.S. Department of Education statistics, only 60% of students entering four-year colleges earn bachelor’s degrees within six years. Only 31% of community college students, however, earn a bachelor’s degree within six years; and only 26% of U.S. community college students ever even transfer to a four-year institution. Top NJ students will most likely be among other top students by enrolling directly at challenging private colleges.

Community college may provide opportunity for some students but most top-tier high school graduates will be better served - and spend less money on education - by going directly to the private colleges at which they get accepted. A scientific career/college search and selection, along with advanced cost-benefit analysis (including the effects of possible financial aid), for a family’s unique situation - rather than a reliance on private college “list prices” and marketing pitches from community colleges - is critical to making the right college selection decision.