Disruption may be coming (at last)

A while ago, I wrote a guest blog post on the Washington Post, about using Google to manage the American college and university application process.  I got some good response to it: A lot of people thought there was some merit to the idea; some thought I was crazy, and many suggested that this was an example of the “McDonald’s Syndrome.”  That is, when you get into one of those situations at work where everyone wants to go to lunch, but no one can offer an idea, you simply say, “Let’s go to McDonald’s.” People are suddenly inspired to come up with something better.

I still believe the whole college selection process is–at least from my standpoint–backwards: Price is often the last consideration for many families, because it’s the most mysterious part of the process, on purpose. This hit home with me earlier this spring, when I sat down with a neighbor and her extraordinarily high-achieving daughter, who had six admissions but wasn’t sure they could afford any of them. Something seems wrong.

As I was thinking about this on my long train ride into the city this week, I recalled a conversation in the late-1990’s with Tedd Kelly, who was the founder of CERR, the Consultants for Educational Research and Resources. Tedd recognized that the way we do college admissions was backwards, because cost is the last thing that gets decided. (In fact, we purposely tell most students we can’t tell them the cost until April, after they’ve completed a FAFSA.)  Tedd set up a website and a business called “ECollegeBid.”  Students could indicate their profile, and how much they were willing and able to pay, and colleges could accept their offer to get them to enroll. Cost was right up front; the details flowed from it.

It was a disruptive idea that is like almost all disruptive ideas in Higher Education: It never seems to work when it comes from the inside, because the disruptors have too much to lose.

But as we go through another year of angst and agony about admissions, and now about financial aid and affordability, true disruption may be coming from another source: The Federal Government.  I’m not sure anyone I’ve talked to has considered how truly disruptive the prior-prior year (PPY) proposals could be.

The current financial aid process requires parents to complete the FAFSA in the spring of the senior year of their child’s high school education, after applications have been filed. It’s always a mad rush, and often must be completed before the parents have their taxes completed, which makes the results tentative.  If you’re applying for Fall 2014, you use 2013 income data.

With PPY, you’d fill out that form in the student’s junior year, any time you can, and almost always after taxes are filed.  You could get the FAFSA (or Profile) results before senior year begins.  You could talk to colleges about costs very early, even before applications are filed.

This could be very good for students, of course:

• It could erase most of the uncertainty for parents.
• Students might be surprised by the range of options available to them in the end; many students end up paying about the same at private colleges as publics, but never find out because of sticker shock.
• It could radically revise the way in which merit aid is used.

But it could scare the daylights out of colleges. Consider what might happen:

• Students wouldn’t have to apply to as many colleges to ensure they have an affordable option because they’d know costs up front.
• Applications would fall, and colleges who define themselves by a low admit rate might struggle to make sense of the new reality.
• Cost becomes an important part of the consideration process in ways it never has before, as most rational people think it should be.
• Yield projections would be difficult if not impossible in the first couple years. Colleges would not know how many students to admit to make their class.
• It would be difficult to work with parents who have income that varies wildly from one year to the next.
• But most important, one of the most sacred of all the sacred cows–the May 1 Candidate’s Reply Date–might be a thing of the past.

Imagine that: If you no longer have to wait until May 1 to know final costs, colleges could institute several application cycles, and insist on earlier deposits: A sort of multiple Early Decisions on steroids.  As spots become filled in each cycle, fewer are available in the next.

Is this frightening?  Suppose we had always done it this way, and I suggested we switch things around, and make cost a total mystery until a month before you have to decide?

Tell me what you think. What else might be the unintended consequences of PPY?