The Value of Accurate Cost Estimates for All Students

Last week, the Institute for College Access and Success (TICAS) released an article that says, a popular data source underestimates costs for students living at home. But both TICAS’s own survey and a government survey show that colleges are estimating the total budget for students living at home at a similar level for those of other students. Overall, the average non-tuition budget for students living with parents is $8,604, or about $400 less than that of students living off-campus. The issue then is ensuring accurate estimates reach students.

The Department of Education requires schools to report estimates of average student living expenses to the Integrated Postsecondary Education Data System (IPEDS), a national, publicly available database of all colleges and universities that receive federal financial aid. IPEDS is one of the most common resources in higher education research and is the go-to source for information about a particular school. Schools report cost estimates to IPEDS separately for a variety of expenses: room and board, books, tuition and fees, and other expenses. If you add up each of these elements you get a school’s estimated cost of attendance (COA) for that group. Schools create each measure for three groups of students: those who live in on-campus housing, those who live off-campus, and students who live with their parents or other family members.

But for students who live with family, IPEDS does not collect an estimate of room and board expenses, maybe because room and board is “free.” So, if you add up each of the elements of COA, the result for students living at home do not include room and board expenses and therefore is not comparable to cost estimates for other students. But since either students or their parents must be paying something for food and housing, the IPEDS measure of COA for students who live with family is incomplete.

But just because IPEDS doesn’t require something doesn’t mean it doesn’t exist. Students’ financial aid awards are based on the cost estimates constructed by the colleges themselves, no matter what gets reported to IPEDS.

Furthermore, New America analysis of the National Postsecondary Student Aid Study (NPSAS), a government survey that includes cost estimates for non-tuition expenses suggests very small differences between students who live at home versus those who live off-campus. That’s true across every higher education sector, except public two-year schools, where non-tuition expenses were estimated to be higher than those for students living on their own. Even TICAS’s survey of schools shows that colleges estimate room and board for students living with family anywhere between $1,000 to $8,000.

Even though colleges are including living costs for off-campus students, there is still the problem TICAS mentions--it’s not in IPEDS. Because the federal net price calculator uses IPEDS data rather than collecting information directly from schools (as NPSAS does) some schools are listing zeroes for room and board costs for students who plan to live at home, despite having better estimates of actual costs. The federal College Navigator - a tool designed to help students compare colleges - is also populated using IPEDS data. This is misleading since these students still have to pay for food and often also help their families with rent. So if any consumer information tools are based on the IPEDS data, this could be a problem for students trying to create budgets or compare costs from one school to the next. 

Though built for consumers, researchers at times use information from net price calculators or College Navigator in their work, which could bias any results. Likewise, researchers who download data directly from IPEDS should be cautious with conclusions about costs for students living at home. Survey tools such as NPSAS will generate more accurate estimates of living expenses, but those looking for school-level information will need to track down the website or make a phone call for accurate estimates.

The consumer tools that run on IPEDS data are likely misinforming students about the costs of living at home. Since cost is a key driver of whether and where students enroll and is also tied to completion, IPEDS should correctly report that information. But, since colleges include living allowances for room and board even for students who live and home, and students’ financial aid awards reflect these amounts.