This audiobook narrated by Kate Harper examines how the financial pressures of paying for college affect the lives and well-being of middle-class families The struggle to pay for college is one of the defining features of middle-class life in America today. At kitchen tables all across the country, parents agonize over whether to burden their children with loans or to sacrifice their own financial security by taking out a second mortgage or draining their retirement savings. Indebted takes readers into the homes of middle-class families throughout the nation to reveal the hidden consequences of student debt and the ways that financing college has transformed family life.
Caitlin Zaloom gained the confidence of numerous parents and their college-age children, who talked candidly with her about stressful and intensely personal financial matters that are usually kept private. In this remarkable book, Zaloom describes the profound moral conflicts for parents as they try to honor what they see as their highest parental duty—providing their children with opportunity—and shows how parents and students alike are forced to take on enormous debts and gamble on an investment that might not pay off.
What emerges is a troubling portrait of an American middle class fettered by the “student finance complex”—the bewildering labyrinth of government-sponsored institutions, profit-seeking firms, and university offices that collect information on household earnings and assets, assess family needs, and decide who is eligible for aid and who is not. Superbly written and unflinchingly honest, Indebted breaks through the culture of silence surrounding the student debt crisis, revealing the unspoken costs of sending our kids to college.
When it comes to choosing a college, the sticker price can be a major turnoff. A significant 65% of prospective students and 67% of their families report ruling out institutions based solely on the advertised “sticker price”.
But what does this mean for colleges and universities, and how can they help families look beyond the sticker shock to understand the true affordability of a degree?
Ruling out colleges based on the sticker price is on the rise – and it’s happening fast. In just three years, the percentage of families eliminating schools from consideration due to high upfront costs has jumped from 58% in 2022 to 67% in 2024.
This suggests that concerns about affordability are increasingly driving the college planning process, with families taking a hard look at the bottom line before even exploring other factors. But is this sticker shock reaction always a rational response, or might colleges be losing out on applicants who could afford to attend with the help of financial aid?
A notable divide emerges when comparing the sticker shock responses of first-generation college students to their continuing-generation peers. A full 69% of first-generation students reported ruling out schools based on sticker price, compared to 64% of continuing-generation students.
This disparity is also reflected in families’ perceptions, with 68% of first-generation families eliminating schools due to cost versus 62% of continuing-generation families. This could suggest that first-generation students and families are less familiar with the intricacies of college financing and the crucial distinction between sticker and net price.
As a result, they may be more likely to focus on the daunting upfront cost without fully exploring the available aid options. How can colleges better reach, educate, and support these first-generation students about affordability to prevent them from ruling out institutions that could be a great fit financially and academically?
The level of family involvement in the college search process also plays a role in sticker shock decisions. Students with very involved parents were less likely to rule out colleges based on sticker price (63%), suggesting that parental guidance may help applicants look beyond the initial cost to consider the bigger financial picture.
But what about students with less involved parents? A striking 75% of students with uninvolved parents ruled out colleges based on sticker price. How can colleges step in to provide the necessary counseling and education about affordability for these applicants?
Loan anxiety and sticker shock: A shared concern for students and families
For both students and their families, concerns about loan debt play a significant role in the sticker shock equation. A striking 70% of students who expressed concerns about borrowing to finance their education were more likely to rule out colleges based on high prices. Families share this loan anxiety – 73% of families with loan concerns reported ruling out institutions based on sticker price. This underscores the need for colleges to address loan concerns head-on through transparent communication about financing options, debt management strategies, and a degree’s long-term return on investment.
By providing reassurance and resources, institutions can help applicants feel more comfortable with the financial commitment and less likely to rule out schools due to initial sticker shock. Importantly, 72% of students and 79% of families reported that their borrowing concerns were negatively impacting their college planning, suggesting that proactive support from institutions is crucial in mitigating loan anxiety and promoting a more holistic view of affordability.
The net price imperative
While sticker price can be a major deterrent, the actual net price of attendance paints a very different picture. Institutions must do a better job of clearly communicating net price information to prospective students and families.
This means highlighting available aid, scholarships, and financing options to demonstrate affordability. Tools like net price calculators can be powerful in helping applicants understand the true cost of attendance. But are these resources being effectively utilized and communicated to offset the sticker shock reaction?
To help families and students look beyond sticker shock, institutions can take the following steps:
Clearly communicate net price information: Highlight the difference between sticker price and net price on your website and in recruitment materials.
Provide transparent financing information: Break down the costs of attendance and explain financing options in clear, easy-to-understand language.
Offer user-friendly net price calculators: Help families estimate their actual out-of-pocket costs with interactive net price calculators.
Proactively counsel about aid: Don’t wait for families to ask – offer personalized financial aid counseling to prospective students.
Address loan anxiety: Provide resources and guidance to help students and families understand responsible borrowing and debt management.
Highlight value beyond price: Showcase the long-term value and outcomes of a degree from your institution to demonstrate the return on investment.
Partner with high schools: Collaborate with high school counselors to provide early education about college financing and affordability.
Target outreach to first-gen students and their families: Recognize that first-generation students may need additional support and education about the college financing process.
Follow up with sticker-shocked applicants: If a student expresses interest but seems deterred by the sticker price, proactively reach out with information about aid and affordability options.
Leverage video and AI to personalize the process: Use video content and artificial intelligence tools to provide personalized, interactive explanations of financial aid and affordability. AI-powered chatbots can offer 24/7 support to answer families’ financing questions, while personalized video messages can break down complex aid packages in an easy-to-digest format. By embracing these technologies, institutions can create a more engaging, self-service-oriented experience that empowers families to confidently navigate the affordability landscape.
The bottom line and more findings from our Perceptions report
The sticker shock phenomenon is a real and growing concern in college admissions. However, by understanding the factors that drive these decisions and taking proactive steps to educate families, colleges can help prospective students see beyond the advertised tuition rate to consider the true affordability of a degree. This requires a nuanced understanding of the college financing landscape and a commitment to clear, transparent communication. With the right approaches, institutions can attract diverse applicants who may have otherwise been deterred by sticker shock.