They’re out to reveal the ‘dirty little secret of higher education’
For all its faults, you can give the Internet credit for at least one big win: making prices far more transparent than they were in those dark days before http://everything. Sitting on a bench with a mobile phone, it’s easy to compare the price of a ride across town with Uber versus Lyft; buying a used Toyota from any dealer in the country; getting a home mortgage; or embarking on a kayak tour in Maui.
But a Boston startup launching this month contends that the price of one important thing is still pretty opaque: going to college.
“The dirty little secret of higher education,” says Nick Ducoff, the cofounder of Edmit, is that a raft of grants, scholarships, and other financial assistance means that a school’s published tuition rates don’t apply to every student. “There’s a lot of discounts masquerading as scholarships,” says Ducoff, an entrepreneur and attorney who recently left Northeastern University, where he was vice president of new ventures. Another secret: Many good colleges are scrambling to fill seats in their freshman classes.
And, Edmit cofounder Sabrina Manville says, while a lot of attention has been paid to rising tuition prices, the net price that the average student pays has been “very flat. But students and parents have sticker shock. They’re not realizing that schools are more affordable than they look, and schools are turning people away that would otherwise be able to come to them.” Manville was, until recently, an executive at Southern New Hampshire University in Manchester.
With Edmit, Ducoff and Manville say they hope to create a comparison-shopping experience similar to what sites like TrueCar or Zillow offer for vehicles and homes. Through those sites, shoppers have access to information about what others have paid for a similar used SUV or condo in Somerville; with Edmit, they’ll get all the details about financing a college education. The site will build a profile of the student who is entering the college “market,” taking into account grades, test scores, extracurriculars, and family income levels. Then it will calculate an expected tuition price.
From there, Edmit will “help the student get that discount, by connecting them with the decision maker at that university,” Ducoff says, “and providing them with the data and justification for that discount.” He refers to it as “opening a phone line between the college and the student on price.”
They envision that colleges will pay a fee, out of their marketing budgets, to be on the other end of that phone line. While most people have the perception that colleges can be choosy as they fill each dorm room — and rebuff everyone who isn’t up to snuff — the reality is different. In 2016, according to the Chronicle of Higher Education, 40 percent of private schools and 30 percent of public schools missed their goals related to either tuition revenue or number of freshmen they enrolled. That survey included more than 400 small and medium-size colleges and universities.
Higher ed is, after all, a business, and a key part of that business is enrolling the right number of students to generate the right amount of revenue. “It’s like Goldilocks,” Ducoff says. “It has to be just right. You don’t want to many students or too few. If you get too many, you’ve got to scramble to provide housing, and bring on extra faculty.”
One issue for Edmit is that there are already lots of sites out there related to college costs, including the Department of Education’s College Scorecard and College Compare from US News & World Report. Attracting traffic will be Job #1 for the startup.
But, says Paul Leblanc, president of Southern New Hampshire University, “if a company can come along that makes it easy and clear to get answers” related to college costs, “it could be a huge help. It’s a big, complicated challenge with big potential payoff.”
Lena Shi, a former White House policy adviser on higher education, says that while individual universities offer “net price calculators” on their websites to try to convey the tuition prices students actually pay, it’s tough to do that across several different colleges. “Any effort to break down a more personalized estimate for students definitely helps the most disadvantaged students, who can be deterred by costs,” Shi says.
The genesis of Edmit, Ducoff explains, was a breakfast he had with an old friend in Seattle. The friend’s son was applying to schools in the Midwest, but his favorite one didn’t offer as much financial aid as several others. “I said, ‘Go ask Indiana if they’ll match it,’ ” Ducoff recalls. “He asked, and he got it. That is happening, but only when people know to do it, and have the gumption to do it. Higher ed is the ivory tower, and I don’t think people realize they can haggle like they’re in a bazaar, but they can. We want to facilitate that through technology, so as much of it as possible can happen dynamically.”
Edmit has only put up a placeholder website, and the startup is just beginning the process of pitching investors. As with most fledgling companies, there is a product to be built and a lot of premises to be tested.
Unlike most tech startups, though, Ducoff and Manville don’t see themselves as “disruptors.” But they do want to change how tuition prices are communicated and understood.
“We’ve banned the word ‘disrupt,’ ” Manville says. “But we are here to make [the financing process] more efficient, which should benefit both colleges and students.”