How do families pay for college?

On October 27, 2026, the Brookings Center for Economic Security and Opportunity hosted “The hidden price of college: Three perspectives on how families can navigate their most important financial decision,” a discussion of how families can choose a college that fits them both academically and financially. Phillip B. Levine, Katharine Coman and A. Barton Hepburn Professor of Economics at Wellesley College, was joined by Ron Lieber, the “Your Money” columnist for The New York Times, and Christina Lopez, former dean of enrollment management at Barnard College. Cabot Family Chair and Senior Fellow Sarah Reber moderated the discussion.

The panelists opened by highlighting their personal and professional experience with navigating financial aid. The conversation was focused on how families can finance college, especially four-year degrees, and how the price varies across colleges and across families.

In a wide-ranging conversation, the panelists discussed why the system is so complicated and offered advice on how families can navigate it. You can watch the full event here.

What is the current state of the financial aid system?

Lopez framed the main problem as one of timing: families tend to talk about affordability only once acceptances have arrived, rather than at the beginning of the application process. Levine described the financial aid system as extremely complicated, largely because the desire for equity means that some students pay more than others. That pursuit of equity, he said, has come at the expense of efficiency, making it hard for families to gauge what a college will actually cost. Lieber agreed that efforts to help the students who need it most have reduced transparency, making it harder for families to figure out early on what they are able and willing to pay.

Misleading sticker prices and imperfect calculators

Colleges must post their cost of attendance or “sticker price,” but Levine explained that it is actually the maximum a family could be asked to pay, and most students pay less. Families often see this number first and assume some schools are out of reach when they may not be.

Net price calculators, which the federal government requires colleges to provide, were meant to fix this by providing a better estimate of the net price—how much a student pays factoring in financial aid. But Lopez noted that they are not always maintained and often miss the nuances of different families’ financial situations, a gap that matters even more for early decision applicants. The panelists agreed that the calculators were made with good intentions, but most net calculators fall short in providing families the information they need to make informed decisions. Lieber went further, arguing that colleges should simply make their prices for different types of families available up front.

Even so, the panelists said the calculators can still be a starting point. Levine stressed that colleges should give applicants better information from the beginning of the process, not just after the acceptance letter arrives. Lieber suggested that families take screenshots of their calculator results to financial aid offices and actively ask for help, though Lopez pointed out that many aid offices lack the staff and resources to work closely with families.

Loans and need-based and merit-based aid

Levine explained the difference between need-based and merit-based aid. Need-based aid covers the gap between a college’s price and what the Free Application for Federal Student Aid (FAFSA) or College Scholarship Service (CSS) Profile says a family can afford. Merit-based aid nominally rewards strong students, though for students with need, merit-based awards often replace need-based aid under a more appealing label. Levine and Lieber described merit-based aid as unpredictable and often a form of marketing, helping schools maintain their image, compete with one another, and hit their enrollment targets. Lieber pointed to the Common Data Set as a useful tool for understanding who receives merit-based aid, and Lopez added that even generous awards do not always make a college with a high sticker price affordable.

On loans, Lopez noted that new annual and aggregate limits on Parent Loan for Undergraduate Students (PLUS) loans mean that families need to think ahead to make sure they don’t hit the limit before graduating. Levine pointed out that students can access federal loans themselves, and that borrowing modest amounts to finance higher education often makes good sense.

A piece of advice for families

Reber asked each panelist to offer a closing piece of advice for families. All three emphasized that families need to seek information and have (sometimes difficult) conversations early in the process.

• Levine: Devote time to get the best information you can, using net price calculators and the Common Data Set, before you make a decision.
• Lieber: Ask who pays what and why, whether a college is worth it, and what you are willing and able to pay, and have better conversations between families and institutions and among families themselves.
• Lopez: Educate yourself earlier in the process, before the student gets admitted. Try to understand how costs are calculated and include your student in that process.