If you received an undergraduate degree in the United States, you are likely familiar with the U.S. financial aid system from a student perspective – you submit your essays, your academic records and test scores, you file the FAFSA, and you expect some amount of financial aid from the colleges you applied to in return. Your institution may or may not have provided an estimated cost calculator on its website, and you may or may not have received as much financial aid as you hoped for from your institution. Given that approximately 71% of each undergraduate class takes on student loan debt (TICAS, 2014), institutional aid typically does not cover the gap between what the student can pay and what the institution offers (also known as unmet need). What is clear, however, is that despite a consistent sticker price, the actual cost of college differs from student to student.
Colleges and consultants refer to the practice as “enrollment management” or “financial aid leveraging”, but the pricing strategy itself is known as price discrimination (How Colleges Know What You Can Afford, NY Times, 2017). As with any business where functionality is constrained by net revenue, in some ways there is a fundamental opposition between the best interests of the consumer (student) and the seller (college), since consumers ideally want the product that the cheapest rate and sellers want to earn as much revenue as possible (though many factors other than revenue also drive colleges’ decision making). However, this idea becomes more problematic as we consider that education is not an inessential service, but a key component in personal development and economic opportunity.
The looming ethical discussion, at least in the U.S., is whether higher education should be free for anyone who wants it, perhaps eliminating the need for universities to engage in price discrimination. A parallel discussion is whether price discrimination that leaves unmet need for students is what needs more immediate resolution.
Rather than taking a stance on U.S. college pricing, however, I am interested in the enrollment management paradigm from a student privacy perspective. If Nissenbaum et al. posit that “informational norms, appropriateness, roles, and principles of transmission” govern a framework of contextual integrity (Nissenbaum et al., 2006), how might the use of student-provided data by enrollment consultants violate contextual integrity from the perspective of a student?
I cannot find any existing studies on students’ expectations of how colleges handle their data. As a U.S. student myself, I expect that many students’ expectations are driven by the norms laid out by U.S. policy (particularly FERPA), which treats educational and financial data as private and protected.
I believe, therefore, that certain expectations about the flow of data from student to institution may be violated when universities don’t explicitly divulge their partnerships. If the flow is expected to be a straight line from the student to the college, the continuation of that information from college to consultancy and back to the college may seem aberrant. Equally important, I think, is the expectation of the extent of the information. Students likely expect, and cost calculators imply, that certain static pieces of information will be used to make an admit decision, offer merit aid, and determine financial need. In that case, the passing of that information to an outside consultancy who can use that information (and third-party data) in a predictive model to an extent that surpasses any individual piece of data, both to recommend aid and to predict behavior, and then return that information to the college, may also violate students’ expectations.
It seems to me that whether financial aid leveraging is beneficial to the student or not, a lapse in privacy occurs to the benefit of institutions when they fail to disclose the extent to which student data will be used, and by whom exactly.