Consumers routinely make decisions with uncertain outcomes. Some are low-cost and low impact, like where to eat out. Others—think buying a car or furniture—cost more and end up shaping larger aspects of our daily routines. Still others, like retirement planning or buying a home, can end up being million-dollar transactions. Those decisions can determine everything from where we live out our lives to how we live them.
Casual observation tells us that more complex and higher-priced decisions usually end up having longer and deeper impacts. A bad meal might ruin or make a night, but an unreliable car can complicate the next several years. At the extreme, poor retirement choices can be felt thirty or even forty years later.
Decision-Making: A Sea of Information, So Few Facts
We see these things play out in the tools that consumers use to inform their decisions as well. Don’t know where to eat? It’s simple to open one’s phone today, click an app like Yelp!®, search what’s available, look at reviews, and make a fairly well-informed choice.
New car buyers may rely on Yelp! as well—probably to find dealership reviews. But chances are new car buyers will tap into other data resources to buttress their thinking, like Consumer Reports® or Kelley Blue Book®. With tens of thousands of dollars on the line and ownership likely to last years, knowing which vehicles will hold their value and which may end up constantly in the shop matters.
It should come as no surprise that for many of the really big investments, people are apt to take themselves out of the equation altogether. In the case of retirement or estate planning, it’s not uncommon for folks to pay other people to make the really critical decisions for them.
And then buying a college education comes along and everything we think we knew about making decisions goes crashing out the window.
The Backwards, Upside-Down Case of College Shopping
Where does investing in education fit into our decision-making framework? It’s clearly on the high-cost side of the spectrum—and certainly a choice with life-long consequences. Indeed, we can’t really determine the ultimate value that an education provides until the day we stop working and don’t need it anymore. Unfortunately, at that point a bad choice is also a nearly irreversible one.
And yet, while instinct says education decision-making should fall on the side of expert advisors and one-on-one advice, consumers increasingly go the opposite direction and leverage search tools, guides and rankings that are more apt for making a dinner reservation. The ultimate resource for turning college shopping into an app-like experience—the College Scorecard—is run by no other than the U.S. Department of Education. The College Scorecard offers parents and students tons of inputs and outcome-based data on everything from tuition and aid to completion rates and graduates’ salaries. The Scorecard bills itself as helping students ‘find the college that’s the best fit for you,’ but how does it do that when it knows nothing about the student hitting the site?
No Shortage of Shopping Challenges: Price, Language, Time
The contemporary news cycle has taught us to question facts found online. And while university websites offer tons of trusted information, not every school presents it to the public in the same words or in the same way. So shoppers need to dig deeper—but many of them aren’t, which can lead to poor decisions.
Why consumers don’t seek out advice on the college-going process in the same way they do for other large, long-term investments is under-researched. Intuition alone suggests several obvious blockers. Experts aren’t necessarily cheap. One firm, for example, charges $18,000 for a four-day application boot camp—and they have a wait list. Face-to-face consultations also aren’t scalable; there are only so many hours in a person’s day.
Basic literacy and cultural and language barriers also exist. Parents who have been through the process of taking out an auto loan or a mortgage may think they know what to do when it comes to financial aid. Industry studies show that parents and students alike often struggle to understand the differences between a federal and a private student loan. It’s also unsurprising to hear that first generation students, whose parents may have limited command of English, disproportionately struggle to understand technical finance terms.
Virtual Advising: Bridging the Best of Both Worlds
These are not trivial challenges, so how do we right the ship? How do we successfully marry students’ and families’ needs for targeted, reliable advice about higher education with large-scale solutions—at reasonable price points?
Chatbots—and more advanced types of virtual assistants—are technology tools that allow individuals to more intuitively connect with large scale data in ways that make the information more actionable. Virtual advising breaks through many of the hurdles and challenges I outlined above. Here’s how:
- Conversation Drives Efficiency—Chatbots let consumers “converse” with a dataset rather than having to sift through the data and interpret the information. That’s time-efficient for students and families navigating a complicated financial aid process for the first time. It drives efficiency for returning adults who must manage the administrative tasks of getting into, and financing, college training around a bevy of other life activities. It also simply aligns better with today’s consumers’ electronic information surfing habits.
- Their Schedule, Not The Institutions—As an always-on technology solution, chatbots make question-and-answer-style exchanges a reality beyond traditional customer service hours. That broadens access to the kinds of support typically reserved for expert interaction and ensures people can find information at the moment they plan to use it (like when they’re filling out a form at the kitchen table at night). It also offers those lacking the financial literacy—or those unwilling to reveal their financial illiteracy—with a safe space to find answers to questions they may be less willing to ask in other environments.
Virtual Advising Technology Drives Access and Trust
At the end of the day, chatbots do more than just make information access easier. Colleges and universities that mesh conversational inquiry of expert communication with a low-cost technology solution can help stabilize the bigger information pillar of the student financial success space. At a time when consumers and tech companies alike seek to separate fact from opinion in the online space, trusted sources of information that meet consumers’ needs represent the kind of solutions policymakers and institutions alike should be eager to embrace.