Across America, a very limited number of public, four-year colleges and universities have experimented with a reset of tuition rates in what amounts to a drip across a sea of rising costs that have inundated students with debt.
An article in Affordable Schools identified 30 colleges that had reset or frozen tuition rates, or offered lower tuition for certain demographics. Almost entirely smaller, private colleges, the list did include two public, four-year colleges to include the University of Cincinnati in Cincinnati, Ohio, and Metropolitan State University in Denver, Colo.
While the tuition resets are a laudable effort by colleges to make higher education more affordable, it turns out that in many cases these tuition cuts can be deceptive.
That’s because, as this article in Money magazine pointed out, colleges and universities may indeed be lowering tuition. But other costs such as room and board, fees, books and other charges can go up.
The inside story is that institutions of higher education have “bafflingly complex” ways of painting the actual financial picture for students and prospective students, according to the Money magazine article. Tuition is just one element of the total attendance costs.
It’s disingenuous of colleges and universities to highlight a tuition reduction while other fees are rising sharply.
It’s evident also, based on a consultant’s recent study, that colleges may be reluctant to lower tuition because of the perception that lower costs reflects lower quality. It’s the Louis Vuittonification of higher education.
Yet that’s the perception colleges and universities have fueled as they push ever higher tuition rates and fees on students, leaving the impression that a quality education comes with a high price tag.
Sharon Lapovsky is an economist who consults, writes and speaks widely as an expert on higher education finance, strategy, pricing, enrollment and governance. Her business, Lapovsky Consulting, is based in New York City and a link to her recent study on eight institutions of higher education that reset tuition rates can be found here.
The eight institutions in the study are private and have full-time undergraduate enrollment of fewer than 3,000 students with freshmen classes ranging from 42 students to 600. The tuition at these institutions in fall 2015 ranged from $16,500 to $38,428 and were lowered anywhere from 8 percent to 43 percent between 1996 and 2014.
An intriguing piece of data in the Lapovsky study is how perception influences college choice. In a survey of 750 students and parents, more than half of the students indicated that given a choice between attending a college that costs $30,000 and gives them a $10,000 scholarship, compared to a college that cost $20,000, they preferred attending the higher-priced institution. They told Lapovsky that “you get what you pay for” and that you have to pay more for the best.
If price points fuel perception, then is it any wonder that institutions of higher education are seeing fit to hike tuition rates exponentially, far outpacing income rates? Such as 100 percent in the last 10 years at the University of Virginia, or by 150 percent and 84 percent at the College of William & Mary and Virginia Tech, respectively, in the last 10 years, according to data from the universities.
As one college president told U.S. News and World Report, the advertised sticker price isn’t the true tuition and that the “system that most college and universities are following of having very high sticker prices and high discounts to go along with it” is really getting out of hand.
We believe this underscores how imperative it is for public, four-year colleges and universities to truly reset tuition rates that actually significantly lower costs to students so they aren’t burdened with high debt loads upon graduation. After all, if these institutions truly cared about the students they are educating, they wouldn’t treat them as virtual blank checks.