December 15, 2019

More Private Colleges Are Cutting Tuition, but Don’t Expect to Pay Less

“The motivation for most discounting is survival,” said Jim Galbally, a senior consultant at AAL, a higher education consulting firm. “They are using the discount rate as a way to increase enrollment.”

Mr. Galbally added that tuition accounted for more than 80 percent of the revenue at most colleges, “so every student really matters.”

Whether reducing tuition has its intended effect is difficult to answer, according to a recent study of two dozen private colleges. Consultants say it depends on the institution’s goals and how the plan is executed — simply coming up with a more attractive sticker price isn’t enough.

The tuition cut at Albright College in Pennsylvania captured the attention of Sabrina Malone, a mother of six in Dover, Del., even if she did realize, after running some numbers, that it was probably a marketing tactic.

With or without the reduction, she said, “it was still going to cost us the same amount of money.”

After the reset at Mills, Mx. Anderson’s tuition dropped by nearly 36 percent for the fall 2018 semester, to about $14,000, but scholarships and grants dropped by more than half, to about $6,000. When various fees and other details are taken into account, in the end Mx. Anderson’s total costs didn’t change significantly.

A total of 91 colleges reset their tuition from 1987 through 2018, according to Mr. Kantrowitz’s analysis. That’s just a tiny fraction of the roughly 4,300 degree-granting institutions, according to the National Center for Education Statistics, but more are expected to join their ranks.

Though it’s hard to predict how many will move ahead, Mr. Kantrowitz’s analysis found that an additional 273 four-year, nonprofit colleges shared characteristics with schools that have reduced prices. They’re often small, not highly selective and dependent on tuition revenue.

Article source: https://www.nytimes.com/2019/08/09/your-money/college-tuition.html?emc=rss&partner=rss

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