mead cohen berger shevtsova garfinkle michta grygiel blankenhorn
Winter for Higher-Ed
More Schools Feeling Tuition Squeeze

A new piece US News and World Report spotlights how a group of small private schools is responding to the student debt crisis by lowering tuition, sometimes drastically:

Concordia University in Minnesota “reset” tuition for the 2013-2014 school year, dropping it from $29,700 to $19,700, and Ashland University is set to follow in fall 2014. The Ohio school will drop its sticker price to $18,908 – a reduction of 37 percent.

A handful of other small, private universities also enacted or announced tuition cuts in 2013, including Converse College in South Carolina andOhio Northern University.

These schools are marketing these tuition cuts as a magnanimous gesture to help students cope with the student debt crisis. That may be part of the motivation, but there is much more going on here. As we’ve seen across the higher-ed sector, enrollment has hit a plateau and schools are finding it more difficult to raise tuition to make up for enrollment losses. Students have become increasingly price sensitive, especially at small private schools like those described here. Keeping prices at their previous level just wasn’t working.

If these schools think that they will make up the money in volume, however, they will likely be disappointed. As AEI‘s Andrew Kelly told US News, these tuition changes might not have much of an impact on students, as they are being offset by reductions in financial aid:

Schools such as Converse and Ashland are counting on higher enrollments to make up for lost tuition revenue, but Kelly says that model does not really address the rising price of attending college.

“I think that these types of reforms, if you want to call them that, are not going to get us very far unless colleges also find ways to contain their costs,” he says. “Maybe you have a big, thick, administrative layer, maybe you’ve invested a lot in student services and amenities, so long as those things continue to be expensive, it’s not clear to me that this is a sustainable solution to the college cost problem,” he says.

Unless these schools are looking at ways to cut costs and deliver better education at a cheaper price, they are likely to continue to be squeezed by the enrollment slowdown. Slashing bloated administrative budgets and a rethinking pending investments in expensive facilities would be a good place to start.

Features Icon
show comments
  • Andrew Allison

    “Schools such as Converse and Ashland are counting on higher enrollments to make up for lost tuition revenue” is an unsubstantiated assumption. Is it not conceivable that they have recognized that tuition has outpaced its value?
    My guess is that they are either going to find ways to reduce costs to match the reduced income (thereby putting more Ph.D’s onto the job market) or go out of business.

© The American Interest LLC 2005-2016 About Us Masthead Submissions Advertise Customer Service