Higher Education Faces Tuition Disruption

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“Has college tuition begun to go the way of Walmart-style pricing? College administrators are experimenting with cut-rate models by freezing tuition, slashing sticker prices, and rolling back tuition, driven to discover a way to tip the scales toward enrollment growth,” University Business reports. “So far, results are mixed. Also, the excitement of experimentation is being tempered by the uncertainty of the current college marketplace. And that uncertainty can lead to missteps. ‘Tuition reductions have been going on for years and, while it might be good in the short term and generate good press, it’s not a strategy I recommend,’ says enrollment management consultant John Dysart, president of The Dysart Group. Still, some institutions are taking action in this era of tuition disruption.  Betsy Fleming, president of Converse College in South Carolina, says this year’s freshman class is 40 percent larger than the current senior class, which started in 2010. And requests for visits to the campus have increased exponentially. To what can they attribute that growth? Fleming points to the tuition being reset to $16,500 for 2013-2014, down from $29,124 in 2012-2013. ‘The rollback is stable and we have more control over the aid we offer,’ she says. ‘It communicates affordability up front rather than having a higher sticker price that you then have to explain.’ The school can tag percentage tuition increases to family income. However, Dysart says, the majority of schools lowering tuition are also reducing financial aid by the same amount, so the net doesn’t change. And, historically, enrollments don’t wind up increasing much. ‘Those colleges are right back where they started from. Some have miscalculated and ended up with a net drop in revenue,’ he says.”

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Publication Date: 11/12/2013

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