It appears some colleges and universities are finally getting the message: Soaring costs are threatening to put higher education out of the reach of many prospective students, while the debt burden is growing among those who are forced to borrow money to attain their degrees.
In response, several colleges and universities announced they would cut tuition costs for incoming students -- some by as much as 43%. This sounds fabulous, but are these sticker-price reductions really making college more affordable for the average student?
Small colleges lead the way
Schools implementing tuition cuts are generally not household names, but that doesn't mean they aren't well-regarded. Ohio Northern University, for instance, is ranked No. of all Midwest regional colleges in U.S. News & World Report's "Best Colleges" list. In October, Ohio Northern said it would reduce tuition by 20%, as well as guarantee graduation in the four-year time frame dictated by bachelor degree programs. This new decree has been dubbed "The Ohio Northern Promise" and will commence with the 2014-2015 school year.
Another Ohio school, Ashland University, has also pledged to do its part. It will begin charging $10,000 less this year, beating Ohio Northern's discount handily with its own 37% reduction.
Converse College in South Carolina is offering a declared tuition abatement of 43%; it will start charging a mere $16,500 this year, compared with the previous price of $29,124 for full-time undergraduates. Minnesota's Concordia University has slashed its own price tag by $10,000, which reduced tuition to the same level charged 10 years ago. Belmont Abbey College in North Carolina cut tuition by $9,000 for incoming students in fall 2013, while Alaska Pacific University has trimmed its costs of matriculation by a full 33% -- from $29,700 to $19,500 per year.
Accessibility concerns or marketing ploy?
How can these schools afford such deep discounts to tuition prices? Alaska Pacific noted that cuts were possible because of income from fundraising and investment properties, while Concordia said short-term costs will be covered by donations to its annual fund and endowment until an expected spike in enrollments takes up the slack.
The main reason schools can afford to slash tuition, however, is because very few students actually pay the advertised sticker price. As a recent piece in The New York Times pointed out, smaller schools have historically set tuition costs artificially high, then discounted the actual price. This enables them to avoid looking "cheap" when compared to Ivy League schools.
While much of the ballyhooed rate cuts are more style than substance, some note that one group of students, those who don't qualify for need-based aid, should benefit from the changes.
The real winners, however, are likely to be the schools themselves. As Concordia noted, it fully expects expanded enrollment to make up for any revenue losses. The experience of other schools tends to support that view: Two Ohio colleges, Muskingum University and Lourdes University, reported increased enrollment after trimming tuition years ago.
Still, the changes are laudable and show that some institutions are paying attention to concerns about rising college costs. For now, at least, the movement seems limited to smaller, regional schools -- so don't expect a drop in tuition at the Ivies anytime soon.