A number of colleges and universities are attempting a tuition reset in an effort to better address the ongoing concerns regarding the prohibitive cost of higher education.
Rick Seltzer, who covers business and management for Inside Higher Ed takes a close look at this new and sometimes controversial approach in The Tuition-Reset Strategy. The post examines both the strategy and the tactics that 8 private colleges and universities are employing in an effort to help contain student costs and grow enrollments. While acknowledging their good intentions, Seltzer’s article looks at the risk that these institutions are taking on.
Who really benefits from a tuition reset?
Traditionally, colleges and universities have maintained a high price and high financial aid model. This meant only students whose families can afford it pay full price while those whose families are less well off paid a discounted price offset by the amount of financial aid they were eligible for. But, by lowering the cost of tuition these schools give those students who can most afford it a discount thus cutting into much needed revenue.
Risk and reward
Seltzer points out that while the number of colleges offering reduced tuition has increased in the past the total number is still relatively low. The eight schools covered in the article will cut tuition from as little as 11 percent to as much as 55 percent with the hope of seeing a 20 to 25 percent bump in enrollments. These are small institutions which in many cases face decreasing enrollments and other financial challenges already. Taking such a significant risk should enrollments fail to materialize raises the question: Is this a case of over promising and under delivering? Many critics think seem to think so.
The bottom line
The post looks closely at two of the schools who announced tuition resets for next fall, Birmingham-Southern and Drew University, details the important role that successful marketing must play in order to make a tuition reset effective, and examines the long range impact this new strategy may have.
To read the complete post click here.