Tuition Wars
Posted on December 15th, 2006
(Source: Ursinus College)
What to do if enrollment sags? Raise tuition. Applicants will think you're better. Just be prepared to discount tuition through financial aid for those who can't afford it.
Sound crazy? It's real. Read this from the New York Times:
John Strassburger, the president of Ursinus College, a small liberal arts institution here in the eastern Pennsylvania countryside, vividly remembers the day that the chairman of the board of trustees told him the college was losing applicants because of its tuition.
It was too low.
So early in 2000 the board voted to raise tuition and fees 17.6 percent, to $23,460 (and to include a laptop for every incoming student to help soften the blow). Then it waited to see what would happen.
Ursinus received nearly 200 more applications than the year before. Within four years the size of the freshman class had risen 35 percent, to 454 students. Applicants had apparently concluded that if the college cost more, it must be better.
"It's bizarre and it's embarrassing, but it's probably true," Dr. Strassburger said.
Ursinus also did something more: it raised student aid by nearly 20 percent, to just under $12.9 million, meaning that a majority of its students paid less than half price.
Ursinus is not unique. With the race for rankings and choice students shaping college pricing, the University of Notre Dame, Bryn Mawr College, Rice University, the University of Richmond and hendrix college, in Conway, Ark., are just a few that have sharply increased tuition to match colleges they consider their rivals, while also providing more financial assistance.
The recognition that families associate price with quality, and that a tuition rise, accompanied by discounts, can lure more applicants and revenue, has helped produce an economy in academe something like that in the health care system, with prices rising faster than inflation but with many consumers paying less than full price.
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