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Get an Education for Less

February 07, 2013
February 07, 2013
Student with backpackIt may sound to good be true, but there are some higher education institutions that have actually lowered their tuition rates recently instead of raising them. Now, you may be thinking, “What about all those articles I read about the rapid increase in tuition and how the student loan bubble might be the next to burst?” 
And you would be right to be skeptical. 

However, as tuition has risen to unattainable heights, and the graduating high school classes have become markedly smaller than previous years, some colleges are facing an enrollment crisis. 

In order to stay relevant in an over-saturated market, some colleges are becoming more like country clubs by building high-end fitness and recreational facilities, others are searching for new revenue by integrating online degrees that appeal to a broader market of students, and other schools are lowering tuition.

Now, you may be wondering how schools are able to afford to lower tuition; after all, endowments and public funding are down at most universities. So, don’t be fooled by the headlines. Most universities are using tuition cuts as a marketing tactic. Most plans for cutting tuition also bring cuts to financial aid given to students, meaning that the profit the school makes on tuition is probably not changing all that dramatically. 

The tuition cuts seem to be a mostly superficial change – a redistribution of money. Instead of charging the highest-income students and families the most tuition and having them subsidize lower-income students, the tuition decrease is simply changing the amount of money coming in and the need for financial aid dollars going out.

Here are some notable institutions that have recently lowered their tuition rates:

University of Charleston

The University of Charleston, a small school in West Virginia, decided to decrease its tuition by 22 percent. The theory is to keep the tuition under $20,000 a year as a way of attracting more applicants to the school (CNNMoney). In order to achieve this, they are being forced to be make some innovative spending cuts. 

The school has implemented faculty sharing programs with nearby schools and cut financial aid spending. The amount of financial aid that will be awarded in the upcoming school year will be cut by $5.5 million, but every student will be required to pay less tuition. They will still have some financial aid available – just not as much as in previous years. In order to make up for the reduction in tuition dollars, the school is hoping to enroll more students – potentially expanding enrollment by 79 percent in the next five years.

Seton Hall

One of the most notable recent cases of a school lowering its tuition was Seton Hall, which reduced its tuition by 60 percent for the 2012-2013 academic year. This is a remarkable cut that took the school’s price down to that of public universities in the area. But there’s a catch: Only students who are in the top 10 percent of their high school class, have good ACT or SAT test scores, and are able to maintain a 3.0 GPA are allowed the reduced tuition. If a student doesn’t qualify for the program, the tuition balloons to over $33,000. (See Seton Hall’s website for more eligibility information). 

This price reduction was put into place in order to attract more top-tier students from New Jersey, and only incoming freshman are eligible – making the price reduction seem more like a publicity stunt than a way to help students reduce their financial burden (NJ.com). In the end, this tuition reduction more closely resembles the differential tuition programs for different majors than an across-the-board tuition cut. It takes a reduced tuition for some students, then subsidizes the program using the higher tuition collected from students with lesser academic achievements.

Belmont Abbey

After Belmont Abbey cut its tuition by 33 percent, the president of the school commented to CNN, “It seemed a little bit like madness, with costs going up each year. We were raising tuition each year, only to give it back on the financial aid side to help students be able to afford it. It’s time to stop the madness.” 

Belmont Abbey does not expect to increase class sizes or have any dramatic spending cuts to make up for this tuition loss, since all of the money cut will simply be removed from the amount that will be distributed via financial aid.

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