An increasing number of colleges have been cutting tuition costs to attract enrollment and address financial challenges, but the benefits for students and their families are often limited.
According to Mark Kantrowitz, publisher and vice president of research at Savingforcollege.com, the reduction in headline tuition costs have not had a substantial impact on the net costs that families actually pay for college because financial aid is usually cut as well. Also, the tuition reset is usually a one-time reduction; after which tuition costs increase every subsequent year.
A total of 91 colleges implemented 95 tuition resets from 1987 to 2018, with the frequency increasing from an average one per year for the first 25 of those years to an average 10 per year since 2012. The cuts ranged from a minimum of 4% to 61% and averaged 26%. Another five institutions have implemented cuts for the 2019-2020 academic year, according to savingforcollege.com. Kantrowitz says there are potentially three times as many colleges that could cut tuition costs, but that’s still only a fraction of the several thousand colleges and universities in the U.S.
Most of the schools that have reduced their tuitions since 1987 are nonselective private institutions, meaning they accept 40% or more of applicants, and most are small with enrollments under 5,000 students, including one-third with less than 1,000 students. In addition, most of these schools recruit students regionally and are not well known nationally, though there are exceptions.
The University of Virginia and the College of William and Mary, which is also part of the Virginia public college system, cut tuition by 20% for the 1999-2000 academic year. More recently, for the 2016-2017 academic year, the University of Washington and Washington State University cut tuition by 10%, and Utica College in upstate New York slashed tuition by 42%.
Colleges reduce tuition costs to attract more students, which can boost revenues so long as the institutions can accommodate the increased number of students, says Kantrowitz. Students and their families who might have viewed a college as too expensive may take a second look if the sticker price is reduced.
Whether the cuts achieve that goal depends on the types of students a college attracts afterward. More high-income and middle-income students will help boost revenues, but more lower-income students, who need more financial aid, will not, according to Kantrowitz.
Students and their families, meanwhile, should focus on the net price of a school, not whether a college has reduced tuition or other costs, says Kantrowitz. That net figure is available on a school’s website, under the net price calculator, and on a historical basis at Collegenavigator.gov.
Once accepted, a student can learn the actual net cost for a particular school after receiving their financial aid letter and subtracting the grant and scholarship total from cost quoted. They can then use that number to compare to the net price of other colleges where they were also accepted and potentially try to negotiate a better deal.
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