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Categorized | Paying For College

College Costs – Tis The Season For Tuition Pricing

The cost of college tuition has been rising dramatically over the years — greater than the rate of inflation in most instances. Colleges and universities try to keep these tuition increases at a minimum for their students and families but, unfortunately, budget cuts and reduced funding at the state and federal level sometime dictate a different outcome.

Over the next few months, higher education institutions will be convening their boards and trustees to help establish what their position will be on tuition pricing for the upcoming academic year. When it comes down to it, they really only have three options: Increase Tuition Rates, Freeze The Cost of Tuition, or Reduce Tuition Rates. Let’s take a look at these three options and see the pros and cons for each.

Increase Tuition Rates

Pros:

  • Price (higher) equals prestige…
  • College will be better equipped to meet budget demands and provide more student focused initiatives

Cons:

  • Students will have to find a way to cover the additional costs…
  • College may price themselves out of range for some prospective families
  • Some upperclass students may not return (probably because of other issues but the tuition increase may provide additional justification)

Some tuition increase articles from the last year:

Tuition Freeze

Pros:

  • Keeps tuition rate at the same level and families and students don’t have to worry about absorbing additional costs
  • Provides a marketing tool for the university when trying to recruit prospective students
  • Could help to boost enrollment numbers for incoming and returning students

Cons:

  • University will have to absorb the lack of tuition increase into their budget (may not be a problem for many but with costs rising in every other sector it could be a challenge)
  • Based upon the above, some new student programming initiatives may be delayed indefinitely

Examples of schools providing tuition freezes:

Reduction In Tuition

Pros:

  • Students (and their families) will be holding parties in the streets in favor of this decision
  • Provides a huge marketing edge for the university to use in recruitment of prospective students
  • A reduction in tuition rate may put a college or university in the prospect pool for more families.

Cons:

  • In order to sustain/support this model (tuition reduction) a university or college will need to have steady growth in enrollment.
  • If the tuition reduction is rolled out to upperclass students (and depending on the amount of the reduction), their financial aid packages may need to be adjusted accordingly so that the desired net revenue is still met by the college (University of the South – Sewanee recently got some flack for this approach)
  • Students will not have as much tuition expense to deduct on their taxes using the 1098-T. This is actually a good con! 😉

Examples of some colleges providing a reduction in tuition costs:

So What Do You Think?

After looking at all of these options, what do you think would be the best approach for your university or college to adopt as it moves forward in tuition pricing for the upcoming academic year. Can you think of any other options or approaches to tuition pricing? Feel free to leave your comments, thoughts, or ideas below.

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