Jan. 15

A College Cuts Tuition — and Ends Haggling

Yale University will capture the headlines on college costs today, but an announcement from a small college in Illinois may point to a strategy that could affect many more institutions — and especially those without überendowments.

Looking for a job?

See all 193 new postings

Browse all job listings:

Faculty: 2,602
Administrative: 2,156
Executive: 157
FEATURED EMPLOYERS

“It became clear to us that we were spending an awful lot of time arguing over dollars, and we had competing institutions coming in with ‘here’s my bid’ and then families come back and say ’so and so is giving us another hundred dollars — you give us a hundred dollars,’” said Pride. “We just decided to end the haggling.”

Not only does the haggling hurt higher education and its image, Pride said, but it takes attention away from what students need to be thinking about when considering a college. Blackburn is a work college — everyone must have a job that contributes to the institution, and all students receive a credit of $2,400 for that work. So with room and board, and the new lower tuition rate, total costs are just over $15,000 — low for a private institution. (And Pride said that the ability to eliminate all but a few merit scholarships was based on the belief that tuition is low enough that even low-income students could afford the college, with federal and state aid.)

As a work college, Pride said, Blackburn relies on students truly understanding what they are getting into — and what benefits they will receive. That’s the discussion that was being lost amid the bargaining, she said, and the one she hopes will now take place.

Of course one irony that Pride noted is one that other colleges that have cut tuition have also seen. By cutting tuition and also cutting some of the non-need-based aid the college was giving, the discount rate — the percentage that the college doesn’t end up receiving in tuition — will go way down. At Blackburn, the discount rate has been about 32 percent, slightly less than recent national averages for private colleges. That rate will be cut in half.

And Pride said that tuition revenue for the college will be unchanged — even as tuition is cut by 15 percent.

— Scott Jaschik

Want it on paper? Print this page.
Know someone who’d be interested? Forward this story.
Want to stay informed? Sign up for free daily news e-mail.

Comments

Finally...

...a school with the guts to realize that the upwarding spiral of both tuition and discounting is a recipe for disaster and ill will. I worked for years at a high cost private and when I started to draw up a model that showed how the school could cut tuition and institutional aid and have the same net revenue (and this isn’t PhD in Economics-level work), it was shot down faster than you can say “Chivas Regal effect.” The administration there is still entirely married to the notion that high tuition = high quality. They couldn’t even understand the rise in applications that would result from the positive PR of cutting tuition, regardless of what was done with the aid budget.

But perhaps even better is the elimination of what Blackburn’s President appropriately referred to as the “used car” approach to aid...no more negotiating. Music to my ears.

Congrats to you, Blackburn...a college that “gets it.” And I suspect that you’ll see more applications after word gets out that after all of this talk about costs, you’re one school who’s actually going to do something about it. My hat’s off to you.

DS, at 11:20 am EST on January 15, 2008

tuition & quality

I am curious about the collision course between the two options for tuition strategies for private colleges (after covering costs, naturally). The first is lower tuition as a way to attract applicants. The second is maintaining a tuition level equivalent to peer institutions as a way of indicating quality and therefore attracting applicants.

Can’t do both — I wonder which will ultimately win out?

Annon, at 1:00 pm EST on January 15, 2008

For those interested, there’s a similar article in the Chronicle about this issue. It does a decent job of explaining how non-need-based aid and tuition discounting are pretty important tools for most private colleges. A college would be in an unusual situation to have most of its prospective students falling into a very narrow range of ability to pay, which is the only way that a no-merit-aid/no-haggling approach works.

anonymous, at 1:50 pm EST on January 15, 2008

A Recruiting Perspective

I’ve been a recruiter in admissions for about a decade. Parents do, indeed, often see higher tuition as a sign of quality. Marketing doesn’t always match reality...

Not mentioned specifically in this article is the rather significant Illinois state grants available to low-income Illinois residents attending private colleges in Illinois. Without it, Blackburn likely wouldn’t be able to make this move. $4,400? state grant, $4k Pell grant, $3,500 Stafford loan — possibly a great deal for the low income student who is an Illinois resident.

Or perhaps, with the lower sticker price, more low income students will be attracted to Blackburn. And perhaps, with reputedly no negotiation, these low-income students will end up paying more than before.

None of us can see their concrete numbers to say for certain.

RS, at 3:45 pm EST on January 15, 2008

Needier students will benefit

My overwhelming experience, at colleges I’ve worked at and HS’s I’ve visited, is that the price haggling, negotiating, appealing, whatever you want to call it, is far more prevalent among higher income applicants than it is among the needy. They feel entitled, they’ve accomplished more in their lives by pushing for what they want, etc. It often results in upper-middle to upper class kids who would have attended anyway just getting an extra price break because they come in on April 30 with an award letter from another school and tell the Admissions Office “beat this offer and I’ll give you my deposit.” Parents get to keep more money for the annual trip to the Caribbean, school gets less net revenue.

By eliminating these aid expenditures that do not result in increased enrollment, Blackburn is making more aid available to those who genuinely need it.

DS, at 5:10 pm EST on January 15, 2008

I disagree with the previous post. In fact, my son is in that position right now where he has worked extremely hard his entire HS career to keep his grades on the top while holding leadership positions and hundreds of hours of community service. He has applied to two colleges that have eliminated merit scholarship. We are middle class and can’t afford the $24,000 price tag but we won’t be getting needbased funds. So my son will not be going to those colleges, he needs the merit based scholarship. These colleges that don’t offer merit scholarships will be losing the middleclass top notch students. They’ve worked hard for it and it’s a shame that a school would choose to have a 3.0 student that hasn’t applied themselves in HS, just because they are need based. They will get the needy and the rich and the middleclass is squeezed out one again!

Laurel Postmus, at 10:55 am EST on January 22, 2008

Jobs Related to A College Cuts Tuition -- and Ends Haggling

or search for jobs directly.

Director of Operations and Financial Management
University of Colorado

Posting Description: Applications are being accepted for the position of Director of Operations and ... see job

Student Accounts
Corinthian Colleges

Everest College, a respected member of the Corinthian Colleges’ network of schools, is dedicated to helping students ... see job

Director of Financial Aid
Baltimore City Community College

The Director of Financial Aid administers federal, state, institutional and other financial aid programs and is responsible ... see job

Sr. Manager for Tax Reporting
Harvard University

Global Business Compliance

Duties And Responsibilities: The Senior Manager for Tax Reporting ... see job

Exec Dir Risk Mgmt & Insurance
University of Pennsylvania

The nation’s first university, Penn is a world-renowned leader in education, research, and innovation. Situated on a ... see job

Endowment, Gift and Chart of Accounts Administrator
Harvard University

CHART OF ACCOUNTS 1. Creates, modifies, disables and re-enables chart of accounts values for all School of Public Health ... see job

Director of Financial Reporting and Internal Controls
Harvard University

Recording Secretary’s Office

Duties And Responsibilities: Under the general director of the ... see job

Contract & Grants Analyst
University of California, Riverside

The University of California Riverside invests in your future through employee training and career development, access to ... see job

Adjunct Faculty, Business: Accounting, Management, Economics
Joliet Junior College

Joliet Junior College is located in the Chicagoland area. JJC offers over 100 degree and certificate programs in the arts and ... see job

Vice President for Business and Financial Affairs
Southwestern College

Southwestern Community College District invites applications for the position of Vice President for Business and Financial ... see job

A College Cuts Tuition — and Ends Haggling

Related stories

Comments

Finally...

tuition & quality

A Recruiting Perspective

Needier students will benefit

Jobs Related to A College Cuts Tuition -- and Ends Haggling

Director of Operations and Financial Management University of Colorado

Student Accounts Corinthian Colleges

Director of Financial Aid Baltimore City Community College

Sr. Manager for Tax Reporting Harvard University

Exec Dir Risk Mgmt & Insurance University of Pennsylvania

Endowment, Gift and Chart of Accounts Administrator Harvard University

Director of Financial Reporting and Internal Controls Harvard University

Contract & Grants Analyst University of California, Riverside

Adjunct Faculty, Business: Accounting, Management, Economics Joliet Junior College

Vice President for Business and Financial Affairs Southwestern College