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A College Cuts Tuition -- and Ends Haggling

January 15, 2008

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.

Blackburn College announced that it will cut it tuition rates for next year by 15 percent, to $13,500. At the same time, however, Blackburn announced it was ending all but a few merit scholarships and completely ending the practice of negotiating with students and parents over aid packages.

"We were spending way too much time on the used-car sales approach and not enough time on the programs," said Miriam Pride, president of the college.

"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.

 

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