The roar over high college costs is based on a fundamental failure among consumers to understand the distinction between (a) the cost of educating a student, and (b) the tuition price a college charges to educate that same student. It’s true the cost of higher education has increased over time, just like everything else. And most of the institutions I know do a reasonably commendable job of managing college costs.
Colleges’ published tuition prices, on the other hand, are decidedly out of control.
The prospective students and families that colleges and universities recruit typically have no idea the actual cost of an education until long after they’ve chosen where to apply. That often leads them to rule out institutions with costs they could have afforded, but prices they could not.
In the past few decades, tuition pricing has become a discount game. If a school charges a higher price for tuition, it can give greater discounts to college-shopping students and families.
Who doesn’t love a great discount, right? And when discounts are labeled “scholarship” or “grant,” they nourish egos. They make prospective students feel wanted, needed—even loved. But if those potential applicants choke on the high published price and never apply, they’ll never feel those warm fuzzies. Even worse, they may settle for a generic education when they could have afforded one better tailored to their needs.
It’s old news that across the nation today, the average discount rate at a private college or university is nearly 50 percent. The research I’ve seen over the past 10 years suggests the high-tuition/high-discount jig is up. Dozens and dozens of highly respected U.S. colleges and universities (with names like St. John’s, Seton Hall, Drew, Utica, Elmira, Elizabethtown, Capital, Canisius and Sewanee) are now publishing the price of the education they deliver much closer to the actual costs of delivering it.
In Iowa, my alma mater is leading that charge. Central College’s published tuition price for the 2020-21 academic year is $18,600. That’s comparable to the prices of the state’s three public universities where personalized, one-on-one attention to students pales in comparison to what they receive at independent colleges like Central.
Outstanding and talented students will still receive scholarships as they would at any private college, but next fall those scholarships won’t be disguised discounts. They are funded by donations. Qualified Iowa students also will receive the Iowa Tuition Grant. And students whose families demonstrate financial need will be eligible for need-based institutional and federal grant programs. And work-study jobs. And federally subsidized student loans.
I’m extraordinarily proud of my alma mater for making an eye-opening, life-defining college education available to more students and families who may have, in the past, decided the price to attend was higher than they could ever consider. This represents an important step toward greater levels of awareness, access and inclusivity that significantly increases the chances of perfect student+college pairings. In my book, that’s a win-win for higher education.
Eric Sickler has helped the nation's college and universities conduct market research and elevate their brands for more than three decades. You can reach him at The Thorburn Group, a Stamats company.