Colleges Compete on Price as Consumers Look for Value
As the Obama administration pushes colleges to be more transparent about cost, some schools already are lowering prices to gain a competitive advantage in the new value-driven college marketplace.
Some small liberal arts colleges have slashed the published price of tuition in an effort to be more affordable to middle-class families, reports Inside Higher Education today. Most students at these schools don't end up paying the official sticker price because they receive a combination of grants and aid, so it is unclear how much the cuts will actually save students. However, the high published price can scare off prospective families who don't understand the likely discounts students might receive.
The Inside Higher Ed article notes that Ashland University in Ashland, Ohio, and Converse College in Spartanburg, S.C., have lowered tuition by more than $10,000 for students this fall who pay full price. Earlier this year, we reported Concordia University in St. Paul, Minn. cut its tuition from about $30,000 to $20,000 and The University of Charleston, in Charleston, W.V., reduced its prices by 22 percent to $19,500.
Students pay vastly different prices for their college education, depending on their academic achievement, family's income, and where they live. This translates into the poorest students sometimes paying half what the richest ones pay, a recent article in The Washington Post outlines.
U.S. News and World Report released its Best Value College rankings last week, which takes into account academic quality and net price of attendance. Many of the most selective schools top the list because they are generous with financial aid, along with the resources to help students graduate on time.
Last month, Washington Monthly added a new listing of "Best-Bang-for-the-Buck" colleges focusing on schools that were affordable, served low-income students, had good graduation rates, and low student-loan default rates.
The U.S. Department of Educations plans to come up with its own college-rating system that would give consumers a clearer picture of college costs and performance. The administration has tried to help encourage college-cost comparisons with the Net Price Calculator, but research shows that many schools still have not complied with the new federal program.