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Tuition resets got one thing right: Transparency

by Jared Colston | Apr 5, 2019
JaredJared Colston is a first-year ​​doctoral student in the ​Department of Educational Leadership and Policy Analysis at ​UW-Madison.

In an age of declining (or non-existent) state funding for higher education, tuition is a key way for institutions to generate revenue. Since the 1970s, when some already felt college cost too much, tuition rates have risen precipitously as colleges and universities seek to offset operational costs in the face of diminishing state and public funding. Today, the cost of college is a highly polarizing political issue that runs the risk of hamstringing an entire generation looking for high​-skill/high-return occupations.

The traditional, tuition funding model for higher education institutions (both public and private) has been to increase tuition while offering targeted discount​s through financial aid to offset the often prohibitive cost. Lawmakers and state agencies have often criticized ​this model and sought to freeze tuition at public colleges and universities. Many higher education leaders criticize tuition freezing, claiming that tuition is one of the few malleable policy levers higher education institutions possess to ensure fiscal solvency. These tuition freezes also potentially harm future students, as institutions defer maintenance or reduce services to make up for lost tuition revenue.

Some institutions are looking to shift the paradigm of a high sticker price paired with high discount rates by enacting “tuition resets,” where the sticker price of tuition is reduced across the board, lessening the need for discounts. From an economic, consumerist standpoint, these institutions hoped to relabel themselves as the “best education return for your dollar.” Advocates for reset initiatives hail them as defenders of the economically disadvantaged, ensuring that the tuition price more accurately represents the middle and working class of America.

Many colleges and universities that have instituted tuition resets have seen an initial influx of applications following the reset that offset the lost revenue from the lower tuition. Advocates have pointed to increased enrollment as proof that the student-consumers voted with their feet and that the policy was effective; though, to be sure, these policies were accompanied by an information blitz where potential students and their families received fl​iers and emails informing them of the new, lower tuition price.

In a study of eight private colleges that enacted a reset, only one saw initial drops in enrollment; this college admitted that the drop was due to poor implementation and not getting information to ​prospective students and families in a timely manner. This result ​​highlights the importance of marketing after a reset ​for a college to see increased enrollment.

Critics of tuition reset initiatives point to the discount rates of the current paradigm as being more responsive to equity goals than tuition reductions across the board, which help everyone regardless of need. Skeptics also point to the short-term ideology of these tuition resets, pointing out how unlikely it is that policies like these will survive revenue declines. Early evidence suggests the skeptics are correct: Most of the institutions who have implemented a tuition reset have already returned to their prior tuition levels, and they have once again needed to offer scholarships and grants to discount higher tuition.

Though it seems clear that tuition reset initiatives have drawbacks, we must be careful not to dismiss the genuine concerns these policies have tried to address: For one, tuition transparency is critical to achieve equity in college access. While across the board tuition cuts may not be sustainable for colleges, providing a prohibitive sticker price with conditional discounts potentially leaves college access entirely up to the student. If a student does not know what financial aid options are available to them, they may simply be turned away by the high sticker price. In order for the high​-price/high-discount formula to truly reduce inequities, there must be a more concerted effort to provide students with simple information regarding available financial aid.

Without effort on the institution’s part, a high-price/high-discount tuition model runs the risk of replicating current social and economic stratification. Students who possess the social and cultural capital necessary to navigate the higher education landscape will be the ones who receive financial aid, while those students who do not have these resources at hand will be left to take the full brunt of financing a college degree, or else decline to apply at all.

Though tuition resets may not have had the intended effect, we should not disregard the notion of tuition transparency. Providing capable students with simple information about financial aid has been shown to work, allowing disadvantaged students to tear down the white picket fences of the academy.

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