Dramatic Tuition Cuts Expose a Pricing 'Feint'

Those applying to college over the next few months may notice many private institutions have slashed tuition fees amid the rising cost of living and growing skepticism about whether a degree is worth the cost. But as the New York Times reports, there's more to the price cut than meets the eye. Indeed, the so-called tuition reset "is frank recognition among some lesser-known colleges that their prices are something of a feint." A recent study of 359 private, nonprofit colleges and universities found new full-time students paid just 45.5% of the posted fee after discounts from institutional grants, scholarships, and merit aid, per Forbes.

While New Hampshire's Colby-Sawyer College has slashed its 2023-24 tuition by 62% from $46,364 to $17,500, no student actually paid $46,000. The average tuition was $12,700, the Times reports. "I don't want to call it a game, because it's not a game. But this phenomenon in higher education of a high sticker price, high discount is so confusing to families," President Susan D. Stuebner tells the outlet. "How many families are we not in conversation with because they see the sticker price and say, 'Not for me'?" As many private schools have cut tuition, some public universities have done the same. Others have announced tuition freezes.

Per the Hechinger Report, "the pace of annual increases in tuition and fees—which for years rose three times faster than the cost of everything else—has for the first time since the early 1980s slowed to a rate that’s well below inflation." The median increase in published tuition prices at 20 top colleges for this academic year was 3.7%, per Forbes. Colby-Sawyer says its reset led to a 75% increase in applications immediately following its announcement, though applications have since levelled off. In a sense, the reset is risky as families may equate a low price with low quality. That's likely why "more competitive schools, ones with robust endowments and bigger applicant pools," are uninterested, per the Times. (More college tuition stories.)