Colleges cut tuition but won’t lower prices

Sunshine Anderson was at Mills College’s annual welcoming ceremony in 2017 when the liberal arts college in Oakland revealed its big news: It was slashing its tuition by more than a third.

Elated, the history major, who is now a senior, immediately spread the word on Twitter and recalled thinking: “Oh, my God, this is going to make a huge difference!”

In the end, it didn’t. Anderson, who uses gender-neutral pronouns, paid Mills about as much as before tuition was reduced.

But the move could pay off for the school.

Mills is one of a small but rising number of mostly private liberal arts colleges that say they are cutting their tuition prices. But what they’re actually doing is reducing their advertised rates, which only the wealthiest students usually pay. At the same time, the colleges are reducing the heavy discounts they offer to everyone else. The result is a new sticker price that more closely reflects what students already pay.

Institutions are making the change out of economic necessity: As college costs have soared, expensive smaller schools risk being bypassed as applicants seek more affordable options.

The colleges hope the truth in advertising will attract more applicants, including transfer students, and increase retention rates.

“We wanted more of the students who weren’t considering Mills,” said Elizabeth L. Hillman, the college’s president. “This was also about communicating that the gap between a public university and a small private college wasn’t as gargantuan as it started to seem.”

The number of colleges “resetting” their tuition rose sharply starting in 2012 to an average of 10 a year, according to an analysis by Mark Kantrowitz, publisher and vice president of research at Savingforcollege.com, who looked at resets through the 2018-19 academic year. From 1987 through 2011, the average was one annually. Last year, the total surged to 18.

So far for 2019-20, five pri

vate colleges have trimmed their tuition prices, by 16% to 57%, Kantrowitz said. They are the University of the Cumberlands in Kentucky, Stephens College in Missouri, St. John’s College in New Mexico and Maryland, Wells College in New York and Oglethorpe University in Georgia.

At Mills, which competes with many highquality state universities, tuition dropped to $28,765 from $44,765, essentially rewinding the price back to its 2005 level. (That figure does not include room, board, meals and other fees, which generally remain the same when schools cut tuition.) Utica College studied the issue for 18 months before it enacted its own plan in 2016.

The New York college settled on a price it thought prospective students would respond well to and guaranteed that all returning students would pay at least $1,000 less.

Beyond cutting tuition, the school doubled its marketing budget and made improvements on campus, including a $4 million renovation of its dining hall, Utica’s president, Laura Casamento, said.

Three years later, Casamento, who wrote her doctoral dissertation in education on tuition resets, said she was happy with the results.

Utica exceeded its overall targets for net tuition revenue each year; enrolled more students, including a significant rise in transfers; and increased retention.

Its students are also graduating with less debt.

“Students and their families were taking institutions off the table based on the sticker price,” Casamento said. “They didn’t even want to have the aid conversation — and you have to have that conversation to understand the net price.

“We really looked at that long and hard,” she continued, “and that is why we went out to prospective students and families and did a pricing study.”