Tuition Cuts

A handful of colleges announce one-time tuition cuts each year.

These colleges hope that the publicity from the tuition reset will help them attract and recruit more students, thereby, compensating for the lower tuition revenue per student with increased enrollment. Total undergraduate enrollment increases with decreases in tuition, as shown in this chart based on data from the 2011-12 National Postsecondary Student Aid Study (NPSAS).

Total Enrollment by Tuition Chart

For example, when Bethany College of West Virginia cut its tuition in 2002-2003 by 42% from $20,650 to $12,000, it was able to attract 60% more freshmen, increasing total campus enrollment by 13% to 875 students. Financial aid was also cut by 43%. The combined impact of the increase in enrollment and the cut in financial aid yielded a net increase in total tuition revenue despite the decrease in tuition rates.

Types of Colleges that Reduce Tuition

Most of the colleges that have implemented tuition cuts are not very well-known nationally, instead drawing most of their enrollment regionally.

For a college to benefit from a reduction in tuition, the college must have significant excess capacity, sufficient to absorb an increase in enrollment.

For a tuition cut to be effective, cost must be a primary factor in the students’ decision to not enroll. Typically, the college will have had above-average tuition for the region prior to the cut and below-average tuition afterwards.

None of the colleges that implemented tuition reductions appear to have been affected by the “Chivas Regal effect,” where high price is associated with better quality. So, there was little risk that the tuition cut would be perceived as a reduction in institutional quality. None of the colleges implemented tuition cuts in conjunction with other visible cost-cutting measures that were perceived as hurting institutional quality.

The tuition cut must also be dramatic, at least 20%. Sometimes, the cut will be designed to reduce tuition below certain psychological thresholds, such as round numbers, or to roll back tuition by a decade or more. The tuition cut must be big enough to generate significant publicity for the college, to help the college attract a big increase in the number of applicants. Most colleges launch big PR campaigns in conjunction with the tuition cut.

Impact on College Affordability

One-time tuition cuts generally do not reduce the financial burden on students who receive financial aid from the college, because the net price does not change. The tuition cuts are accompanied by corresponding cuts in financial aid spending. Full-pay students and other high-income students, who do not receive grants and other types of gift aid from the college, will save money from the tuition cuts. One of the goals of a tuition cut is to attract more full-pay students.

Tuition cuts are necessarily one-time events. All colleges that have cut tuition have returned to tuition increases in subsequent years.

Colleges that have Cut Tuition

School Tuition Cut Year of Cut
Abilene Christian University (TX) (one program) 50% 2003-2004
Alaska Pacific University 34% 2014-2015
Albertson College (ID) 30% 2003-2004
Ashland University (OH) 37% 2014-2015
Belmont Abbey College 33% 2013-2014
Bethany College (WV) 42% 2002-2003
Blackburn College 15% 2008-2009
Bluefield College (VA) 24% 1998-1999
Burlington College (VT) 25% Summer 2012
Cabrini College (PA) 12.5% 2012-2013
College of William & Mary (VA) 20% 1999-2000
Concordia University (MN) 33.7% 2013-2014
Converse College (SC) 43% 2014-2015
Eureka College (IL) 30% 2004-2005
Harrison College (IN, OH, NC, online) (9 programs) 10% Winter 2013
Heidelberg College (OH) 28% 2002-2003
Lincoln College (IL) 24% 2012-2013
Marlboro College (VT) 8% 1999-2000
Muskingum College (OH) 29% 1996-1997
North Carolina Wesleyan College (NC) 23% 1996-1997
North Park University (IL) 30% 2005-2006
Ohio Northern University 20% 2014-2015
Penn Foster College 28% 2009-2010
Pine Manor College (MA) 34% 1998-1999
Seton Hall University (NJ) 61% 2012-2013
Sheldon Jackson College (AK) 42% 1998-1999
South Dakota Colleges (just out-of-state tuition) 50% 2006-2007
Thiel College (PA) 27% 1998-1999
University of Charleston 22% 2012-2013
University of North Texas (Oklahoma residents only) 45.5% 2015-2016
University of the South (Sewanee) 10% 2011-2012
University of Virginia (VA) 20% 1999-2000
Waldorf College (IA) 30% 1987-1988
Wells College (NY) 30% 1999-2000
Westminster College (MO) 20% 2003-2004
William Peace University (NC) 7.7% 2012-2013
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