Some U.S. Colleges Cut Tuition, Ending Relentless Price Spiral
(Bloomberg) -- Hold on to your mortar board: the cost of a U.S. college education has finally stopped going up.
At least that’s the case at a small handful of liberal arts colleges that need to lure students in the middle of a pandemic.
Oberlin College, in Ohio, has cut its tuition by $10,000 for all new students. Nearby Denison University is offering an even better deal for Ohio residents: a $100,000 scholarship over four years. And Davidson College, in North Carolina, has frozen its tuition for the first time in a quarter-century.
The Covid-19 pandemic has upended college life -- and college finances -- for millions. Now, in a sign of what might lie ahead, it also has begun to check the relentless rise in prices that has strained family finances and pushed the nation’s combined student debt to over $1.7 trillion, as admission deans stare down fewer high school graduates.
“The pendulum may be swinging a little bit toward the consumer side,” said Steve Frappier, director of college counseling at the Westminster Schools in Atlanta. “But that’ll also depend on the selectivity of the school and the financial health of the school.”
This year has already been one of unrivaled chaos for admissions offices, with many devising workarounds for students unable to visit campus in person and waiving standardized-test requirements. Freshman enrollment is down 13% this year, according to the National Student Clearinghouse Research Center, which called the decline “unprecedented.”
It’s not yet clear whether large universities with robust endowments and high demand will follow suit. Princeton University in New Jersey cut tuition 10% for undergraduates for the current academic year because the pandemic significantly diminished the student experience. The Ivy League school, one of the richest U.S. universities, is expected to set the 2021-2022 price in April.
The cost for tuition, fees, room and board this year at Oberlin, known for its music conservatory, is almost $76,000. The school had been considering the tuition break as a recruiting tool even before the pandemic, and decided that it should apply only to new students to limit the cost, said Manuel Carballo, dean of admissions and financial aid.
In recent years, Oberlin has taken steps to make its application process easier, including eliminating fees and allowing students to self-report standardized test scores, he said.
Davidson’s president, Carol Quillen, said the freeze wasn’t devised as a strategy to retain students, but to offer certainty on cost during uncertain times.
The initiative at Denison, about 100 miles south of Oberlin, helps make the school more marketable to Ohio residents and “provides some stability to our enrollment,” said Gregory Sneed, vice president for enrollment management.
Denison, where the cost of tuition, room and board and fees is $70,400 this year, opted against making financial need a consideration for its $100,000 scholarship because applying for aid is already a complex process.
“We just want this to be simple in a complicated year,” Sneed said.
Some 1,200 students applied by the Dec. 1 deadline at Denison, which has a total undegraduate enrollment of about 2,300.
Some schools are offering more help based on financial need. Grinnell College in Iowa announced last month that financial-aid packages will include grants that don’t need to be repaid instead of loans.
Still, the incentives at U.S. colleges are beginning to pile up as the universe of high school graduates is already shrinking in parts of the country, including some Midwest states, and is projected to decline nationwide in coming years. Schools are trying to ensure they have enough students for the next academic year, especially after the 2020 drop.
“If you’re under-enrolled and under-budget, those are pretty significant consequences,” said Mark Hatch, vice president for enrollment at Colorado College in Colorado Springs. “They’re four-year consequences.”
©2020 Bloomberg L.P.