Quite the Converse!

There is this, “if you have to ask, you can’t afford it” mantra in the snob-appeal marketplace. Price something high, and it has to be worth it. From Aston Martins and a Chanel dress to a chi chi New York City penthouse, price screams quality. Great lawyers cost most than the shabby ambulance chasers, and a fine plastic surgeon will always command vast sums over the breast-implant specialist for those in the sex trade. But is this trend applicable to education as well?

I’ve always maintained that for the academically gifted but financially impaired, the Ivy League is almost always less expensive than that state-sponsored college or university. It’s not that room, board and tuition are less expensive, but the financial aid flows in generous streams, and many upscale schools actually eschew the loan process, which cripples too many undergraduates for life, in favor or out-and-out grants.

But pricing in private academia has long followed the snob appeal path; put a staggering number on tuition, and folks are simply going to assume that the school – though small and not-so-well-known – is a learning gem at or near the top of the intellectual achievement food chain. To make up for this unrealistic pricing practice, too many schools just routinely give “financial aid” to just about anybody who asks for it. They know their numbers are not real, so they engage in deep discounting under the guise of tuition scholarships.

“At the nation’s [genuinely] most selective institutions, discounts are usually reserved for low- and middle-income students, and a third to a half of students pay the full sticker price. But colleges without a national reputation pass out discounts, in the form of aid, with a free hand — and not just to needy students.” New York Times, December 25^th. They know their numbers are too high, but then, pricing “up” has been a solid marketing tool for decades.

Until now. “Over all, private colleges discounted freshman tuition by 45 percent last year, a new high, according to a survey by the National Association of College and University Business Officers, and the share of freshmen getting institutional aid rose to 87 percent last year, from 80 percent in 2002, also a new high.

“For all but the top-tier private colleges, these are tough times. Enrollment is flat or declining in many parts of the country. In November, Moody’s issued a report finding that more than 40 percent of colleges and universities face falling or stagnant tuition revenue. With family incomes stalled, many bargain-seeking students are drawn to public institutions. And for colleges that are not well known, the race to lure students with big discounts is becoming unsustainable.” NY Times. As the cost of college education continues to rise well above the cost of living increases, as the availability and cost of student loans becomes more difficult (and bankruptcy law targets student loans as almost sacrosanct), there are fewer children heading for such higher education, and a high sticker simply keeps those that are price sensitive but college bound from even applying.

Oh, have times changed. “‘Schools wanted a high tuition on the assumption that families would say that if they’re charging that high tuition, they must be right up there with the Ivies,’ said David L. Warren, president of the National Association of Independent Colleges and Universities. ‘So schools would set a high tuition, then discount it. But when the schools in your peer group all have discounts, it becomes an untenable competition for students, with everyone having to increase their discounts.’…

“When Converse College, a tiny women’s college here, announced that it was ‘resetting’ next year’s tuition at $16,500, down 43 percent from the current year’s published price of $29,000, the talk was about affordability, transparency and a better deal for struggling families.

“But of Converse’s 700 undergraduates, only a small number — in the single digits, its president said, paid the full sticker price in recent years. Almost everyone received a tuition discount from the college, along with, in many cases, financial aid from the state and federal governments… Now, like some other small private colleges, Converse is cutting tuition and reducing discounts. Betsy Fleming, Converse’s president, said the tuition discount rate would drop to 25 percent, well below the national average, from the current 56 percent. The college will still offer aid to talented students, but only to the extent covered by its $39 million endowed scholarship funds.

“While Converse’s reset was the most drastic, others including Concordia University in Oregon, Ashland University in Ohio, Ave Maria University in Florida, Belmont Abbey College in North Carolina and Alaska Pacific University in Anchorage, have also recently announced tuition cuts.” NY Times. At a time where our coming generations face the most globally-competitive work environment in our nation’s history, education has never been more critical. But our tuition practices no longer serve the national interest, and as public education slips down the performance slope at every level, we need to address our priorities if we except to survive as an economic powerhouse.

I’m Peter Dekom, and our academic needs are expanding just as our ability to pay for such requirements seem to be fading.