A couple of years ago, administrators at the College of Saint Benedict and Saint John’s University, partner institutions in Minnesota, informally “kicked around” the idea of locking in tuition, says Jon McGee, vice president for planning and public affairs. But they quickly decided that the move didn’t make sense for their institutions, he says. Why not?
One university’s unconventional experiment has yielded encouraging results. So how come other colleges don’t seem eager to try it?
Saint Benedict and Saint John’s aren’t huge, and don’t plan to grow.
The colleges aren’t looking to enroll larger freshman classes. They already have high retention rates — about 88 to 90 percent of freshmen at each college return as sophomores. Even if retention were improved, the colleges’ small enrollments — each has under 2,000 undergraduates — limit the amount of additional money this could bring in. Pretty much all additional revenue under a tuition lock would have to come from increasing prices on entering students.
The colleges want to rein in tuition hikes.
Since each year’s tuition increase would only apply to freshmen, it would have to be larger to bring in the amount of money a smaller increase would net from the whole student body. When the administrators modeled out how the plan would work, Mr. McGee says, “the initial price was just too high” — it would be out of line with what competing private colleges in Minnesota are charging.
A price lock is just too risky.
Promising students you won’t raise their tuition requires a college to take a leap of faith. What if costs grow faster than projected? What if a college misses its enrollment targets?
“If everything comes true that you project, you’ll be fine,” Mr. McGee says. “If it doesn’t, if reality intervenes in some way, you can find yourself hemorrhaging money.”
A college can hedge its bet if it has a larger enrollment, he says, or brings in revenue from other sources, like research or adult education. Saint Benedict and Saint John’s are almost exclusively in the business of educating undergraduates in a residential setting (Saint John’s does have a graduate school of theology), which makes a pricing change riskier.
So it’s a direction the colleges won’t be heading in — and least not for now. “I’m quite certain,” Mr. McGee says, “that like many colleges we will, both because we will want to and we will probably have to, continuously assess our pricing model.”
Beckie Supiano writes about college affordability, the job market for new graduates, and professional schools, among other things. Follow her on Twitter @becksup, or drop her a line at beckie.supiano@chronicle.com.
