College Tuition: Reset! | God's World News

College Tuition: Reset!

01/02/2017
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    Some colleges redistribute the money from full-paying students to others as scholarships. (R. Bishop)
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    Many college students aren’t aware of where a lot of scholarship money comes from. (AP)
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Nestled between Philadelphia and Valley Forge, Pennsylvania, sits a small liberal arts college. Its carefully manicured, 56-acre campus and stone mansion look fit for British royalty.

It’s easy to see why some prospective students want to attend Rosemont College. But one thing stood in the way. Tuition alone carried a $32,620 price tag in 2015-16.

Most students at Rosemont don’t pay full tuition. Even so, the high starting point scared many away without even a campus visit.

After a yearlong study, Rosemont slashed tuition by 43 percent. For the 2016-17 academic year, tuition dropped to $18,500. Applications jumped by 64 percent!

How could Rosemont afford the huge cut? Like many private colleges—and even a few public ones—the published price was artificially inflated.

Setting the cost high lets colleges give discounts in big financial-aid packages. This makes incoming students feel valued. They think they’re getting awarded. But in reality, this is the game of “unfunded college aid.” No one donated the discounts. Colleges move money from full-paying students. Or they reduce charges that were unnecessarily high in the first place.

Until the 1980s, nearly all financial aid was based on need. That made college costs pretty straightforward. Families who earned less, paid less. Foundations and private donors funded scholarships for needy students.

But between 1978 and 2014, costs skyrocketed—1,225 percent! So-called “merit-based scholarships” proliferated in the same time.

One of the unintended consequences was less donor aid. As tuition went up, one student’s full payment was harvested to give discounts to another. Private donors felt their money could be better used elsewhere. They didn’t fund as many scholarships. That trapped some schools in the situation they created. If they didn’t overcharge some, they couldn’t attract others with reductions. Costs kept going up. Applicants dropped off.

The tuition reset seems to be working for Rosemont. Even though lowering tuition meant decreasing discounts, students still saved an average of $815 this academic year.

Inflated tuition conditions exist on Christian campuses too. Some say that’s deceptive. Students who pay full price or close to it often accrue college debt. They graduate with big bills to reimburse. That doesn’t seem right.

P. Jesse Rine is assistant provost at Grove City College—a private Christian school. Grove City doesn’t use unfunded aid. Rine says at the very least, “Colleges have an ethical responsibility to disclose how much of a student’s tuition payment will be used to support a classmate’s unfunded financial-aid package.”

Honesty does seem reasonable. But an even better way may be to return to real-cost education, with private scholarships from foundations and donors who willingly offer support.