Once More: It Is Time to Stop Raising College Tuition
This weekend I had the chance to spend time at Yale and heard a terrific talk by President Maurie McInnis.
I was struck by one of her comments: top research institutions are under attack as never before, in large part because they are seen as elitist and inaccessible. This perception is enhanced by the astonishing tuition levels, which are rapidly closing in on $100,000 per year.
This brings me back to a cause I’ve written about before: universities should stop increasing tuition.
The Tuition Model
Top colleges in the United States have embraced a simple model for decades: increase tuition levels each year and increase financial aid. This way families that can afford to pay more do, and families that need support aren’t affected.
It makes sense.
The Problems
Unfortunately, there are two problems with this model.
First, the high tuition levels create a perception of elitism and inaccessibility. While only a few families pay the full cost, and many pay nothing at all, the perception created by the high tuition sticks. It is tough to argue that a school is accessible when the cost is $100,000, even when there is financial aid.
In the world today, the perception of elitism is particularly dangerous. When politicians are looking for places to find revenue, a school that charges $100,000 per year certainly looks like a good target.
Surely, a school with that type of tuition is wealthy and the domain of the elite.
Second, the model eventually breaks. As the tuition goes up, fewer families can pay it, and more families will receive financial aid. How many families in the United States can pay $400,000 to send just one child to college? Some, but not many.
Eventually even the families that could pay the tuition begin to wonder about it. Why not go to a cheaper school or a school that offers merit scholarships? Losing even a few of the full tuition families quickly becomes a problem.
Today
This is the moment to freeze tuition levels or reduce them just a little for three reasons.
First, it would be big news. This would be a dramatic change. It would receive a lot of attention, and the headlines would be great: We are committed to making our institution more accessible for everyone. We will become more efficient and use our resources to expand access.
Second, the model is officially broken. Schools this year have revealed that despite raising tuition, overall tuition revenue isn’t increasing. Both Brown and Harvard have announced this. I suspect other schools are seeing the same thing.
This means that freezing tuition levels would have no financial impact. Even reducing tuition by 1% or 2% wouldn’t have a big impact.
If anything, the financials might improve! Prosperous families might contribute much more if told, “We are making this move, but to keep it up, we really need your financial donations.”
Third, it responds to the critics. Universities are desperately trying to tell political leaders that they do important work and shouldn’t be a target. This is a difficult argument to make. Reducing tuition? That is a solid response.
The Counter Arguments
Now, some people will argue against this plan. I suspect there are two reasons.
We’ve always done it this way.
This is never a particularly strong argument. It is almost absurd in the current environment. Yes, universities haven’t done it this way before. But the financial model used to work and now it doesn’t. And universities are facing unique threats. Things in Washington are many things right now, but not normal.
It is ethically right.
Some will argue that taking more from the wealthy is always a good idea. Why relax the pressure on those with resources?
One can debate the merits of this economic policy. However, pursuing a strategy that creates a perception of elitism and provides no financial benefit is just not logical.
Fighting the trends isn’t easy. Today, the U.S. isn’t in a liberal high tax/high government spend time.
Sticking with the current tuition model in the current environment only reinforces the perception that universities are out of touch and more focused on pursuing social causes than helping the country and middle-class families.
The Opportunity
I predict that a college this year will move first and get all the benefits of being a leader. Other schools will make similar moves, but they will be seen as followers.
Who will move first? The race is on.
Sounds a bit like Marlboro-Friday for schools. You taught that case in Vallendar once.