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The Era of Permanent Tuition Increases Comes to an End

Monday May 6 2013

Private U.S. colleges, worried they could be pricing themselves out of the market after years of relentless tuition increases, are offering record financial assistance to keep classrooms full.

The average "tuition discount rate"—the reduction off list price afforded by grants and scholarships given by these schools—hit an all-time high of 45% last fall for incoming freshmen, according to a survey being released Monday by the National Association of College and University Business Officers.

"It's a buyer's market" for all but the most select private colleges and flagship public universities, said Jim Scannell, president of Scannell & Kurz, a consulting firm in Pittsford, N.Y., that works with colleges on pricing and financial-aid strategies.

Colleges have believed in the Holy Grail of Inelasticity of Demand for their product for the last three decades. Tuition has relentelessly increased. Now my prediction of turn in that tidal wave is on the horizon. Private colleges are scrambling to hold on to students. This may be an advantage for TAMUSA with its lowest in the local market rates. 

 

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3 responses to “The Era of Permanent Tuition Increases Comes to an End”

  1. Luis Martinez Avatar
    Luis Martinez

    It is about time. The prices over these years made me cringe as my children approached College age and then, compounding that with my own efforts was almost overwhelming. I hope this leads to some reforms that will benefit society as a whole. College degrees should have some value beyond tagging students with exorbitant debt!

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  2. Binu Sharma Avatar
    Binu Sharma

    Some good news for somebody like me who wants to further my education. I wish the education could be affordable to all ( having those subsidized and unsubsidized loans from government would not make the education affordable as some people would think!) so that people don’t have to think twice about completing their education.

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  3. Gilbert Alvarez Avatar
    Gilbert Alvarez

    Dr. Elam,
    I always praise state colleges for having better facilities (in my opinion), more professors, campuses, and up to date gear because of state funds. Maybe I’m missing something, but I believe reality or good sense is settling in for those who wish to get good education without a price tag that is way too expensive. Sounds like supply and demand is getting the better of private colleges. On a good note, TAMUSA, is a bargain for the price you pay.
    Thanks for a good article again.
    Gilbert Alvarez

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