Since the bottom dropped out of our economy in the fall of 2008, family income has declined and, five years later, shows few signs of recovering. Nearly all net income gain over this time has gone to the top 1-2 percent in the country. Unemployment, underemployment and anxiety about job stability continue to trouble millions of American families. University presidents rightfully argue that a college education is the best investment a young person — or a student of any age — can make. However, those arguments can also make us seem out of touch with the financial realities of many families, especially when American higher education is criticized for ever-increasing tuition rates, escalating student debt levels, and longer times to degree completion.
I am the president of Lesley University in Cambridge, a tuition-dependent, private, non-profit institution. In this particular sector of American higher education, tuition rates continue to rise. In order to enroll students from diverse economic backgrounds, our sector offers most students financial aid that is, in essence, a tuition discount. Although not the case at Lesley, some institutions are already surpassing discount rates of 50 percent. This “high tuition-high aid” model is not sustainable. Families see the high price and never learn about the high aid. Institutions increase tuition rates and discounts, maintaining a large gap between published price and what students actually pay.
Lesley recently took a step to change a pattern that is as discouraging to potential students as it is unsustainable for institutions. Our trustees adopted a new pricing model, reducing our undergraduate tuition rates by 25 percent, from this year’s $32,000 to $24,000, and reducing the institutional aid we provide by the same dollar amount. Each current student will retain the actual value of our four-year aid commitment. Any subsequent tuition increase will be calculated on a lower base, saving every student hundreds of dollars. Federal, state and private scholarships, as well as student and family contributions, will then cover a larger percentage of a lower tuition price. We will continue to allocate institutional funds for student scholarships to further offset this lower tuition price. All of our current students will pay slightly less next year, and prospective students will be able to see more clearly what the real costs are for a Lesley education.
We believe the economic realities since 2008 are reflected in a recent national survey by the College Board and Art & Science Group showing that 54 percent of prospective students don’t pursue their interest in a college due to “sticker shock.” They never learn about available institutional aid because the price scares them.
The understandable reaction of students and their families to price is driving a wedge into higher education enrollments. The deepening divides in income, employment, and access to health care are increasingly reflected in enrollment patterns. More than ever, wealthy students attend selective, highly-funded institutions; financially disadvantaged students disproportionately attend open admissions, poorly-funded institutions; and the declining middle class is stuck in between with limited options.
As our trustees reviewed our traditional undergraduate tuition model, they saw our current year tuition rate of $32,000, growing at 3 percent per year, reaching $43,000 in 10 years. By contrast, reducing our tuition rate next year to $24,000 means that in 10 years our tuition rate will be $32,000, the rate that it is today.
In reducing the tuition rate and the tuition discount, we want to make our price and our aid less complex and more transparent. We want to more carefully align list price with actual cost for prospective undergraduates and their families, so that they know the true cost of a Lesley education.
This greater transparency in pricing does not, in itself, make college more affordable. The sad fact is that even with transparent tuition pricing and a slower rate of tuition increases, far too many talented young people will remain unable to find a financial path to attend private institutions. Private colleges and universities must pursue new financial models — whatever shape they take — that reduce both real and perceived barriers to access. The education we offer is far too valuable to keep from a growing number of students whose despair over price jeopardizes their determination to earn a college degree.