xylocarp wrote:Mike and Karen,
I apologize if you've commented on this before, but do you think we're seeing the beginnings of a trend with law schools cutting tuition? Penn State recently halved their in-state tuition, and University of Iowa just decreased out-of-state tuition by 16.4%. Any chance other schools will follow suit?
I'm very interested to see which, if either, of these two approaches works better. Iowa lowered their tuition. Penn State actually did not. They're just guaranteeing a scholarship ONLY for PA residents that is the equivalent of a half-ride. The "sticker price" remains unchanged.
It begs the question that retailers I think have long faced: Should they reduce the price of their product or should they just put it "on sale"? I think human nature, unfortunately, is that we prefer to be tricked into thinking we got a "bargain" (Black Friday, anyone?). JC Penny experimented with a "No Sales"/everyday low price strategy to try and turn their company around and it failed miserably. On the other hand, I doubt one would ever see 50% Off sales at Nordstroms or Tiffany's. Bentleys don't go on sale. That's probably why to the extent this happens other places, it won't be at the top private schools. (Anyone have a pool going on how high NYU/Columbia/etc. will go before people stop enrolling? $60k /yr? $80k /yr?)
A long time ago, I was talking to a colleague from a private school. He told me about a period in his school's past where their app volume was lagging behind their peer schools. They had been positioning themselves to be the "value" among the similar schools in their region, with tuition below the peer group average. A consultant told them their tuition was too low, that applicants see a lower tuition and assume a lower quality education. They raised their tuition to above the peer average, offsetting it a bit with additional scholarships, and their applications went up.
I get students trying to negotiate scholarships every year that say "XYZ school is giving me more money." I then have to point out their math-fail and how we are still less expensive because XYZ's tuition starts off double what ours is. A lot of students just want to be shown "the love" and would rather get a $20k scholarship at a school with $40k tuition than go to a school that just costs $20k with no scholarship, again, consciously or subconsciously, b/c of a false perception that better educations cost more money.
Then there's the part where USNWR still has a small portion of the ranking for "expenditures per student". Scholarships are expenditures so a school can boost themselves (a little, 1.5% of the overall score) by increasing scholarships, but gets no benefit from cutting tuition.