Posted by: Dana Evans
Tuesday, April 2nd, 2013
Freezing tuition fees: at first glance, it seems to make sense. For prospects, it eases the budgeting fears of families of incoming students by guaranteeing that their tuition fees will remain the same during their four years at college. In return colleges have a retention tool. Students feel more like they are “in contractual partnership” and the penalties for leaving the school are that their tuition fees for their next college are not guaranteed.
But scratch the surface a little and you might find that the negatives may actually outnumber the positives for both students and schools. And more importantly, freezing fees is only a Band-Aid that actually conceals a bigger problem. More on that later.
We recently conducted a study to determine the value of freezing tuition. What we discovered was that guaranteeing fixed tuition for four years did not do much for the intended goals of this program. It did not actually increase enrollment, nor did it improve retention rates. Granted, for some it was a deciding factor in attending that school, but for most it would not have altered their decision to enroll.
I can see how one could conclude that if it appealed to some and detracted from none, then why not have it? In this competitive environment where enrollment is counted one admission at a time, every tool that works, even for a few, is worth it – especially if it’s not costing the college additional money.
And there’s the rub. Does freezing tuition cost the school more money than not freezing? What’s the ROI?
For many colleges and universities, freezing tuition is actually an administrative nightmare. It increases the number of variables exponentially, and that opens the doors for mistakes and misunderstandings.
Let’s face it. Freezing tuition is not being done so that colleges can leave money on the table. Each year a new contract is offered, and that frozen fee is determined based on four years. Chances are, freshman tuition fees for a frozen tuition plan are probably higher than they would be if the fees were not frozen. If we are being honest about it, it’s a marketing gimmick.
However, it is NOT a marketing plan. For some there is the assumption that if you make the announcement, they will come. If that were the case, then everyone would do it. And if everyone did, then you are back to square one – no differentiation.
It’s Value, Not Fixed Budget
Freezing tuition doesn’t address the real issue that prospects ask time and again: What is the true value of a higher education degree? The pressure on colleges and universities is making a case that the cost of tuition is worth it. Will a degree from X College mean a higher paying job than a degree from Y College? This often calls for colleges to take a closer look at themselves, to assess what resonates and what doesn’t, to find out if their “story” connects with prospective students.
There is no substitute for developing a comprehensive and integrated marketing program that differentiates your school from others, one that demonstrates the value of enrolling. And part of this program needs to incorporate a bit of sensitivity to the cost of higher education. You may determine that freezing tuition, with all of its pros and cons, is a good way to address this, but make it a part of a bigger program rather than making it the only program.