Fees, tuition, inflation & how to set

Fees, tuition, inflation & how to set

Fees, tuition, inflation & how to set

Before you book, research… While higher education frequently gets blame for putting rising tuition costs on U.S. students, the truth is that college costs only rise slightly when the so-called rising cost of college is studied in a way that can be measured. Those that focus on “rising costs” ignore the question of what motivates students, explains Martina Karsliainen, a graduate student at the University of Kent in London and the author of the thesis. For example, if some students are motivated by the perceived value of a degree versus those that go to college because they have no other way of getting into a competitive field, then perhaps the “rising costs” need to consider what type of information students get regarding cost and value. Instead of viewing rising costs as the defining variable, according to Karsliainen, “To calculate what colleges actually cost, instead of how much they have increased in price per student, make the students assume that their tuition has also increased. For example, the list price would become ‘fee’.” In her project, Karsliainen used this method to look at tuition cost data from the College Board’s calculation tool to see how much colleges and universities charge annually. Did the magnitude of the increase suggest that the market had become more competitive or less competitive? “One method, which we use for this study, is to take a reanalysis of the College Board’s annual College Cost Calculator for 2015 and compare the percentage of new students who paid full price to one of the two many critics of campus pricing use. This allows us to isolate the single message of the data,” explains Karsliainen. “It turns out the difference between finding those students are only joining the market at a high price rather than finding that many of them are currently paying a higher price gives us a snapshot of exactly how much competition for students there actually is.” Perhaps ironically, the understanding of market competition as a determinant of tuition price may have paved the way for her own academic experience at a well-respected university. “After reading about liberal arts colleges such as Mills College and Pomona College in the New York Times in 2012, I was struck by the fact that many colleges charged far less than most assumed a high-demand program of study would cost. This made me curious about colleges that often charged smaller sums for highly competitive, single-year degrees. I wondered what it would be like to go to the ‘B’ college. It is a very prestigious institution with over $750 million in endowment assets.” The implicit ambition of her thesis is to elicit the emotional response of the reader, who must then answer a few questions. If students were more willing to pay a lower tuition, then increased competition for students on campus could lead to lower tuition. “A more fruitful hypothesis is that students’ initial aversion to private college bursar’s charges drives them to enroll in colleges that charge them more. This kind of evidence could make the argument for a more complete analysis of rising costs.” Here is another way of looking at it, Karsliainen explains. “Once we understand the relationship between price and success it allows us to look for additional factors, such as ability to avoid debt or lack of financial pressure, which might make it more affordable to pay full price and thereby overcome competition among colleges. Alternatively, it suggests that students’ current motivations have less to do with what they can afford and more to do with how happy and personally satisfied they feel.” Karsliainen adds, “Those students already aware of what they can afford may turn down discounts that may have been passed along to them in the past in favor of sticking with their current school.” Moreover, if previous students choose one college over another, then one may not get a better return on its investment than another. “Furthermore, it could indicate that students receiving financial aid are less likely to join the college’s private student body and that the more educated one is, the more likely one is to benefit from its institutions,” she says. Not surprisingly, this discussion brings up another tricky dilemma for higher education, according to Karsliainen. “If U.S. colleges start to price themselves far more competitively, then U.S. students may be forced to seek their tuition satisfaction elsewhere.” The authors also suggest that paying attention to the “quality of learning” on a college campus also serves to determine whether or not the institution is a good match for student’s specific situations. “Alternatively, it may suggest that private colleges with higher tuitions may be performing better in terms of teaching quality and the student experience because of their investments in teaching which may lead them to

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