Could College Affordability Become Fashionable?

Last week my best friend was complaining to me about how expensive Mount Holyoke College is. My friend’s daughter is a sophomore at the women’s college and she makes too much money to qualify for any financial aid.

My friend can afford the tuition, but for the first time she was expressing her resentment that any college should cost that much. Nobody is going to feel sorry for an affluent mother, who is unhappy that she would end up paying a quarter million dollars for her daughter’s diploma, but I’m mentioning it because of a move Mount Holyoke made recently.

The school announced that it was going to freeze tuition and room/board for the next year. I wrote a post last week about schools that were freezing tuition, offering a four-year tuition guarantee or in some other ways making their institutions more affordable. Arguably, Mount Holyoke stood out because it is a prestigious school that didn’t need to make this move. Here is my post:

Where Can You Find Cheaper College Prices?

Today I received a thoughtful post about why Mount Holyoke’s move matters that was sent to me by John Lawlor, the founder of  The Lawlor Group, a leading higher-ed marketing firm.  The think piece, which Lawlor posted on the firm’s website, was written by Dan Lundquist, a respected higher-ed veteran, who has worked for many years in the enrollment-management trenches.

It’s definitely worth reading Lundquist’s piece to the end:

The Hot New College Amenity: Affordability

A lot is going on in and around higher education now. Politicians pontificate, trustees debate tuition increases, parents worry about tuition increases, and high school students are swamped with recruiting material.

When colleges discuss tuition pricing, there can be a disingenuous “this is going to hurt me more than it will you” undertone to the dialogue. Disingenuous because colleges have been rolling up price with abandon, and been rewarded for it. But now the unrelenting pattern of price increases, the current economic straight jacket, and some pundits identifying a link between increases in government assistance and further price spikes are combining to turn the tide. Colleges do face the very real possibility of feeling the hurt more than families.

Colleges Freezing Tuition

Mount Holyoke College is perhaps the most high-profile college to realize that, as tough as it will be to leave money on the table now, it might be even tougher not to. By deciding to hold next year’s tuition at this year’s level, Mount Holyoke signals it “gets it” and positions itself in a potentially stronger position in the long term—which is the way leadership is supposed to think. Last year Sewanee: The University of the South reduced tuition by 10%, and the Sage Colleges have held tuition constant for the past three years; both colleges have been rewarded for their stance, with enrollment increasing 24% at Sage.

Most parents (80% in a survey of the Class of 1976 at Amherst College) feel modern amenities—attractive as they may be—are the main culprit in pushing price past a point they can or will pay. And those who cannot pay state in no uncertain terms that there is a clear outside limit to the amount of future earnings (a.k.a. loans) they are willing to garnish. It seems affordability is the most desirable amenity this season. (That same group of Amherst alums unequivocally said that they “hire performers, not college names,” so the residual value of the Old Boy/Girl Network has quickly waned.)

Yes, the wealthy are willing to pay more, but … other information shows that the least affluent are willing to pay close to what the common financial aid formulas suggest. One analysis showed, staggeringly, that with each tick up the affluence scale, the ability to pay quickly and far outpaced the willingness to pay: While the poorest would offer 88% of their expected family contribution, the wealthiest would offer only 24% of their fair share. It seems questions about the value of an expensive college education are pitted against lifestyle concerns, here and now as well as in retirement.

Why Mount Holyoke Move is Significant

The Mount Holyoke story is newsworthy because of the oddly contrarian nature of the decision. When an institution with a $600 million endowment and a robust applicant pool takes the long view and decides hitting the $75,000-a-year mark on annual attendance isn’t a net positive, we know the days of the “Chivas Regal Effect”—when price was a proxy for quality—are over. And according to parents and pundits, good riddance.

Four years ago a dad from California wrote, “Colleges have to learn to operate more efficiently. Maybe the answer is a ‘no frills’ education: forget palatial grounds and touchy-feely ‘campus life’; just bare-bones classrooms, virtual libraries, and dedicated instructors (not researchers).”

Why Other Colleges Are Following

In January a group of private college presidents met at Marco Island, Florida. The topic of the sustainability of the status quo came up repeatedly. In the Q&A of one session, a president offered this view as to why the wake-up call hasn’t been heeded: Most colleges “haven’t gotten to the point of desperation” that would encourage a different approach. Many parents have gotten to that point, and they may be applauding Sage, Sewanee, and Holyoke.

We are reminded that there’s always more room to maneuver, to be thoughtful, and to enjoy a broader range of options earlier rather than later. Why wait to get to the point of desperation?

The value of a college degree has never been more important, nor has the value of an educated citizenry. That is why the issue of college access and affordability is so hot. All stakeholders have a role to play, and leaders on the provider side need to make some difficult and forward-thinking decisions as responsible stewards of an important national resource.

The College Solution

You can now pre-order the second edition of The College Solution: A Guide for Everyone Looking for the Right School at the Right Price. The second edition contains about 90% new content including chapters on evaluating schools financially and academically.

Lynn O’Shaughnessy