As college costs keep rising, some schools slash tuition
Along with English literature and the beauty of campus life, recruiters at a small but growing number of private colleges now have another talking point: They're cutting tuition costs.
Two dozen private institutions have cut tuition since 2016, according to the National Association of Independent Colleges and Universities.
Colleges have periodically done such tuition "re-sets," where they dramatically lower costs, since the late 1980s, but it's typically been no more than a couple institutions each year, said Mark Kantrowitz, publisher and vice president of research at Savingforcollege.com, an online guide to college savings plans. But that's changing.
"There's been an uptick since 2011, and this past year we've seen a total of 18, so that's a big increase," he told CBS MoneyWatch. "The increase is a sign that more colleges are struggling financially. I would expect to see this trend continue."
The sizable tuition cuts are being made by little-known institutions vying for a competitive edge, usually again other colleges in their area, and amid calls for free tuition, Kantrowitz said.
The widening price difference between private and public colleges has "even wealthy families starting to ask why pay four times as much for private," the researcher added.
Still, tuition cuts have done little to stem the escalating costs of higher education. Tuition and fees at public and private schools rose at roughly three times the rate of inflation between 2007 and 2018, according to a College Board survey.
"We know the average tuition with room and board is about $48.500, and that the discount is as high as 50 percent at many institutions, from list to net price," said David Warren, president of the NAICU. "Institutions are seeing tuition re-setting as a clear tool to use for the purpose of attracting students and retaining them."
The issue is also one of transparency, as many students and parents don't understand the difference between tuition prices and what families actually paid once merit scholarships and financial aid are taken into account. Studies suggest "up to 50 percent of families say they won't apply because all they see is the list price," saud Warren, formerly president of Ohio Wesleyan University.
Only a quarter of college freshman and 38 percent of all undergraduates pay the full sticker price for their education, Kantrowitz found in an analysis of 2015 data complied by the U.S. Department of Education. Students are more likely to pay full price at public colleges, Ivy League schools and the most selective colleges, he found. Students are more likely to get a price break at southern colleges, small schools and historically black colleges.
"When you see a college give out sizable grants to 90 percent or more of its students, it does beg the question, why not charge less?" Kantrowitz said.
One school dialing back the cost of admission is St. John's College, which is cutting tuition to $35,000 in the next school year from $52,734. Nearly all of the 900 students at the liberal arts school in Annapolis, Maryland, and Santa Fe, New Mexico, get merit scholarships or financial aid.
The revised tuition is in line with costs a decade ago, ensuring the college is "affordable and accessible to all qualified applicants," St. John's said in announcing the move.
In a similar vein, Albright College, in Reading, Pennsylvania, slashed tuition by 45 percent, going to $24,500 for the fall 2019 from $44,206 previously. Elmira College in Elmira, New York, made a more modest reduction, bringing its tuition down 15 percent to $35,400 from $41,900.