Subtitled, "Considerations beyond the institution’s competitive market position," this article from University Business magazine looks at a number of important considerations to be made when planning to raise or lower tuition, and in communicating such changes to students and their families. It includes links to useful resources, data sources, and calculators.

---

Whatever the institution’s sticker price, messages about affordability need to be sent early and often to prospective students and their parents. Even at low-cost institutions, some portion of the prospect pool will find the charge above their means, so this advice applies to both public and private institutions. And although every institution will soon offer a net price calculator, most calculators will require families to provide an extensive amount of information to get the estimate.

Consequently, it is not clear how many families will actually be willing to go through the process for every institution they are considering. Offering simple messages (e.g., an income profile of the class showing that students from all backgrounds attend or scholarship programs with clear eligibility criteria and award amounts) to encourage families to complete the aid application process will still be important.

Daniel F. Sullivan, president of St. Lawrence University, looks for the hidden costs of low retention rates, from the student perspective. He notes that four years of attendance at a public institution costs less than at a private institution -... however, given the higher risks of not graduating in 4 years at the public institution, the eventual overall costs might really be closer or even favor private colleges.

In this time of special financial stress for so many American families, the cost of college attendance may seem especially daunting. Prospective students and their families should, therefore, consider the implications of this analysis as they weigh the differences between public and private higher education options—and between high-four-year-graduation-rate and low-four-year-graduation-rate options, whether public or private. It is clear from all the scenarios presented in figure 1 that if a student manages to graduate in four years from a public institution, the total cost of attendance will be lower than at a private institution. On the other hand, the risk of not graduating in four years is much higher at a public institution. In the event that a student attending a public institution does not graduate in four years, but could have done so by attending a private institution, the cost savings of the public choice remain only if the student is non-aided and attending an in-state public institution.

To return to where I began, the single most important step colleges and universities—especially public colleges and universities—can take to lower the student and family cost of college attendance is to improve retention, thereby increasing the four-year graduation rate. With the exception of the rates for highly selective institutions (and these can be higher, with work, as well), the four-year graduation rates of both public and private colleges and universities in America are embarrassingly low.

AGB [the Association of Governing Boards of Colleges and Universities] launched The Cost Project in 2006 with a generous grant from the Robert W. Woodruff Foundation. This multiyear effort identified effective cost-saving measures being taken by public and private institutions and to stimulate a national dialogue on costs -- on campus and throughout higher education. The Cost Project offered guidance for on-campus discussions of cost containment; made presentations at AGB meetings over the two years of the project's existence; and published a series of publications for boards, policymakers, and administrators. 

Links to download the various PDFs are here:

• Strengthening Board Capacity for Strategic Financial Oversight; 
• Strengthening Board Capacity for Overseeing College Costs;
• What Board Are Doing - And Not Doing - in Reviewing Institutional Costs; and
• a Bibliography of Resources.

Please note that this blog entry may or may not be further fleshed out than what you see right now.

The intensity of the protests in California also raises questions about why officials there did not make the less difficult decision of maintaining or increasing enrollments without raising tuition fees, or raising them modestly. This is a strategy that more public and institutional officials across the country and around the world should consider as they deal with continuing shortfalls in public funding for higher education.

Arthur M. Hauptman argues that public institutions should examine carefully the option of increasing enrollments and raising tuition rather than holding tuition steady and capping enrollments. He examines four options: Capping enrollments and cutting sosts; Changing the mix of enrollments; Increasing tuition fees for existing students; and Increasing enrollments while maintaining current tuition fees.

Follow this link to more information.

---

Titled, "The Mote in Thy Brother's Eye," this Inside Higher Ed blog post examines some of the wasteful ways in which wasteful things (eye of the beholder) are cannibalized, or not when institutions do drastic budget cutting.

The possibly wasteful use of tax dollars to support too many institutions is a popular theme, yet the definition of waste is often relative to the self-interest of the observer. It is a waste to spend money on a community college or a small liberal arts college from the perspective of the research-intensive university because flagship institutions may see their mission as more important to the state than the missions of other institutions. However, from the perspective of the students and communities where these other institutions operate, flagship universities are a wasteful luxury that exist to support major entertainment industries like football and coddle research professors who teach very little and whose discoveries end up nurturing the industries of the Northeast, the West Coast, or boom states of the Southwest.

These charges and counter charges often occur in whispers because the political sensitivity of targeting any particular institution is great. If the HBCU's are untouchable for a host of historical and equity reasons, or if small rural institutions are protected by political influence, then an assault on other institutions elsewhere in the state will not be seen as fair. In addition, the issue of cost is more complicated that it might appear. If the state closes a relatively small institution in a semi-rural area and fires the faculty and staff, we can indeed save money.

John V. Lombardi writes about the "endless Sisyphean task of explaining university finances to many audiences" and works hard to describe the difference between the "business model" and the "university model."

Universities are indeed business enterprises, we can explain. They earn and spend money, they produce and sell a wide array of products, and they compete for student customers and high quality faculty employees. They produce teaching and research, they require students and faculty, and they judge their performance on the quality work both perform. Most people in our audiences will recognize all this as more or less appropriate and right. Then we come to the money.

Universities, we can tell them, are revenue engines with a business model fundamentally different from our corporate colleagues. The business world constructs enterprises to produce and sell products or services with the goal of making money. A successful business earns a profit that it distributes to its owners. The business measures its success by the amount of money (or value) created for its stockholders or owners. This is simple. If the business cannot make the product and sell it for a profit, it stops making that product and makes a different one that it can sell at a profit, because the point of the exercise is the profit not the product.

In the university however, we do something different. We engage in an intense and focused search for money so we can produce teaching and research (with all of its associated benefits). The more money we can generate the more and the better teaching and research we can do. The purpose of the money is to purchase quality teaching and quality research and support a quality university environment. We compete with each other not to make a profit but to acquire quality. We define the successful university by the total amount of quality it can accumulate (demonstrated by its products) within its boundaries.

Volume 3, Issue 2 of this Web publication from NACUBO is available on line. It contains useful information about how institutions are cutting health-care costs, especially by turning to wellness and fitness programs, as well as by using other techniques. Among other topics, Duke University's Prospective Health program and Rollins College's 100 percent coverage of preventive care. Even if this does not fit into the scope of your professional responsibilities, or your personal interests, you should ensure that those on your campus who do address these issues are aware of this publication.

It might be easy to overlook College Board reports, or to take them for granted. This item is here to remind you that you can find plenty of good stuff at the College Board, including resources on: Trends in College Pricing 2007, Trends in Student Aid 2007, Education Pays, Tuition Discounting, and the Higher Education Landscape.