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ERIC Number: EJ767216
Record Type: Journal
Publication Date: 2007
Pages: 6
Abstractor: ERIC
Reference Count: 0
ISSN: ISSN-0009-1383
Fixed-Tuition Pricing: A Solution that May Be Worse than the Problem
Morphew, Christopher C.
Change: The Magazine of Higher Learning, v39 n1 p34-39 Jan-Feb 2007
Fixed-tuition plans, which vary in specifics from institution to institution, rely on a common principle: Students pay the same annual tuition costs over a pre-determined length of time, ostensibly the time required to earn an undergraduate degree. Students, parents, and policymakers are demonstrating growing interest in such plans. At face value, these plans have broad appeal. By providing them, colleges and universities can claim that they are offering parents and students the comfort of knowing exactly how much tuition they will be charged during the student's tenure at the institution. This peace of mind is of significant value to those facing the prospect of paying ever-increasing tuition costs. Meanwhile, politicians and policymakers can cite the plans as proof that they are holding down the cost of a postsecondary education. These plans, however, may not be all that they seem. This author contends that, in reality, they offer no actual cost savings, rather they are likely to produce accelerated costs for underclassmen, and to penalize students from underrepresented groups. These plans require that university or system administrators forecast tuition over a relatively long period of time, which in turn necessitates some estimation of inflation, cost increases, and level of future state support. Whether these forecasts are accurate is part of the risk for universities that offer such plans. The primary substantive problem with fixed-tuition plans is that their costs are front-loaded. As a result, the plans are likely to especially disadvantage dropouts, who happen to be disproportionately poor, minority, or first-generation college students. In institutions that adopt fixed-tuition plans, students who do not return for their second, third, or fourth years will have paid a greater per-hour cost than students who graduate, thus incurring a "non-persistence penalty" inherent in this pricing model. To compound this inequity, because underclassmen are typically cheaper to educate than their junior and senior peers, students who do not persist to graduation will pay more per credit hour for the less costly (to the institution) portion of their college education. Add to this the fact that the greater costs paid by students who do not persist to graduation will be used to subsidize the costs of students who do graduate, and the unfairness of this policy is obvious. The author suggests that institutions implementing fixed-tuition plans should have financial aid policies that will account for the front-loaded costs of these tuition plans. (Contains 1 figure.)
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Publication Type: Journal Articles; Opinion Papers; Reports - Descriptive
Education Level: Higher Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A