Utica College is ushering in a new era for college affordability, reducing the cost of undergraduate tuition and fees by 42 percent to fall below $20,000.
The tuition reset will take effect in Fall 2016 for all new and returning students in the on-campus undergraduate program. The 2016-17 published price of tuition and fees will be $19,996, and when the average room and board of $10,434 is added in, the approximate total cost of attendance will be $30,430 per year. That’s before financial aid.
So, how were they covering their costs before and how will they now?
My guess is that this new price might be the “average price” most students paid historically. Utica probably gave out a fair amount of financial aid, now they won’t give out as much (since they won’t need to). I think it’s a smart move, as more students, especially price sensitive students, will now consider Utica more seriously.
Wow. Hope they all follow suit.
If that’s the case, then kudos to Utica!
<<<
My guess is that this new price might be the “average price” most students paid historically.
[/QUOTE]
Yes, I was wondering if this was a school that gave $10k-$15k discounts to everyone to flatter them.
It works really well if they didn’t have a high percentage of “full payers” to begin with.
Freshmen
Financial Aid Applicants 459 (97.7%) of freshmen
Found to Have Financial Need 442 (96.3%) of applicants
Received Financial Aid 442 (100.0%) of applicants with financial need
Need Fully Met 31 (7.0%) of aid recipients
Average Percent of Need Met 76%
Average Award $29,665
Need-Based Gift
Received by 441 (99.8%) of aid recipients, average amount $9,740
Need-Based Self-Help
Received by 429 (97.1%) of aid recipients, average amount $3,985
Merit-Based Gift
Received by 17 (3.8%) of aid recipients
Merit-Based Gift 23 (4.9%) of freshmen had no financial need and received merit aid, average amount $15,586
All Undergraduates
Financial Aid Applicants
That’s pretty cool, I hope Utica sees a surge of applications, and it encourages others to do the same. (other schools to lower costs, that is…)
Either that or Utica is a future Sweet Briar.
Their ability to attract better students with finaid machinations may be limited now. Interesting to compare the stats of the attending students before and after.
Wondering if this is the final thing to happen as part of Utica’s full break with Syracuse University…which apparently is just happening.
http://www.syr.edu/news/articles/2008/utica-college-independence.html
If only this would catch on . . .
Based on Utica’s net price calculator at http://www.utica.edu/enrollment/estimator.cfm (which has the next year’s list price tuition of $19,996 and total cost of attendance of $34,766), a student who does not qualify for any merit scholarships (shown in the net price calculator) but is from a very low income family does not get any financial aid besides a Pell grant and any applicable state aid, leaving a net price that is an unaffordable $28,991.
Note that the GPA and test score threshold to get merit scholarships listed by the net price calculator is quite low. Even a 2.5 HS GPA and 1000 SAT CR+M qualifies for a $2,000 merit scholarship. That brings into question how attractive it is to prospective students – much like Sweet Briar. http://www.collegedata.com/cs/data/college/college_pg02_tmpl.jhtml?schoolId=173 indicates that the average HS GPA of enrolled frosh is 2.94, and the middle 50% test scores are 420-530 SAT-M, 410-520 SAT-CR, 400-500 SAT-W, and 18-23 ACT. These are all significantly lower than for Sweet Briar.
This school wasn’t getting hardly anyone to pay the sticker price and doesn’t provide big fin aid to low income students. So they lose no revenue by just charging the average price directly. But note that their new “every day one low price” still leaves some room for discounting.
Utica’s average price for families $0-30k is $18k; $23k for $30-75k; and $27k for $75+k.
Compare that to selective Vassar – $5k; $9.5k; $31k.
TBD how this transparent pricing strategy works in the market. My guess is it will work fine since Utica selectivity is already pretty low. If the school is trying to play the selectivity game, then you are better off with high price/high discount.
The school says the real cost/revenue reduction from the “42%” decrease is just $1k per year per student. My guess is that they think this pricing strategy will actually increase revenue.
At some point in the past many colleges increased price because they believed people thought a higher price meant a better education and would draw more students. Colleges believed they would become more desirable.
http://wysu.org/content/commentary/costs-college-and-perceived-value
"…A key question about fees is what drives them? …The Times reports, remarkably, that the popularity of a college rises with its cost! (4) For instance, at one private college in Pennsylvania which was losing applicants, the chairman of the Board of Trustees promoted a 17.6% increase in tuition and within four years the size of the first year class rose 35%. “Applicants,” the Times points out, “had apparently concluded that if the college costs more, it must be better.” (5) The Times observes that consumer perceived value is a prime factor at countless institutions of higher education which have “sharply increased tuition to match colleges they consider their rivals,…”
With todays headlines now focusing on student debt and college costs continuing to outpace inflation reduction of full price is the next natural move to bring in more students.
A shift in perception.
At some point in the past many colleges increased price because they believed people thought a higher price meant a better education and would draw more students. Colleges believed they would become more desirable.<<<
[/QUOTE]
So maybe Utica is trying to be the discount shopper type of college. Attract those searching for a deal rather than those searching for selectivity.
But wouldn’t such a low cost seeker find many other choices that cost less than Utica’s new price, like in-state publics?
Honestly, I imagine one of their main problems is that they are in Utica. Upstate NY has so many college choices in much more vibrant areas. If Utica becomes more affordable it should offset their selectivity and location issues.
Nope.
Utica’s existing average price for the $30-75k income range is $23k. Sticker price at nearby and comparable SUNY/Oneonta is…$23k. For $75k and up, Utica costs $27k on average. Utica’s new sticker price is $30k, but they are still going to discount off of that with fin aid and merit aid.
Despite the lack of transparency, the market for net price is pretty efficient once you ignore the shiny object of the sticker price. Utica is already priced to compete with its in-state public competitors. That continues essentially unaffected by the “nominal” price cut. Which is really an effort to rebrand and maintain the current net price.