As rising tuition costs cause concern for college-bound high school students and their families, Randolph College has announced a reduction of about 35% in tuition, room and board in 2020 in an effort to bring more clarity and transparency to its pricing.
Tuition will drop from $40,521 to $25,000, and room and board will decrease from $13,580 to $11,000.
Randolph President Bradley Bateman hopes the change will narrow the gap between the “sticker price” and what students and their families actually pay for a Randolph education.
“The whole system is broken, frankly, and this is an effort to help un-break it and make a system that can work for more families,” Bateman said.
Like most private universities, in the past Randolph College has followed a high-tuition, high-discount model — one that offsets steep tuition costs with large financial aid packages. Despite the advertised rates, most private colleges only charge half the sticker price after the financial aid packages have been awarded.
The latest data from the National Association of College and University Business Officer’s tuition discounting survey indicates the average discount rate for college freshman at private institutions is more than 50%.
These price resets — like the one announced by Randolph last week — seek to tell a more honest story, according to Lucie Lapovsky, an economist and expert in higher education finance. Lapovsky offers consulting to many major colleges, and it was her reporting on price resets that drew Bateman’s attention.
Across the country, colleges and universities are changing their pricing strategies to encourage more applicants — particularly those who are deterred by high costs.
Tuition prices are rising between 2% and 4% almost every year, said Lapovsky, though colleges and universities are finding fewer and fewer students are willing or able to pay the published rate, leading to larger financial aid packages.
Wendy Kang, director of Finance Policy and Innovation at the State Council of Higher Education for Virginia, said the agency has had no indication those costs will stagnate — in fact, Virginia and national trends indicate costs will continue to rise.
“It’s the way it’s always been in higher ed,” Lapovsky said. “And higher ed is often slow to change.”
Bateman said he has been trying to make this tuition cut for seven years, with some resistance from the board of trustees.
“We saw some data last year that 60% of high school seniors and 50% of parents take colleges off of application lists because of sticker price,” Bateman said. “High school students from lower-income families are missing the opportunity to get a great personalized education because the sticker price is so high.”
Most families don’t know about the discrepancy in pricing — and as a result, the admissions process tends to favor families with the knowledge, time, and resources to navigate the system.
“This gives them a more transparent and authentic look at what it would cost to come to Randolph,” Bateman said.
Though ultimately the net price will remain largely unchanged, resetting tuition, room and board allows the sticker price to be closer to what families actually pay for a Randolph education — a strategy Bateman hopes will grow the pool of Randolph College applicants.
Randolph College currently has 620 students enrolled, 163 of which are new students.
According to Bateman, the college’s strategic plan calls for 5% growth in the entering class each year for the next five years. It hopes to grow the applicant pool enough to meet or exceed that growth in the student body.
Lapovsky noted many private, liberal arts colleges are resetting their prices to attract students who overlooked the colleges because of the high initial sticker prices. Her research showed most schools that have made the change have had increases in inquiries, though in many schools it took two or more years before the applicant pool began to grow.
“College is something that so many of us go to, but the question is about the price,” Lapovsky said. “Price ought to tell us something, and it doesn’t when we’re talking about higher ed.”
Sweet Briar College initiated a similar price reset in 2017, part of a multi-prong initiative to keep the school afloat after it nearly closed in 2015 amid financial difficulties. Sweet Briar cut its price 32% — down to $34,000 for tuition, fees and room and board — hoping to boost enrollment and compete with public university pricing.
Sweet Briar President Meredith Woo said it was one of the first institutions in Virginia to enact a decisive tuition reset program.
“There is a great virtue to having a public price or sticker price which resembles reality,” Woo said. “In American higher education, especially in private higher education, there is a tendency to list a very high price of tuition and then offer a very high discount ... we don’t think it should be like that. We owe it to American parents to provide them with a very transparent, very clear idea of what net price is going to be.”
After initiating the price reset, Sweet Briar saw a 30% increase in enrollment of new students — though Woo stressed that it was hard to isolate if this was because of the tuition reset or other academic reforms happening at the college at the same time.
As other universities, like Randolph, begin to follow suit across the country, Woo said she will be interested to see what happens.
Randolph College’s tuition cut will begin with the fall 2020 incoming class, with no negative impact on current students’ net tuition and fees.
Sarah Honosky covers Appomattox and Campbell counties at The News & Advance. Reach her at (434) 385-5556.