A solution to tuition inflation
05/16/2013 4:32 PM
05/16/2013 4:32 PM
In the quest to make college education more affordable, the University of Dayton has made a loud statement.
The private Catholic university, with an enrollment of about 11,000 in the city made famous by the Wright brothers, made a series of decisions this spring that give prospective students the clearest picture yet of the bottom-line costs of attending college there. The incoming fall class of just under 2,000 freshmen will be the first beneficiaries.
Dayton calls its innovative tuition and financial aid plan a net price guarantee. It’s not a tuition freeze. Instead, the university is promising that the net tuition costs — after accounting for scholarships, grants, loans and other forms of financial aid — will be the same amount freshman year through senior year of college.
The goal is to make the costs of a college degree more “transparent so families can make the best financial decisions,” said Sundar Kumarasamy, Dayton’s vice president for enrollment management and marketing.
Some lab fees and other charges have been eliminated or folded into the actual tuition cost. In addition, first-year students who file Free Application for Federal Student Aid by March 1 and make an official campus visit will receive up to $1,000 per year ($4,000 over four years) to offset the cost of textbooks.
But another key element of Dayton’s program stood out to me. Under the plan, merit-based scholarships and grants will grow each year to match tuition increases dollar for dollar.
For example, if your daughter earned a $10,000 scholarship as an incoming freshman and tuition increases 10 percent her sophomore year, her scholarship will grow by $1,000 for year two.
Short of a free ride, that’s a heck of a deal. It’s also very rare, according to Mark Kantrowitz, a national expert on financial aid and scholarships.
To attract prospective students, many schools offer generous amounts of scholarships and grants to incoming freshmen — remember this is free money that doesn’t need repayment. But here’s what parents and students often lose sight of after filing away the financial aid awards letter: The scholarships generally don’t go up in value in subsequent years as tuition rises.
As a result, said Kantrowitz, “tuition as a college senior will be about one-fifth greater than tuition as a college freshman.”
It’s the equivalent of having your pay frozen by your employer as health care premiums, groceries and other costs of living shoot higher.
Not surprisingly, Kumarasamy said, the response from parents of students who will be in this fall’s freshman class has been overwhelmingly positive. After all, shouldn’t you know before enrolling the bottom-line billable expenses of a four-year investment in college, rather than just the first-year hit on your wallet?
Though price transparency has become a popular notion in financial aid offices, I doubt many other schools will follow Dayton’s experiment. For one, money will be an issue, since endowment funds may need to be tapped to help scholarships keep pace with tuition inflation.
Still, the tuition program has stirred the dialogue, and that’s always a good thing.
Until more schools adopt Dayton’s plan, here’s the best thing your student can do to boost his scholarhip money to keep up with tuition inflation: Because the process is driven by documentation, the more information you can provide the school about your grades and your family financial situation, the better your chances of getting an adjustment. It never hurts to ask.