Tuition Price Resets in the Age of the COVID Recession
Pandemic has accelerated a years long shift in bargaining power away from colleges and toward families. Which are quite prepared to treat tuition as they would a car's price, something toe haggle over. Here's this weekend's Jennifer Cash Enka When it comes to higher education, bargaining power, is shifting away from colleges and universities and toured families. Josh Mitchell has written about the shift for the Wall Street Journal and joins us now. Josh, What did you find out about tuition, while the pandemic has given families more leverage to bargain for tuition discounts when they are getting their offers from from schools. This was actually a trend that had Ah been going on before the pandemic. So this is a Preexisting friend that the pandemic has accelerated, But basically, schools are in a tight position. Right now. They Are expecting a possible enrollment decline. You know 11 reason, for example, is fewer international students are going to be going to school next year. On DH, You know, families are more price conscious. They've either lost jobs or their businesses of fan businesses. Their businesses have Um, been hurt by the pandemic. And so right now, you have this normal negotiation process that happens to clean family school and family find themselves in a better position now. Teo Archy for reduced to tuition. Josh, we talking about mostly private schools, or does this encompass, um public universities as well? But we are talking mostly about private schools, but this type of negotiation process is increasingly happening. At public schools and the context here is that For years and years. Uh, mostly private schools have turned to consultants to determine how much parents are are able and willing to pay. And so one of the things that's been happening for a while now is schools will collect a lot of data data on perspective. Students. Um this data includes, you know, sex race Where where they live. You know the exact address of where they live, whether their parents are college graduates or not, And this is in addition to what there. S a T scores are and what their high school deepa is. And then they send that data to consultants. You think crunched the numbers and come up with an algorithm to determine how much the next year's class will be willing to pay. And this is how schools for awhile now, particularly private schools have have come up with individual discounts for different students to again extract the most money they can. They're trying to figure out how willing How able you are to pay public colleges are now getting into this because public colleges you know, some of them are struggling, and so they need to figure out You know, how can they extract the most money from the next year's freshman class on DH? The schools will say, Look, this is not just for us to, you know, make money. This is also for us to determine You know which students need the most financial aid, But there's you know, several things going on here. They do want obviously maximize the money they're making. And they also want to determine how to help students that need help. The most. We're speaking with Josh Mitchell, The Wall Street Journal, Josh. Obviously, things air rather chaotic in the world right now, including what will happen in the fall or even in August, when colleges open up again. How far are families going and deciding or not deciding to enroll? Also, that's a good question, because one of the things that's going on this year there was a a consent decree between the Justice Department and one of the main trade groups for colleges that was signed. Late last year, and basically that consent decree said that colleges are now able to recruit students beyond May 1. There used to be this hard deadline where if a student had committed to a school, then other competing schools could not dangle offers, if it was beyond may want will that That industry rule has now been scrapped. Which means there are a lot of students who have even right now have not committed to a school where in prior years they would have done so by now. And so you're seeing a lot of bargaining and negotiation. Between families and schools go on far later in the year, then we would see in prior years and you know, some of the consultants for these families that I'd talk to, you know, are saying this could go on for another few months? Because I think there is a lot of uncertainty, and I think you know families. Not only are they trying to bargain lower tuition, they're also trying to decide whether they're going And there Kids to score whether they're adult Children are going to go to school. Given that they don't know if they're campus. Is there going to be open? They don't know what the experience is going to be like, so there is still a lot of uncertainty.