Here Is Why Lowering College Tuition Breeds Competition

In today’s society, where students are competing against each other to get into the college of their dreams, an ethical question arises. That question is, in the midst of that, are schools allowed to use financial aids and grants to try to get more students to apply to their school? This is an ongoing issue that has been lurking around unnoticed.


What’s Going On?

What's Going On

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As tuition costs at four-year private and public colleges are rising, many schools are also offering higher grants and aids that don’t need to be repaid. For example, at George Washington University, almost 50% of the undergraduate students receive the schools’ Presidential Academic Scholarship that awards students of $5,000 to $30,000.

Awards such as that help campuses lure students into their school by easing their concerns on student tuition.

David Strauss, a principal at a higher-ed consulting firm Art & Science Group LLC, says that schools are using retailing strategies: “Shoppers generally prefer to buy a $60 shirt at 50% discount than a shirt originally priced at $30.”

Financing your Future, Financial Aid Evening!
Reps will be available to
discuss FAFSA, Grants,
Scholarships & additional funding opportunities
Thursday Oct 25th 5:30-7:30 PM pic.twitter.com/C9EcmTPOqC

— C-TEC of Licking Co. (@cteclickingco) October 16, 2018

Sandy Baum, the co-author of the 2018 Trends in Higher Education report said that tuition rose rapidly between 2007 and 2011, but federal expenditures on scholarships and financial aid also increased dramatically, helping student finance their education. Increased grants and federal aid from schools give students the financial freedom to borrow less from banks or any loaners.

Grants, tax benefits, and federal aid for private institutions have risen up to $21,220 this year, a steady increase of $7360.00. For public institutions, that number is $1520.00.

Ironically, this poses a problem.

Because of the lowering prices of tuition in many colleges, this puts many lower-quality colleges at risk, driving the enrollment numbers down. Around 1 out of 5 small private colleges in trouble according to Wall Street Journal.

This has become a battle between colleges to try to get more students to enroll using financial aid to gain an edge on each other.

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This isn’t something that has been happening recently. Since 2017, reports of colleges luring students have been reported as they would use enticing methods such as telling them that they would give them a discount in their tuition, with goals of prompting them to apply. Hampshire College, Elizabethtown College, Washington & Jefferson College, and Ursinus College, all private liberal arts schools, relied on this tactic.

“In just trying to talk about how competitive and cutthroat this business is right now, this has brought it up to another level that I have never seen before,” said James A. Troha, the president of Juniata College in Huntingdon, Pa.

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