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Making History: Private Iowa College Attempts To Change Higher Education Pricing Landscape

Making History: Private Iowa College Attempts To Change Higher Education Pricing Landscape

Venture into the middle of the Iowa prairie and you’ll find a private college that may swiftly shift the debate about the costs of college on a national scale.

Central College in Pella, Iowa, announced a $20,000 tuition cut that takes effect in fall 2020.

The liberal arts college, which serves approximately 1,100 undergraduates, is lowering tuition from $38,600 to $18,600 for the fall 2020 academic year.

The total 2020 published cost, with room and board —$10,280 — now totals $28,880. Last year, Central’s published price with tuition, room and board was $48,880.

'Tuition Price Is A Barrier'

The landmark drop brings clarity to a price-sensitive national market and attempts to eliminate the “sticker shock” that most prospective students and families encounter. In the past, the college offered copious amounts of financial aid and scholarships in order to mitigate the pinch that families feel and shore up its enrollment numbers.

But many families see the high “sticker” price and quickly look elsewhere, never even bothering to find out how much aid they might be able to obtain, or how much they might have to actually pay, said Ken Redd, the senior director of research and policy analysis at the National Association of College and University Business Officers.

“There is a lot of research out there that shows that, regardless of the financial aid, that the tuition price is a barrier,” Redd said.

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Central College President Mark Putnam said he's heard the same concerns from prospective students and parents.

“It simply appears to be more than they can handle financially, despite significant discounts,” said Putnam.

“We have made this change in order to change that conversation and present a clearer, more authentic price that is much closer to what it actually costs to educate a student.”

Liberal arts colleges nationwide have traditionally published high sticker prices: the average cost of tuition and fees for the 2018–2019 school year was $35,676 at private colleges, according to U.S. News.

Despite a higher published tuition among liberal arts colleges, students usually pay far less than the published price.

“We hope our decision will encourage other institutions to move away from an inflated price, offset by unfunded institutional aid. The situation we are facing nationally in high tuition prices is not sustainable,” Putnam said.

Reaching Parity With State Universities

It is something that more and more schools are at least considering.

In a 2017 survey by the National Association of College and University Business Officers, 15% of private colleges said they were exploring the idea of either cutting or freezing tuition.

Central College now finds itself on a level playing field: with scholarships, prospective students will pay close to or less than the public institutions in Iowa, and its cost is almost half the cost of other private colleges in the state.

For example, the cost to attend the University of Iowa for the 2019-2020 term is an estimated at $21,230 for Iowa residents: $9,830 in tuition and fees and $11,400 for housing and meals.


No current Central student will pay more in 2020-2021 than they currently do in 2019-2020, according to the college’s website.

A “tuition reset,” as it’s known in higher ed circles, can be a marketing tool that can boost enrollment, which could eventually bring in more money for the college.

That boost in applicants was what occurred when Muskingum College in Ohio cut its tuition by nearly one-third back in 1995, one of the first instances of a big tuition reset.

“They’re hoping a cut in the tuition price will lead to greater applications and in the end lead to greater actual tuition revenue, because they’re able to discount less,” said NACUBO’s Redd. “That will … hopefully lead to higher net tuition revenue.”

Other colleges and universities have attempted to enact price resets, with mixed success.

Dave Royse contributed to this report.

Photo by Central College Alumni via Wikimedia


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