It’s Almost Like There’s A Bubble Or Something: Minnesota College Slashes Tuition 33%

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Concordia University in St. Paul is reacting to declining enrollment numbers by slashing tuition prices, and it’s not a modest discount either. The institution has cut the price of attending by 33%:

ST. PAUL — After slashing its annual tuition by $10,000, Concordia University in St. Paul is now preparing for one of its largest entering classes in decades.

The college rolled back its undergraduate tuition this fall from $29,700 to $19,700. The result is a 65 percent jump in the number of new students, both freshmen and transfers.

“I was pretty excited,” said Margot Cowing, of Springdale, Ark., whose son is an incoming freshman. “Most places are raising tuition — nobody’s cutting.”

School officials announced the tuition drop last year after realizing the sticker price might be scaring away potential students. The college was already subsidizing more than 40 percent of tuition costs with grants and scholarships, so executives decided to just lower tuition outright.

“People don’t even look at you if you’re over a certain price point,” said Eric LaMott, the school’s senior vice president.

It will be interesting to see what the long-term impact of this will be, but there a couple of immediate take-aways:

First, this illustrates just how hugely inflated the cost of higher education has become. An institution that can slash 33% out of tuition (with most of that cost coming out government grants and scholarships, etc.) was raking in a big profit margin. Many higher education critics, including this one, have long argued that these institutions have been jacking up tuition to take advantage of increasingly generous tuition subsidies and taxpayer-backed loans from the government. This example (and there are others) proves just how true that is.

Second, this also indicates just how important prices signals are. Were it not for the government’s efforts to promote higher education, institutions like Concordia likely would have hit this upper limit where the cost of tuition produces lower enrollment numbers long ago. Put another way, we wouldn’t have a problem with skyrocketing higher education costs if it weren’t for government meddling in the higher education markets.

As is usually the case, we’d be better off if the government had done less not more.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • ec99

    Ashland University, a private school in Ohio, has lowered its tuition 37% for this academic year. But these are both private schools. State-affiliated universities continue to increase their tuition, despite increased appropriations. One wonders where the money goes.

    • kevindf

      It goes into the giant pockets of educrats and tenured pointy heads.

      • ec99

        Uh, don’t forget the coaches.

    • http://sayanythingblog.com Rob

      Collegiate sports. Private airplanes for university administrators. Presidents mansions. Hoardes of new administrators for things like “diversity” and other such nonsense.

  • MrSkeptic

    You got it right until you made this point:

    “Were it not for the government’s efforts to promote higher education, institutions like Concordia likely would have hit this upper limit where the cost of tuition produces lower enrollment numbers long ago. Put another way, we wouldn’t have a problem with skyrocketing higher education costs if it weren’t for government meddling in the higher education markets.

    As is usually the case, we’d be better off if the government had done less not more.”

    Actually, higher education cost less when the government is more involved. When governments apply cost controls on higher education institutions they keep the price low for the individual and state. Just look at the tuition and costs of higher education in every other developed nation. They have accessibility and low costs. In the US, we have accessibility, but high cost. Why? Because institutions are competing for student tuition dollars. How do they gain more students? By becoming more prestigious. How do they become more prestigious? By building lavish infrastructure. By recruiting star researchers. By building popular sports teams. All of this costs money and there is no end to it.

    Your idea of less government may, in theory, reduce cost, but it would destroy accessibility for everyone other than the privileged and rich. It would take us back to a time before the GI Bill was introduced. This the problem with conservative thinking in general. It is short-sighted and regressive.

    • ec99

      You really can’t compare higher ed in the US with that of other countries. In the case of the former, access, due to lower admission standards, has opened participation to many who may have no business in college. Other countries determine by age 12 whether kids will go to college or follow a vocational program. At any rate, a much lower percentage of people attend college throughout the world. Further, they generally start right into their major, breadth courses offered here have already been take at the equivalent of the high school level.

    • http://sayanythingblog.com Rob

      Actually, higher education cost less when the government is more involved. When governments apply cost controls on higher education institutions they keep the price low for the individual and state.

      It’s amazing to me how often you folks on the left think the government can wave a magic wand and just mandate lower prices.

      What you’re describing is essentially Obamacare for higher education (something the President himself proposed on a tour of college campuses) and look at how great that health care policy has been at bending the cost curve.

      Government policy in America has exploded tuition costs by raising the cost “pain threshold.” When government loan policy, and other tuition subsidies, expanding the ability of students to pay, colleges have reacted by raising costs.

      It’s been a vicious cycle, though perhaps we’re soon coming to its end.

    • JustRuss

      How many of those people who DID go to college, are in a career where it is worth anything at all? How many of those people who got to go to college because of government involvement, now have loans they will still be paying back when their own children are college age?

  • awfulorv

    I fail to see what is so damn precious about the name that two colleges, in the same state, need to be named Concordia?

  • Waski_the_Squirrel

    It is a private school. It is responding to market pressure.

    That said, $29,000 in tuition would eat up most of my income. I couldn’t pay for a child to go there. Even $19,000 is still an enormous chunk of my income, but I can at least imagine saving for that over the life of a child.

    I attended a private college, and one of its marketing ploys was to keep costs low. That, along with academic quality and a Christian mission, ensured that the college turned away a lot of good applicants.

  • fredlave

    As long as the government makes student loan money available, tuition will keep going up. This is an unspoken agreement between universities and Democrats: The Dems provide the money and the Universities keep turning out shiny (but indebted) new liberal voters. And, when the bubble bursts, the Dems will bail out the students and, by extension, the Universities at the taxpayers’ expense.

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