Article Summary
- By next year, an estimated two-thirds of all jobs will require some form of postsecondary education.|Questions about cost, price and student aid vary across institutions, making affordability a difficult issue to understand completely.|The University of Dayton has been using fixed net-price tuition plan—promising most students a fixed rate across their four-year college journey, as a possible solution.
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Affordability is a topic on the forefront of everyone’s mind across higher education . For students, parents and institutions, the high rising costs of education is a serious and growing issue. Still, affordability is only half the battle. College is meant to prepare students for life outside the classroom—be it through better career options, graduate-level studies or mastery of a specific trade.
By 2027, 70% of jobs will require education or training beyond high school. Yet, the average student debt burden has more than doubled between 1992 and 2012. With the importance of a college education growing alongside rising costs, we’re left with a pressing question—what are students getting for their money?
This question is prompting colleges and universities to look for new, sustainable solutions that lower costs and make education more affordable. As part of this commitment, many institutions are turning to affordable learning products and course materials as a way to lower costs. Unfortunately, affordable products alone are not enough. To provide the level of education students need to succeed, affordability needs to align with value.
The Challenge Behind Affordability in Higher Education
The affordability of higher education can be a difficult issue to understand. Questions about cost, price and student aid vary across institutions. At the same time, students and parents both face their own unique hurdles when it comes to paying for college. To this end, institutions and instructors are under increasing pressure to provide more affordable learning without compromising quality—attempting to curb costs without sacrificing optimal learning outcomes.
So how is the higher education space fairing in this endeavor and what, if anything, have we learned so far? Let’s take a look at one school’s recent approach to driving affordability and strong outcomes using fixed net-price tuition plans.
Net Pricing and Stability the Key to Affordable Education?
In 2013, the University of Dayton implemented its first fixed net-price tuition plan—promising most students a fixed rate across their four-year college journey, regardless of increased sticker prices. With this class now graduated, we can look back at the effect this strategy had on affordable learning and the institution.
The Results
Upon graduation, figures from the University of Dayton class of 2017—the first to enroll in the program—showed impressive results. The graduation rate increased by 8%, while reducing collective student loan debt by nearly $6 million compared to the previous year.
How the Plan Worked
Dayton used financial aid to combat the rising costs of education. Promising full-time students financial aid that grows alongside the cost of their tuition, the idea behind the plan was to ensure net prices students’ first semesters would equal that of their last semester. Dayton eliminated all additional fees, mapping out exactly what families should expect to pay—including add-on costs like housing and meals.
The Downside
While the university eliminated fees with its fixed net-price plan, it caused a notable spike in tuition for students outside the program. However, Dayton officials claim that while the costs increased year over year, the price was easier for students and families to understand and manage—thanks to clearer expectations and reduced billing complexity. Moreover, students who paid the full weight of their education did not receive a net-price guarantee.
Research indicates even top students are at risk of dropping out of college after losing financial aid. While those who receive increasing aid are more likely to complete a degree—the argument for a fixed rate model is capturing the attention of higher ed board members. In fact, Kathy Dawley, principal at Hardwick Day, the financial aid consulting division of EAB Research, had this to say:
“There is not a single client institution at the board level that is not asking questions about these kinds of experimental programs.”
Want More Stories from Institutions Tackling the Affordability Problem?
Check out our ebook, Affordability in Higher Education. This collection of articles and case studies—created in partnership with Inside Higher Ed—explores the issues behind affordable education and how they impact costs to students and families.