This page has been migrated from an earlier version of this site. Links and images may be broken.
Here’s why people who say that the unemployed should offer to work for less are wrong. It’s actually about tuition fees, but it’s a reminder that price can act as a signal of quality. What’s a little odd is that the price seems to be taken as a signal of quality even though the university itself did not change - that is, there is no guarantee that students who pay the full fees get what they are paying for.
John Strassburger, the president of Ursinus College, a small liberal arts institution here in the eastern Pennsylvania countryside, vividly remembers the day that the chairman of the board of trustees told him the college was losing applicants because of its tuition.
At Ursinus College officials determined that tuition was too low to draw enough students. So they raised it, and applications surged.
It was too low.
So early in 2000 the board voted to raise tuition and fees 17.6 percent, to $23,460 (and to include a laptop for every incoming student to help soften the blow). Then it waited to see what would happen.
Ursinus received nearly 200 more applications than the year before. Within four years the size of the freshman class had risen 35 percent, to 454 students. Applicants had apparently concluded that if the college cost more, it must be better.
“It’s bizarre and it’s embarrassing, but it’s probably true,” Dr. Strassburger said.
Ursinus also did something more: it raised student aid by nearly 20 percent, to just under $12.9 million, meaning that a majority of its students paid less than half price.
Ursinus is not unique. With the race for rankings and choice students shaping college pricing, the University of Notre Dame, Bryn Mawr College, Rice University, the University of Richmond and Hendrix College, in Conway, Ark., are just a few that have sharply increased tuition to match colleges they consider their rivals, while also providing more financial assistance.
The recognition that families associate price with quality, and that a tuition rise, accompanied by discounts, can lure more applicants and revenue, has helped produce an economy in academe something like that in the health care system, with prices rising faster than inflation but with many consumers paying less than full price…
More at the New York Times, below.
Link: In Tuition Game, Popularity Rises With Price - New York Times.