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Assessing Your Institution's Pricing Strategy

As administrators contemplate their institutions’ long-term financial health, some admins are re-evaluating their pricing strategies.

It’s no secret that dwindling enrollment numbers, debt aversion, and an increasingly competitive recruitment landscape pose serious challenges to colleges. As administrators contemplate their institutions’ long-term financial health in the face of these trends, some admins are re-evaluating their pricing strategies. 

Though every college has unique priorities and constraints to balance when determining tuition prices, you’ll find some of the common considerations schools take laid out below.



It isn’t always easy for students to discern how much college will actually cost before they get a bill. To help give students an accurate picture of how much they’ll pay, individual colleges within a university may make concerted efforts to communicate program-specific fees, such as those for art and lab supplies. 

Some schools, such as Purdue University, have instituted tuition freezes, so that students won’t see their tuition increase from year to year. 

Colleges that prioritize transparency in their pricing strategies help prospective students make more informed choices about which school to attend, and reduce the likelihood of students running out of funding partway through their education.


Retention & Graduation

Cost is a common retention inhibitor, and thoughtful pricing strategies can help. This is especially true for students who take more than four years to graduate. According to the NCES, only 41% of college students in four-year programs actually earn a bachelor’s degree within four years, and only 59% graduate in six.

Taking more than four years to graduate increases both the overall cost of a degree and the likelihood that a student will stop out or drop out. Colleges can encourage retention and on-time graduation by creating models like 15 to Finish, which introduce positive incentives for students who take fifteen credits each semester, and potentially by updating their aid packaging models to include outcomes protections.



It’s a fact that certain programs have higher operational costs than others. For some schools, charging students different amounts depending on their course of study may be a helpful way to offset the cost of more expensive programs. Differentiation may also enable institutions to lower costs for programs that need a boost in enrollment without jeopardizing their overall tuition revenue stream. As long as schools communicate prices to students ahead of time, tuition differentiation can help colleges afford the resources they need to facilitate higher-cost programs.


Financial Aid Packaging

For schools that can afford to maintain or increase their tuition discount rates, additional scholarships can help schools meet enrollment goals and provide students with often-necessary financial assistance. For those schools whose increasing discount rates threaten their financial health—and as a consequence, the value of their graduates’ degrees—hiking discounts isn’t an option. Institutions in the latter category may consider implementing payment plans with dedicated servicers or tuition insurance programs that can give students peace of mind.


Ultimately, it’s up to individual schools to determine their priorities and work within the constraints of their pricing strategies. But an active turn toward pricing transparency, retention and completion initiatives, differentiation (depending on the school), and innovative financial aid packaging can help colleges sharpen their approach. In a changing admissions landscape, a deliberate, well-considered pricing strategy can make institutions more adaptable and resilient.

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