Here is a guest post from Stephen MacDonald, president of Lebanon Valley College. He writes about the recent trend toward colleges offering deep tuition discounts; the industry-wide “discount rate” stands at an all-time high, meaning that the typical student can expect to pay less than two-thirds of the published “sticker price” at a private institution.
You may have noticed that some colleges seem to be marketing their cost of attendance in a variety of new ways. Seton Hall University in New Jersey recently announced it was slashing prices by two-thirds for top students only. Now, Seton Hall isn’t the first and it won’t be the last institution to do this. Lebanon Valley College, the institution that I lead, has done this for years.
The only difference is that we disclose a student’s merit aid up front. Why? The late John Synodinos, former president at Lebanon Valley, believed that parents should know at the time of their child’s acceptance how much their education was going to cost them. “You wouldn’t buy a winter overcoat this way,” John said. “You wouldn’t buy a coat in December and wait until March to find out how much it is going to cost you. You shouldn’t have to buy a college education that way, either.”
This policy takes the mystery out of the financial aid process, making it easy to understand for students and their family. This simple plan is one that rewards students for their good work. It’s a plan LVC still uses 20 years later.
Students in the top 10 percent of their high school class earn a half-tuition scholarship. Our tuition, our “sticker price,” this year is $32,490. So students in the top tenth of their high school class get a scholarship worth half of that: $16,245. Those in the top 20 percent of their high school class earn a scholarship that is worth one-third of tuition. That amounts to a grant of $10,830. And students in the top third of their high school class get 25 percent off tuition, or an automatic grant worth $8,122.50. This is before any additional financial aid is awarded and also deducted from tuition. In fact, 95 percent of our full-time undergraduates receive some form of financial assistance from LVC.
Demystifying the financial aid process has not hurt this college. On the contrary, students and parents like it very much because it makes transparent a system that, at most places, is opaque and inscrutable. Moreover, at Lebanon Valley College, students understand that their financial aid is something that they earned themselves through their own academic effort, not a gift dispensed or withheld from on high because of the vagaries of economic circumstance. The popularity of our scholarship program is apparent when we note that since its introduction in 1991, our enrollment has more than doubled from fewer than 800 full-time students to more than 1,625 today.
In this economy, the true scale of a particular college’s comprehensive cost is a major factor in a family’s choice of the school their child will attend. Students and families need to know from the outset how much a college education is going to cost. Colleges that find ways to make a college education affordable while rewarding student academic achievement at the same time are addressing a critical public need. More colleges should find creative ways to satisfy this need.