Instead of paying Maine’s out-of-state price of $28,880, a student from New Hampshire, for instance, would pay the in-state University of New Hampshire rate of $16,986. That amounts to a savings of $11,894 based on 2015-2016 prices. A Vermont student attending Maine would save $15,514, while one from New Jersey would see a $14,749 discount. Only incoming students are eligible for the program.
What makes Maine’s move so striking is that many public universities go after out-of-state students for the extra revenue. The discount program speaks to the pressure universities are facing as the pipeline of students heading to college is drying up, threatening enrollment and revenue.
Public and private colleges nationwide anticipate revenue growth returning to the historic rate of inflation, after years of tuition rising faster than that rate, according to Moody’s Investors Service. For fiscal 2016, net tuition revenue — the money earned from students after schools provide financial aid — is expected to grow about 2 percent to 3 percent.
About 40 percent of universities estimate lower total enrollment this fall compared to five years ago. The pain is especially acute in the Midwest and Northeast, where population growth is weak or below average. The number of high school students in the Northeast is expected to contract by more than 5 percent over the next eight years.
“The demographics of Maine are changing such that the number of students graduating from high school is declining each year,” said Jeffrey E. Hecker, provost at the University of Maine. “Maine has the oldest median age of any state, and needs an influx of educated young people into its workforce.”
He said the university noticed that a quarter of the students it accepted wound up attending flagship schools in neighboring states, which made the match strategy a no-brainer. With the greatest financial award afforded to kids excelling at school, the program could ultimately bolster the university in the rankings.
About 29 percent of students at the University of Maine are from other states. One in five of those students stay in Maine for their first job, Hecker said. Ultimately, the school would like to grow out-of-state enrollment to over 40 percent.
All of the university’s efforts are not just aimed at attracting students from other states. To keep local high school students in Maine for college, the university also is offering to match the net tuition offer they receive from flagship schools in neighboring states.
“We don’t want Maine students choosing to attend other state flagship universities because it is less expensive,” Hecker said.
Offering in-state prices to some out-of-state students might improve enrollment, but at a cost, said Barmak Nassirian, director of federal relations and policy analysis for the American Association of State Colleges and Universities.
“The economics of such an offer tend not to be sustainable, since you can’t lose money on every deal and make it up on volume,” he said.
Still, Nassirian said enrolling high-achieving students, even at a discount, could give a school a bump in the rankings and subsequently help it recruit students who pay more money.
Although Maine is in the vanguard with its matching initiative, many states have tuition reciprocity programs that lower the cost of attending public universities out of state. Those programs put the onus on states, rather than institutions, to absorb the price differential.
Students in Maryland and Virginia can receive in-state tuition in Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina, Tennessee, Texas and West Virginia, through the Southern Regional Education Board’s Academic Common Market. But the discount is applicable only if the degree program is not available in the student’s home state.
The Midwest Student Exchange Program, meanwhile, allows residents of Illinois, Indiana, Kansas, Michigan, Missouri, Nebraska, North Dakota and Wisconsin attend more than 100 schools in the region at no more than 150 percent of in-state tuition for specific programs.
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