U.S. private colleges are moving away from the longstanding practice of setting high sticker prices and then discounting them with scholarships, instead offering tuition closer to what students actually pay in order to attract applicants. The shift comes as more students and parents, increasingly sensitive to costs, give up on applying before they even see their financial aid packages.
Carroll College in Montana will cut tuition by 40% starting in the fall of 2027, according to a recent report by The Wall Street Journal. Coe College in Iowa will lower tuition by about 45% beginning next year. Some private colleges are pricing themselves near the in-state tuition charged by public universities, or offering financial aid packages that require no student loans.
For years, U.S. colleges viewed high tuition as a signal of educational quality and institutional standing. The calculation was that keeping the listed price high while awarding scholarships would deliver benefits to students without lowering the school's nominal price.
That mood has changed. High tuition itself has begun to act as a barrier that drives students away from applying, rather than a signal of a school's caliber. Brett Schrader, a vice president at the education consulting firm EAB, said colleges are redrawing their pricing strategies to compete not only with rival schools but for the attention of families.
The change began largely at small private colleges. Some elite institutions are also reexamining their tuition structures. A Cornell University report on the future of higher education proposed setting up a task force to review whether to cut tuition and introduce merit-based scholarships.
Carroll College decided to lower annual tuition and fees to $26,800 after analyzing how students responded to various price points. President Jennifer Glowienka said the figure is close to what students would actually pay and competitive with public universities in other regions.
Coe College is lowering tuition to $31,850. President David Hayes said the previous price felt burdensome to students and discouraged them from applying at all. Not a single student at the college paid full tuition in the 2023-24 academic year, and average financial aid per student exceeded $40,000.
U.S. Cuts Tuition While Korea Pushes Full Scholarships at Regional National Universities
Korea is seeing changes of its own around university tuition. The Ministry of Education said in an August policy briefing that it would push to provide scholarships covering the full cost of tuition, through the national scholarship program and other channels, to incoming students at 30 regional national universities as early as the 2027 academic year. It is also reviewing whether to extend the support to students already enrolled.
The plan is tied to the situation facing regional universities, where competition for students has intensified as the school-age population shrinks. The government is also pushing to strengthen regional talent scholarships that support high-performing students at regional private universities, alongside expanded scholarship funding for regional national universities.
The circumstances facing Korean private universities, however, differ from the tuition cuts in the United States. Private universities have kept tuition frozen since 2009, and after the Type II national scholarship program was introduced in 2012, tuition cuts and freezes along with expanded in-house scholarships became linked to government funding. Data from the Korean Council for University Education points to analysis that the prolonged tuition freeze policy has worsened the financial condition of private universities.
The shrinking school-age population has added to the strain on regional private universities. Materials accompanying a bill on private university restructuring submitted to the National Assembly cited the deepening financial crisis at private universities, driven by the long-running tuition freeze and the declining school-age population, as grounds for the proposal. As of 2022 enrollment figures, private universities nationwide fell short of their admission quotas by 29,535 students.
