University Business May 2018 - 50

PROFESSIONAL OPINION

surveyed by NACUBO warn that
these discounts aren't sustainable, at
least not for long.
A perfect storm
Higher education is battling a perfect
storm of market pressures. What's the
appropriate battle plan? If adversity
fuels innovation, now is the time for
concerted action.
As leaders of private colleges and
universities, it is our job to guide our
institutions into the future, not to
live in the shadow of an opaque pricing strategy. Today's high-tuition,
high-discount model is failing us,
and it's failing families.
A "tuition reset," as it's called, is
a move in a promising direction-if
only we could talk to each other.
The National Association of Independent Colleges and Universities is
petitioning Congress to ease federal
antitrust laws that prohibit private
colleges from even discussing tuition
prices and student aid.
The current law, dating back
decades, aims to prevent collusion
across industry sectors to set prices
high. In the unusual case of higher
education, our goal runs in the reverse direction. We want to keep
prices down.
NAICU proposal calls for a fiveyear relaxation of antitrust restrictions for the purpose of discussing
affordability and efficiency.
At a time when many are promoting free public education, NAICU
contends Congress should not prohibit private colleges from discussing
their own pricing and financial aid
practices. Public colleges are exempt
from antitrust rules.
I'd like to give the NAICU proposal a fighting chance.
A free, open and "regulated" discussion among peer institutions could
be just what's needed to rightsize a
50 | May 2018

pricing model currently causing more
harm than good.

Schools have a vested
interest in exploring
ways to link tuition to
the real cost of college,
rein in sticker prices and
distribute a portion of the
savings to financial aid.
Schools have a vested interest in exploring ways to link tuition to the real
cost of college, to rein in sticker prices,
and to distribute a portion of the savings
to financial aid.
Percolating proposal
On the surface, a tuition-reset strategy
seems imminently sensible, even obvious. If few students are paying full
price, why not bring the sticker price
down to the amount the typical student pays?
Part of the problem is managing
perceptions. When a college reduces
its tuition, it risks signaling to students
and their families the school might be
financial jeopardy-or is worth less as
an educational investment.
As Richard Detweiler, president of
the Great Lakes College Association,
put it, "If everyone got into the boat at
the same time, then they could drop
their tuition."
Speaking to The Washington Post,
Detweiler went on to say that, from a
consumer and public policy point of
view, the collaboration ought to benefit
everyone.
Thus far, the NAICU proposal is
quietly percolating among lobbyists
and congressional committees. However, one obstacle is that exempting any
sector from antitrust law, even temporarily, is certain to incite controversy.

Years ago, as many as 150 schools
belonging to 24 groups convened to
compare notes about financial aid and
tuition costs, according to the Institute for College Access and Success.
Then, in 1991, the Justice Department brought charges of price fixing against the most prominent of
them, the Ivy Overlap Group, which
included MIT and eight Ivy League
institutions-Brown, Columbia, Cornell, Dartmouth College, Harvard,
Princeton, Yale and the University of
Pennsylvania.
The government charged the defendant schools with violating the
Sherman Antitrust Act "by illegally
conspiring to restrain price competition on financial aid" to prospective
undergraduate students.
The group quickly settled, and the
practice of comparing notes officially
ceased. The subject is still so touchy
that many higher ed organizations
don't even want to broach it.
We could head off controversy
by designing a collaborative process
that runs on transparency and adherence to a clear goal: a revised pricing
system that benefits students and
institutions alike.
Widespread reform won't happen
unless we commit to studying the
issues in-depth and from multiple
perspectives, ideally learning from the
handful of schools that have pioneered
tuition resets on their own.
The cost of college is a national
preoccupation. Many private colleges
and universities find themselves in a
darkening market position, with no
easy way out.
To move toward a brighter future,
educators should be given the opportunity to collaborate-and not collude-
on solutions.
Wendy B. Libby is president of Stetson
University.
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