University Business November/December 2019 - 59

PROFESSIONAL OPINION

The case for price transparency
Clear, honest cost information can attract new students
and keep others from leaving
By Jason Reinoehl

H

igher education has a cost
transparency problem. Some
colleges do not comply with
federal rules requiring net-price calculators, while others provide misleading,
incomplete or dated information about
price, according to the "Questioning the Calculations" report from the
University of Pennsylvania. Across the
industry, financial aid offers are inconsistent, and are sometimes loaded with
jargon or missing the cost of attendance
altogether, according to New America
and uAspire's "Decoding the Cost of
College" report.
Colleges must do better. Shortcomings in the system harm students, especially first-generation or lower-income
students who are forced to drop out-or
who do not apply in the first place-
because of a lack of clarity on price,
hidden fees and unexpected tuition
increases.
But beyond the moral and ethical
reasons that institutions should be clear
about price, there is a practical argument: Colleges have nothing to lose by
being transparent.
Let me provide evidence. At the
University of Dayton in Ohio, we
overhauled the way we charge tuition
in 2013. We created a fixed net-price,
no-fees plan. This year, the first class to
enroll under the new model set a record
six-year graduation rate of 81.5% and
reduced student loan borrowing by
$10 million, compared with pre-plan

UBmag.me/transparency

UniversityBusiness.com

We have a responsibility
to provide complete
price information so
students can make an
informed decision.

graduates. In fact, student loan borrowing decreased for student groups
of every race and every socioeconomic
background.
Our tuition model has helped the
bottom line, too. Retention rates have
consistently been at 90%, and when
more of our students persist from year
to year, we can improve our tuition
revenue predictions and create stronger long-term financial plans. We've
achieved record enrollment over the past
several years, and we just welcomed one
of our largest, most diverse and most
talented classes this fall. As a result,
revenue has remained strong at a time
when many institutions across the Midwest have struggled.
I have to admit that we didn't know
how families would react to seeing the
four-year price tag upfront. The majority of schools make financial aid offers
based on the first year alone.
At the University of Dayton, each
student's personalized financial aid offer
spells out their net tuition for four years.
It includes a promise that scholarships
will rise to offset any tuition increases,
so what they pay each year stays the
same. It also projects housing, meals
and other personal expenses for each
year. We also offer a $4,000 four-year

book scholarship to students who visit
campus and complete the FAFSA, and
provide $3,000 in financial aid to study
abroad.
Yes, there are students who see the
full price and decide not to enroll. But
we believe we have a responsibility to
provide the price upfront so students
can make an informed decision.
While our approach to transparency
remains unique, there are encouraging
signs of a move toward transparency
across the industry. Ohio's legislature
now requires state schools to offer a
four-year tuition guarantee. The MyinTuition tool, developed by Wellesley College in Massachusetts, allows
students to get personalized net-price
estimates from more than 60 colleges
and universities-by answering just six
questions. Also, on a national scale, the
Department of Education issued an
advisory last April to standardize best
practices, including being clear about
the difference between loans, grants,
work-study and other ways to pay for
college in financial aid offers.
While not every college can offer a
four-year pricing model like the University of Dayton's, higher education as a
whole can and should do much better. If
every college used clear terminology and
easy-to-understand formatting in their
award letters and offered clear, easy-toaccess net-price calculators, we could be
a lot closer to solving the transparency
problem.

Jason Reinoehl is vice president for strategic
enrollment management at the University
of Dayton in Ohio.
November/December 2019 | 59


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University Business November/December 2019

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