In an unprecedented decision, University of the South announced Wednesday that it would lower its total costs — tuition, fees, and room and board — by 10 percent. The move would amount to giving each student $4,600 in aid in an attempt to make the University, better known as Sewanee for the town in Tennessee in which it resides, more accessible and affordable in a tough economic climate.
Vice Chancellor and President John M. McCardell Jr. announced the change Wednesday. While most universities increase their costs each year, Sewanee, he said, would take the lead, “and once again begin to make a quality liberal arts education more, not less, accessible to the ablest students we can attract.”
“The conventional wisdom used to be once a family decided to look at a certain group of school they had already made up their mind about price,” said Laurie Saxton, interim executive director of marketing and communications for Sewanee. What we have seen … is that that economic model has changed, and that families are considering price more than they used to.”
“We sincerely want to make it more accessible to families,” she explained, adding that she expected that doing so would also have benefits for the university. “Because of that, we hope that more good students will take a look at us.”
Last year, Sewanee had a yield of 23.2 percent, meaning that 23.2 percent of the students accepted chose to attend. Though the school does do not know the reasons why students chose not to attend, according to Saxton, “we have, in recent years, lost more students to public universities than we used to, which would indicate that [price] is at least part of the equation that families are looking at.”
“We hope, this year, families will say, ‘OK, Sewanee is more affordable,’” said Lee Ann Afton, dean of admissions and financial aid.
McCardell decried what he called “bidding wars” once students were admitted, in which schools compete for students by offering them varying amounts of financial aid to attend. By lowering tuition upfront, Sewanee hopes to take the lead on stopping this.
William J. Tierney, Wilbur Kieffer professor of higher education and director of the Center for Higher Education Policy Analysis at University of Southern California, called the move “a great idea.”
“College tuition is such a confusing issue,” he said “It’s kind of like buying a car: You never pay the sticker price unless you don’t worry about money. And everybody worries at money.”
The reduction in fees will not affect the school’s financial aid policy, said Afton.
“The last couple years, we’ve met between 94 and 95 percent of student need, on average,” she said. “We anticipate that we’ll continue meeting that amount of need. In the long run we hope to close that gap, but we’re not going to be able to do that in the next year or two.”
With the decrease in fees, “we hope many will need less financial aid,” Afton added. Moreover, “that also means if we’re meeting 95 percent, that gap should be less because we cost less.”
Tierney’s one hesitation about the decision is how Sewanee will compensate for the lost revenue from tuition, a difficulty McCardell acknowledged in his statement.
“This is not a risk-free decision,” he said. The “short-term risks … are significant, and will require us to compensate for the lost tuition revenue by a combination of gifts, grants, endowment spending, and budget discipline.”
According to Saxton, the school is “strong enough financially to be able to take that risk.”
“We are confident it will work,” she said, asked what might happen if the loss of revenue proved to be a serious problem. “We expect the lower tuition price to be that way for a long time to come.”
Saxton said the move “was a culmination of looking at trends over the last few years in the economy and in the university. There’s been discussion at meetings of college administrators over the last year or so saying somebody needs to do something.” Sewanee decided to step up and say, “we’ll go first.”
“We are taking a leap of faith and believing that this is the right thing to do for the University of the South,” she said.
Tierney suggested that other institutions might consider following suit.
“At the absolute best institutions – thought of as the best … I don’t see that happening,” he said. “But at institutions that are one step down from that, they are taking a hard look at that.”