A multiple case study analysis exploring how less selective, tuition-dependent colleges and universities approached an undergraduate tuition price reset strategy

Abstract

This comparative case study provides a qualitative exploration of how four private tuition-dependent colleges approached a tuition price reset, including the organizational context, approaches, and strategies involved. As evidenced by the literature reviewed, there is an increasing awareness that the traditional business model of “high tuition/high aid” is no longer viable for less selective, tuition dependent colleges and universities caught in the middle of the market. Some of these colleges and universities are trying to innovate to remain competitive and financially sustainable. One innovation is to drastically reduce undergraduate tuition sticker price; a trend referred to as tuition price resets. A tuition price reset is a strategy that shifts the pricing model for an institution from “high tuition/high aid” to “low tuition/low aid” by lowering published tuition and financial aid awards, often in similar, but not necessarily equal proportion. There are a number of tuition dependent colleges that either have or will consider resetting tuition. This study provides valuable insight for those individuals and institutions seeking to understand the process that colleges and universities go through in evaluating the tuition price reset strategy. Critical factors in each institution’s motivations, challenges and lessons learned are explored, including the background behind the analysis and decision, planning and implementation, as well as the outcomes of the decision.