U.S. Markets open in 8 hrs 57 mins

Colleges Cut, Freeze Tuition for Fall 2013

Katy Hopkins

Fall 2013 is still a year away, but some colleges have already announced tuition cuts and freezes for next year's students.

"The simple trend line is that both phenomena are increasing," says David Warren, president of the National Association of Independent Colleges and Universities (NAICU). "Colleges are ... actively looking at the question of cutting tuition and then locking it in over some period of time."

One of the earliest announcements came from Concordia University--St. Paul, a private institution in Minnesota, with a guarantee to cut tuition by 33 percent for all incoming and current college students next fall. The tuition cut--from $29,700 to $19,700--will come at the expense of financial aid awards, says Concordia University president Tom Ries, including smaller athletic scholarships and decreases in merit aid.

[See the schools where the most students receive merit aid.]

But every current student will ultimately pay at least a bit less, Ries maintains. One such student is Jenna Gehl, currently a senior who will be returning next fall for a final semester, and who will save about $2,000 doing so, she says.

"I didn't realize that any college, especially a private college, could make this change," she says.

The decision marks a move away from the high-tuition, high-discount model, Ries says, a concept some prospective families may not have grasped in the past. Though many students at Concordia received financial aid, some prospective families were likely shying away from the $29,700 per year price tag before receiving their financial aid award packages, Ries says.

So far this fall, prospective families "like the fact that they can see better what the costs are actually going to be, and it makes it feasible for them to consider a private education," Ries says. "In many cases, they just didn't look before."

[Use net price calculators to estimate your total cost of college.]

The ability to forecast the total cost of a college degree can also help families to choose among colleges. Costs at many schools rise each year, but a few institutions have already pledged to lock tuition for future students.

The University of Evansville in Indiana, for instance, will freeze its current tuition of $29,740, which students starting at the private college next fall will pay for four years. The University of Phoenix, a for-profit institution, also recently announced a tuition lock for students who enroll before June 30, 2013, and remain continuously enrolled with the institution until they complete their degree, says spokesman Ryan Rauzon.

"I think aside from what higher education students are looking for in terms of taking their degree to compete in the job market and command more earning power, the most important issue in higher ed is stable costs so that students can forecast exactly how much their degree is going to cost," Rauzon says. "It gives them that final boost of confidence-'Let's do this; I can plan accordingly.'"

[Find out how to pay for college.]

Other universities are taking slightly different approaches to tuition freezes. In Ohio, private college Urbana University has pledged, for the second year in a row, to hold steady its current tuition rate of $21,566 for 2013-2014 (though there's no guarantee it won't rise after next year). And while it's not a change that will immediately affect incoming students, Indiana University--Bloomington, a public institution, has announced it will "effectively freeze tuition" for juniors and seniors who, after their sophomore years, are on track to finish their degrees in four years.

"We have clearly heard the message from our students and their families that cost matters to them when it comes to pursuing a college degree, but any efforts to keep an IU education affordable also must include efforts to improve on-time graduation rates, which also effectively lowers the cost of earning a degree," University President Michael McRobbie said in a school press release about the initiative, which will debut as a pilot program in fall 2013.

More schools could make tuition announcements in the coming months. Warren of the NAICU notes that many colleges don't make financial aid policy decisions until January or February--so stay tuned.