Canisius College changes opaque pricing policy, slashes tuition to $27,000 - The Buffalo News

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Canisius College changes opaque pricing policy, slashes tuition to $27,000

The message wasn't getting through. State legislators kept pushing Canisius College President John J. Hurley on the high tuition rates set by private colleges and universities. Hurley, who was lobbying for more state funding of student financial aid, would point out that those high sticker prices didn't reflect the actual amount students and families paid at colleges like Canisius.

"And they would say, 'I know, but you've got this high tuition,' " Hurley recalled.

Like most colleges, Canisius relied on discounting its tuition sticker prices to enroll students, like a retailer selling men's and women's fashions on markdown. But Hurley realized there was no getting around it: The college's pricing strategy was opaque and confusing to most people.

Hurley announced on Tuesday a new strategy for the college that dramatically reduces tuition in 2018-19.

Canisius' current tuition of $34,966 will drop next fall by 23 percent to $27,000 – the same amount the college charged in 2008-09. The college also will cut its residence hall rates by $2,000 for students living on campus.

"Our research shows that we're perceived as expensive," Hurley said. "On top of that, there's extensive national research that shows that 55 percent of families don't even consider a private college because they assume it's too expensive.

"Canisius is in that position of being crossed off the list of many prospective students, before we even have a chance to demonstrate how we might make our education affordable and accessible," he said. "We decided we needed to do something about that."

Canisius for years set its tuition rates higher than any of the other 20 colleges and universities in Western New York. Unless they follow suit in cutting tuition, at least five other colleges and universities in the area will now charge more than Canisius.

College officials expect the change to help boost sagging enrollment at the college, where the size of the student body has dropped from 4,181 undergraduate and graduate students in 2014 to fewer than 3,500 this fall.  To account for the lost revenue from lower than projected tuition and fees, the college has been forced to make millions of dollars of cuts over the past several years.

Hurley said in September that 81 staff and administrative positions have been eliminated over the past decade, mainly through attrition. And this past summer, 34 faculty members accepted buyout offers.

Canisius joins more than 30 private colleges and universities across the country that have rolled back tuition rates over the past 20 years, and eight other colleges that last month announced they will do tuition resets next year, said Lucie Lapovsky, an economist who studies higher education finance.

Canisius closely studied a tuition reset by LaSalle University in Philadelphia announced in 2016 and put in place for this fall. LaSalle reduced its sticker price from $40,400 to $28,800 in an effort to reposition itself in a highly competitive higher education market. LaSalle had an enrollment bump of 20 percent this fall, Hurley said.

Although the sticker price at Canisius will be reduced by nearly $8,000, few, if any, current students will see that type of savings in their tuition bill next year, because nearly all Canisius students receive some sort of institutional discount. Those discounts will be adjusted to reflect the new tuition rate. But Hurley said that all current Canisius students will pay less than they would have paid if the college did not reset tuition.

The savings will vary by student, based on individual financial circumstances. The college will send letters to students and parents illustrating the effects of the price reset on their financial aid packages, he said. Current students also will benefit because any future price increases will be built on a lower base.

Lexi Maida, a freshman from Lancaster, wondered if the reduced tuition next year will allow her to take fewer student loans.

"I'm hoping my aid will stay the same," said Maida, who was studying Tuesday in a café on campus. The environmental sciences major commutes to Canisius to keep costs down, and she works at a submarine shop on weekends to help pay for books and other expenses.

"Their lowering it was really a good surprise. I wasn't expecting it actually," said Giovanna Aquilina, a freshman from Kenmore. "I think it's pretty exciting. It's really cool."

Aquilina isn't sure how much she will benefit. Her scholarships already cover most of her tuition costs, and she saves on room and board by living at home. But she said price is a main determining factor in where many colleges students enroll.

Aquilina passed over her dream school, Syracuse University, because it was too expensive.

"I was looking to save more money in my undergraduate school if I could, especially with my plans to go to graduate school," said Aquilina, who majors in biology and in psychology and wants to be a doctor.

Hurley had been mulling over the possibility of a price reset for several months. He acknowledged that the effect of the state's Excelsior Scholarship free tuition program on enrollment for this fall "sharpened" the college's focus on the matter. The college was 50 students short of its enrollment goal for the class of 2021.

For colleges that reset tuition, the results generally have been good. Lapovsky, a former president of Mercy College, studied eight colleges that reset tuition between 1995 and 2015 and found that freshman enrollment increases ranged from 1 to 50 percent at seven of the eight institutions. The enrollment increases translated into net total tuition revenue increases at five of the seven colleges.

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"You're appealing to a larger set of students," Lapovsky said.

Across the country, 70 percent of colleges and universities did not meet their enrollment targets this fall. List prices at private colleges and universities in particular have made a college education appear unattainable to a growing proportion of the population, because most college students and families don't understand the complexities of college pricing and discounting models, Lapovosky said.

A published price at a college might be $40,000, but "the truth is nobody is paying that much" because the average net price is $20,000, she said. "And there's enough people who are saying this is absurd," she said. "Price is supposed to have meaning and here it doesn't have any meaning."

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