OnDemand WTP Pricing Research

Private colleges are trying to attract students by matching public prices

This fall, the trendy pricing strategy for private universities might just be matching public universities’ tuition.

Two private universities unveiled price-matching programs over a span of five days at the end of August. First, Oglethorpe University in Atlanta announced a program under which it will match tuition sticker prices at a list of flagship universities in every state for high-achieving first-year students enrolling from those states next fall. Then Robert Morris University outside Pittsburgh said it would undercut students’ average cost of attendance at Pennsylvania’s two flagship universities by $3,000 next fall for high-scoring freshmen who had been admitted to the public institutions’ main campuses.

A pair of pricing programs does not a trend make. But the fall semester, when college and universities often announce pricing actions that will take effect for next year’s freshman class, is still young.

Even if no other colleges or universities announce a flagship matching program this year, it’s a good time to take a hard look at the idea. The recently announced programs fit into a landscape in which colleges and universities seek punchy new ways to market to students who are worried about the price of college — but who aren’t necessarily familiar with the complex world of scholarships, unfunded aid, sticker prices and net prices in which the cost of actually attending a private college is often much lower than the prices quoted on its website.

Existing examples also indicate that price-matching efforts can attract incrementally more students while limiting the likelihood key enrollment metrics will spin out of control. A tuition-matching program has been in place at the University of Maine in Orono for several years, under which that public university offers academically qualified students who come from several other states the chance to pay the tuition and fee rates published for public flagships in their home states. Since 2008, California Lutheran University has matched the average cost of attendance at certain University of California institutions — currently matching the average cost of attending six universities in that public system for students who were admitted to one of them.

The tuition-matching efforts represent a way for private universities to compete on price without the high-risk, potentially high-reward model of resetting tuition. Last year, a group of institutions concerned that lofty sticker prices were turning off students announced tuition resets. They slashed their tuition rates for students starting this year, cut tuition discounts by similar amounts and used the ensuing attention to try to convince more students to enroll.

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Private colleges are trying to attract students by matching public prices.