Tuition Reset

Concordia’s vision is to provide outstanding value by offering an education of high academic quality that is reasonably priced so that our students can achieve personal and career success. We recognize that the growing reliance on student loans nationwide can lead to accumulated debt that impedes many graduates’ efforts to build financial security for themselves. Concordia heard the demands of students and their families to take real action on college affordability.

Concordia itself was in a position of strength when we moved ahead with the tuition reset in 2013-14, with record enrollment numbers and higher academic profiles in the years leading up to our tuition announcement. But the economic recession had eroded the financial situations of many students and families we serve. As a result, Concordia for several years increased the institutional scholarship and grant aid awards along a trajectory that was simply not sustainable. So we decided to respond with a relevant and real solution.

Concordia has a culture of fiscal prudence and a strong history of effective strategic planning, conservative forecasting of revenue growth, and careful attention to expense management. We have a diversified revenue stream, thanks in part to our cohort adult degree-completion and graduate programs, and have disciplined ourselves over the past decade to operate with low overhead and to rely on the core operating revenues of tuition and auxiliary services. Concordia spent three years intentionally planning for and creating the specific conditions that would allow us to reset our tuition.

The decrease in tuition was accompanied by a decrease in our discount (institutional aid), but our move from a high-tuition/high-discount model to a low-tuition/low-discount model lowered our students’ net cost when compared to the annual 4-percent increase they would have otherwise experienced. It also brought our traditional undergraduate program into greater alignment with our cohort and graduate programs, which from their inception have operated with a low-tuition/low-discount model.

The tuition reset was revenue neutral for Concordia given projected enrollment levels. The short-term cost to the university of including returning students in the tuition reset was absorbed by Concordia through operations, donations to the annual fund and endowment.

Every new and returning student saw a reduction in their total out-of-pocket tuition costs. In fact, when we calculated the out-of-pocket savings for all full-time students in 2013-14, we found an average savings of $2,542 compared to if we hadn’t reset tuition. (Out-of-pocket costs are the price of tuition minus any grants or scholarships received.) For students who qualify for need-based financial aid, Federal Pell and Minnesota State grants stretched to cover a greater portion of their tuition expense. And the amount of loans needed to pay for out-of-pocket costs was therefore reduced, as well. Those are real savings, especially when calculated over four years.

With our tuition price rolled back to what it was a decade ago, Concordia is one of the most affordable private universities in Minnesota and the Concordia University System. The average net cost for our students is comparable to many of the region’s public universities. In resetting tuition, nothing was cut or eliminated from the Concordia educational experience in or out of the classroom. So retaining the high quality of education while reducing tuition costs has made a Concordia degree even more valuable.

Enrollment at Concordia climbed to an all-time high following news of our tuition reset, indicating that the market of higher ed is, in fact, looking for transparency in pricing and moves toward affordability. Concordia’s spring 2014 enrollment reached 3,652, up from 3,015 the previous year. Retention rates have also climbed.

“Given the socio-economic background of many of our students, these numbers (retention rates) are refreshing and help us measure our progress on our goal to increase retention and persistence to graduation,” said Concordia President Tom Ries.

Featured Article on Concordia’s Tuition Reset

Minnesota Public Radio’s All Things Considered: Concordia University cuts annual tution by $10K

Coverage of Concordia’s Tuition Reset:

• Star Tribune: $10,000 tuition cut pays off for St. Paul’s Concordia University
• Inside HigherEd: Paper (Tuition) Cuts
• The Chronicle of Higher Education: Enrollment Woes Push Small Colleges to Be Strategic (subscription only)
• KARE11: Concordia Univeristy cuts tuition, sees enrollment jump
• CBS MoneyWatch: This college is slashing its tuition by 43 percent
• Minnesota Daily: Concordia goes against the grain
• Cleveland Plain Dealer: Ashland University will reduce tuition $10,000 next year
• WDIO TV: After Concordia Lowers Tuition, Enrollment Soars 
• PostBulletin.com: Concordia University lowers tuition; enrollment soars
• Columbus Dispatch: Ashland University slashes 2014 tuition by $10,000
• Star Tribune: On campus beat: Colleges downplay sticker prices
• Spartanburg Herald Journal:Converse College to reduce tuition by 43 percent

Coverage of Concordia’s Tuition Reset from 2012:

• Chronicle of Higher Education: Concordia U. Saint Paul will slash tuition by one-third
• CBS MoneyWatch: University slashes tuition by 33%
• The College Solution Blog: A Trailblazer Slashes College Tuition by 33%
• Minnesota Public Radio – All Things Considered: Concordia University cuts annual tuition $10K
• The Lawlor Focus: Ceilings and Doors in Higher Education Pricing
• Lawlor Group Blog: Guest Post: Dan Lundquist on Concordia’s Tuition Reset
• Minnesota Public Radio News: Concordia University St. Paul cutting tuition $10,000
• Kare11: U of M promises tuition freeze if it gets funding increase
• InsideTrack.com: Concordia University responds to higher education marketplace with relevant solution
• Star Tribune: Concordia to cut tuition, fees by $10K
• Pioneer Press: Concordia University slashing tuition, financial aid
• Twin Cities Business: Concordia cuts tuition by a third but slashes aid
• MinnPost: Concordia University trying new tuition approach
• Inside Higher Ed: Concordia St. Paul announces 33% tuition cut
• Fox 9 Twin Cities: Concordia University dropping tuition by $10,000
• WCCO CBS Minnesota: Concordia University cuts tuition 1/3
• Huffington Post: Concordia University cutting tuition by $10,000
• KAALtv: Concordia University cuts tuition by $10,000
• Secrets of the City: Concordia University cutting tuition
• KSTC45: Concordia University cuts tuition by $10,000
• Education Week: Another college moves to reduce sticker price for students
• eLearnPortal: Concordia University St. Paul to cut tuition and fees by $10K
• Orlando Sentinel : Concordia University slashing tuition, financial aid
• Yahoo! News: Concordia University cuts tuition
• NAICU: Concordia cuts annual tution by $10K
• Times Higher Education (UK): News in brief
• NASFAA: Minnesota: Concordia cuts tuition by a third but slashes aid
• Eldersburg Patch: A trend emerging? Some colleges cut tuition rates
• Chronicle for Higher Education – Headcount Blog: How a University Told Students About Its Tuition Cut
• LCMS Reporter: Concordia University, St. Paul cuts tuition by $10,000
• American Radio Works: Tuition Discount (podcast)
• U.S. News & World Report: Colleges Cut, Freeze Tuition For Fall 2013

2006

• 1st Pricing Sensitivity Analysis with Noel Levitz: Research findings showed gap between charges and what students were willing to pay.

2009/2010

• MPCC public opinion research: Findings showed an increase in preference for public schools and decrease for private because of sticker price.

2011/2012

• Launched 2nd Pricing Sensitivity Study: Research findings showed a larger gap between charges and what students were willing to pay, that we were losing students to “low cost” competitors, and that more students would be willing to enroll with a lower price. We tested a variety of prices before landing on the $10,000 reduction.
• Entered partnership with the Lawlor Group for secondary research/environmental scan & branding/messaging campaign.

May 2012

• Board of Regents unanimously approved a 33%, $10,000 reduction in tuition.

Aug. 2012

• Began general brand awareness and value campaign throughout Minnesota.

Sept. 2012

• Announced Tuition Reset to select media ahead of schedule.
• Held press conference on Sept. 12 announcing tuition reset.

Four years ago, The Lawlor Group began working with Concordia University, St. Paul to institute a tuition reset—that is, a significant enough reduction in its published price to function as an access and affordability initiative for its students and to shift the college away from its high-price/high-discount financial model.

To demonstrate how Concordia’s tuition reset was done right, the Lawlor Group offers this white paper, “Tuition Resets: To Do or Not To Do.” It outlines the market forces and institutional circumstances that can warrant consideration of a tuition reset, the steps Concordia took to ensure its reset was a comprehensive strategic initiative, the results of Concordia’s reset three years in, and lessons learned about planning for and implementing a successful tuition reset.

Concordia has a history of fiscal resourcefulness and prudent expense management. Given the current economic climate, the University has become increasingly concerned about students’ and families’ ability to access a private college education. For the past three years we have conducted considerable pricing analyses regarding the tuition reduction. We have learned that the combination of what students actually pay for attending college after financial aid (net cost) and the increased demand created by a lower price point should provide Concordia with a realistic and sustainable model. We take seriously living within our means and have taken steps to limit our overhead costs so that we have the fiscal capacity to reduce our tuition price now without sacrificing the quality education Concordia is known for providing.

For many current students who have been receiving robust financial assistance in the form of federal and state need-based grants plus institutional scholarships, the net cost of tuition will stay roughly the same or change only slightly. All current students returning for the 2013-14 academic year will receive a recalculated financial aid package under the parameters of the tuition reset that will be more advantageous to them than the financial aid package they would have received based on the 2012-13 tuition rate with a standard 4% annual increase for 2013-14.

No. Nothing has been cut or eliminated from the educational experience (in and out of the classroom). Concordia has always offered a high-quality education, and retaining that level of strength while reducing our tuition will improve our value equation.

No, the cohort degree completion program and the graduate program have separate pricing that has been based on a low-tuition model since the inception of these two programs. By extending this model to our traditional program as well, we are able to create alignment so traditional students now can benefit financially in the same way cohort and graduate students always have.

For the 2014-15 academic year and beyond, any tuition increase deemed necessary will be as nominal as possible

For the most part, no. Concordia has been actively and purposefully positioning itself to rely on core operating revenues from tuition and auxiliary services. Our new tuition model is based on lowering both the price and the discount, so that most students’ net price—and therefore the university’s net revenue—is largely unchanged.

While Concordia’s total enrollment is currently at an all-time high, some modest enrollment growth is expected due to the elimination or reduction of cost barriers that now prevent some students and their families from choosing a private university. We also expect this initiative will help more students persist and graduate sooner because the overall cost to attend a private college will be more manageable. Our strategic goal is to keep the traditional student population at approximately 1,500 to ensure a quality experience in and out of the classroom.

Concordia’s vision of building a diverse campus community in the spirit of Christian harmony remains unchanged. Our tuition reset is designed to provide outstanding value to students and families from all income levels.

We believe just the opposite. Concordia’s value is being enhanced by the tuition reset—and consequently, its reputation should also be enhanced. The high quality of the educational experience will be retained, but at a lower published price point, thus improving the value equation.

Concordia alumni and friends have always been an important part of helping Concordia students with financial support, and that will not change. One of the university’s strategic priorities is to boost contributions to our endowment which will go a long way toward limiting the amount of future tuition increases. Now, donor dollars designated to scholarships will go farther in covering students’ net cost to attend. That incentive, in addition to college affordability being such a relevant topic in the marketplace and a cause for so many people, gives us confidence that more alumni and friends will contribute to this cause. The initial response from our alumni and friends has been very positive. Every dollar given after the tuition reset now goes 33% farther in maintaining access to opportunities for students at Concordia.