<p>The campus is abuzz with plans for what the college calls a 12.6 percent “market adjustment” that will be phased in over four years, starting this fall with incoming freshmen.</p>
<p>The proposed increase comes at a time when Grinnell’s tuition and fees - $29,030 this school year - are already nearly $10,000 a year higher than average for Iowa’s private, four-year colleges and universities. The cost of a Grinnell education is $20,000 a year higher than the cost at Iowa’s three public universities.</p>
<p>Grinnell President Russell Osgood said the planned increase would bring the school into line with the tuition charged by Grinnell’s main competitors for students - Carleton College in Northfield, Minn., Macalester College in St. Paul, Minn., and Oberlin College in Oberlin, Ohio.</p>
<p>They shouldn’t be that stunned. The college has been talking about this for some time. I hope they use the extra revenue to increase need-based aid.</p>
<p>My parents were thrilled when I was accepted at Grinnell way back in 1981-- and even happier when I graduated in 1985 as it meant an end to their guessing and worrying about whether or not I would be able to return each year. When I was accepted, it was with a very generous aid package that shrunk to almost nothing the next year. Grinnell is a great school…but I’ve discouraged my own daughter from applying there simply because of the financial aid and tuition rollercoaster.</p>
<p>Why stunned? The 12.6% is to be phased in over 4 years. According to my calculator (while making no attempt at compounding) that works out to 3.15% per year. What’s stunning about that? The article also states, somewhat ambiguously, “starting this fall with incoming freshmen.” Does that mean current students will not get a tuition increase and that only new students will face higher tuition? Sounds like they are still better off than Princeton students, who had NO tuition increase this year.</p>
<p>I also love this sentence:
</p>
<p>huh? I do understand what they are saying: Take from the rich and give to the poor. </p>
<p>Does Grinnell give merit aid? Raising tuition simply gives them greater flexibility. They can award “scholarships” to the students they really want and get some extra revenue from slightly less desirable students with deep pockets.</p>
<p>Yes. That is exactly what they are saying. A progressive pricing model matched by increasing need-based aid is the main reason that sticker prices have increased so dramatically.</p>
<p>This trend is counterd by the “merit-aid” colleges who concentrate their price reductions on wealthier students, primarily those who would not qualify for need-based aid discounts. These colleges have a regressive pricing policy, offering big discounts to higher income students, ultimately at the expense of need-based aid programs.</p>
<p>It is my understanding that this 12.6% “adjustment” would be in addition to yearly tuition increases for all students. In other words, tuition will continue to go up 5-6% per year for all students, and this 12.6% increase (phased in over 4 years) would be on top of that, but added only for incoming freshmen.</p>
<p>By “phased in over four years” I think they mean that incoming freshmen will be hit with the $4200 increase. By the time these incoming freshmen graduate, all Grinnell students will be paying the additional $4200 per year.</p>
<p>Grinnell does give merit aid. Our daughter received a $15,000 per year Trustee Honor Scholarship ( still the maximum amount ) and a $2,000 per year National Merit scholarship from Grinnell. The amount was fixed for four years. Tuition plus room/board was around $29,000 when she started but went up a couple of thousand each year. Grinnell considers Carlton, Oberlin, and Macalester its peers in terms of setting tuition ( all of which charge significantly more ).</p>
<p>Applications will increase. Supply and demand clearly indicate that 12.6% is far too low for a prestige institution. Need-based aid will increase, but won’t be revenue-neutral. However, students from families in the $120-$160k range will get scholarships, and think they are getting a bargain. So mostly it is take from the rich and give to the slightly less rich, and increase applications in the process.</p>
<p>arcadia and idad, I think you are both right. I found a source document… and it gives me a headache. But it does look like existing students will face an annual percentage increase in tuition, and I don’t think that annual percentage is specified. Meanwhile, new students entering in the Fall of 2007 will pay an additional $4200 over what the previously enrolled students will be paying. Current tuition is $28,566 and $4200 is 14.7% of that number, so I’m not sure where the 12.6% comes in, unless the $4200 will be 12.6% of the new higher tuition. Either way the only students who should be “stunned” are the current hs seniors accepted for Fall 07, (and their parents).</p>
<p>I think you are right. However, Grinnell’s strategic plan dealing with tuition revenue is so contradictory that it is nearly impossible to decipher:</p>
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<p>They want to reduce merit aid to increase tuition revenue while improving the quality of the student body. Those two things are mutually exclusive…unless they can bolster the brand-name prestige. The price increase is one way to improve brand-name cachet especially with East Coast customers who expect a good college to be more expensive.</p>
<p>Grinnell has perhaps the most puzzling college financials I’ve ever seen. They have the biggest per student endowment of any liberal arts college in the country, but they don’t spend it. Their endowment spending rate is so low that I keep having this nagging feeling that I must be missing something in their financials. If they increased endowment spending to even a conservative level (4% to 5% a year), they could blow Oberlin and Carleton out of the water with a gilded collegiate experience and/or merit discounts. The only explanation I’ve seen hinted at is that they have a very aggressive endowment investment strategy that may be prone to big downturns.</p>
<p>“Continue commitment to meeting the full demonstrated need of domestic students and reduce reliance on non need-based aid to improve net tuition revenue while maintaining/enhancing the quality of the student body.”</p>
<p>What this means (as it did for Princeton) is yielding more students in the top 5% (but not 3%) of the population ($120k-$160k) who cost them very little, and adds much to their prestige. It is EXACTLY a name-brand booster. </p>
<p>Applications will increase as list-price tuition rises.</p>
<p>You are probably right. Actually it’s a smart strategy and will work for a few years with the ridiculously low acceptance rates in the East Coast schools.</p>
<p>The low sticker price probably turned off the prime east coast consumer base. Raise prices and become instantly become more prestigious. Davidson…are you listening?</p>
<p>Continue spending money on new facilities, more diversity, and faculty.</p>
<p>It’s funny because Oberlin’s strategic plan says Grinnell is killing them with merit aid.</p>
<p>While Grinnell’s tuition hike is part of a broader strategic plan to strengthen the public profile of the college and boost public perception when it comes to the “Chivas Regal effect” - that cheap or cheaper is all too often associated inferior when it comes to the value of higher education - Grinnell is also looking ahead to the end of the current growth baby boom cycle and longer term prospects - which is deemed to be “clouded” since forecasts from the Department of Education project an imminent downturn by 2013 that will be more pronounced in the central Midwest. “These demographics point to the fact that Grinnell College will need to penetrate distant markets with increasing effectiveness.”</p>
<p>Forget east coast snob status—U of Richmond’s applications have declined each year in the two years since the big tuition increase was announced.</p>