Link to Interview with Sewanee President Discussing 10% Tuition Decrease

Parents Forum
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<p>[PJTV</a> - Downgrading Tuition Costs: How One University Is Bursting the Education Bubble - Glenn Reynolds](<a href=“http://www.pjtv.com/?cmd=mpg&mpid=86&load=4981]PJTV”>http://www.pjtv.com/?cmd=mpg&mpid=86&load=4981)</p>

<p>This is a 13 minute interview in which John McCardell talks about the decision to cut costs at Sewanee by 10%. He explains the rationale that went into the decision as well as what happened in the aftermath of the decision. This could be an important moment, depending on how other colleges react.</p>

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<p>Bunch of malarkey. He could just as easily have enhanced financial aid to those who couldn’t afford the list price, and had those who could pay do so. But he doesn’t want to lose his rich families - they must feel like they’re “getting a bargain”. (I’m betting that, within a year, we will see their number of applicants decline.)</p>

<p>If I were another college head, I’d see it as the desperation of a safety school.</p>

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<p>Sewanee might be a safety school for your kid, but not for mine. But thanks for the condescension.</p>

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<p>mini:</p>

<p>I agree with you. Sewannee is one of the least diverse colleges in the United States: 83% white. There are probably Klan rallies that make more effort to have some diversity. All this tuition ploy does is further benefit wealthy near-full-pay students while providing zero benefit to need-based aid customers. If the goal is to get to 90% white, this is a good policy change.</p>

<p>To help with conceptualizing this issue think about the impact of the change on two students:</p>

<p>a) A student living in poverty qualifying for 100% need-based aid. </p>

<p>b) A student with a family income of $10 million a year, paying full sticker price.</p>

<p>Student a) gets no benefit from this change. Student b) sees a 10% reduction in his tuition bill. Which student is Sewannee hoping to attract?</p>

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<p>The stated goal is to increase the availability of need-based financial aid by reducing merit-based aid and recruiting more full-paying customers (facilitated by lowering the cost of attendance to the out-of-state level at the flagship universities in the surrounding states). </p>

<p>

</p>

<p>[News:</a> Price Check at Sewanee - Inside Higher Ed](<a href=“http://www.insidehighered.com/news/2011/02/17/sewanee_cuts_its_tuition_by_10_percent]News:”>http://www.insidehighered.com/news/2011/02/17/sewanee_cuts_its_tuition_by_10_percent)</p>

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<p>Colleges don’t “spend” on merit air or need-based aid. They offer discount pricing to fill their seats, just like the airlines do. They charge every customer a different price and offer steeper discounts as necessary to fill the seats. </p>

<p>The notion that Sewannee is doing this to “reduce spending on merit aid” is marlarkey. What they are really doing is offering a merit aid price cut to every student who writes a tuition check. This is targeted at upper middle class students – near full-fare customers. This is, in no way, shape, or form a program from a college looking to increase need-based aid or diversity. </p>

<p>That’s fine. There are plenty of schools that attempt to maximize tuition revenue in this way. I have no problem with that. McCardell’s rhetoric, however, is rather disingenuous.</p>

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<p>The other question is whether it will work. Several schools, including Grinnell, have tried the low-price option and found that it wasn’t effective marketing in a luxury-segment of the market. Most of these have made a strategic decision to increase their sticker prices to fall more in line with the prestige end of the market. Sewannee may have diffferent competitive pressures, I don’t know.</p>

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<p>“Sewanee might be a safety school for your kid, but not for mine. But thanks for the condescension.”</p>

<p>This is an objective question, not a subjective one. Find out what their yield is. </p>

<p>They could decrease merit aid, increase list price, and then have plenty of money for those who need it to attend. But that won;t attract the near-full price candidates they want. </p>

<p>“What they are really doing is offering a merit aid price cut to every student who writes a tuition check.”</p>

<p>Precisely. (And watch - it will backfire - they will have fewer applicants and a lower yield two years from now.)</p>

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<p>

Only three years ago Sewanee was 88% white. They are trying.</p>

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<p>is it a white only college?</p>

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<p>This discussion of race, class and college tuition is an interesting one. </p>

<p>I checked the following 2 liberal arts schools in addition to Sewanee on IPEDS and NACUBO for net price, enrollment, and endowment numbers. Both of these schools are ‘top liberal arts’ colleges as defined by CC, with Amherst being in the Northeast and Whitman in the Northwest to get some geographical diversity</p>

<p>Amherst Whitman Sewanee
endowment: 1.385 billion 334 million 272 million
enrollment: 1,744; 39% white 1515, 67% white 1543, 86% white</p>

<p>net price by income level (for those receiving Title IV aid)<br>
0-30K 30-48K 48-75K 75-110K 110K<br>
A 3317 8160 12385 19140 29203
W 13262 18313 21329 27868 33878
S 4731 9369 9935 10049 27035 </p>

<p>I think that Amherst has no merit aid, only need based aid, while Whitman and Sewanee would have merit aid.</p>

<p>It’s hard for me to understand how at Whitman, if you are between 0-30K, the net price is $13,262, since I can’t see how a family with that much income can actually afford that price, so maybe I misunderstand the tables.</p>

<p>But if we just take these numbers, it doesn’t necessarily mean that the lower ‘net price’ compared to income level increases diversity, since Whitman is more racially diverse than Sewanee yet has a higher overall net price across all income levels.</p>

<p>Sewanee is about $1400 more than Amherst for those families with 48K or under. However, for those families over 48K, it’s net price is less. Perhaps this reflects the need-only versus merit + need aid? </p>

<p>It’s interesting that Sewanee has a lower endowment than Whitman, yet overall seems to have a significantly lower net price than Whitman. Sewanee seems to keep pace with Amherst at most income levels at a significantly lower endowment. So again, I’m not sure I’m interpreting these numbers properly, because I would expect Sewanee to look more like Whitman.</p>

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<p>By reducing costs by 10%, they are reducing the amount of financial aid and loans needed to pay for the school I have not checked the stats, but my guess is that there are a fair number of Sewanee students on financial aid. </p>

<p>My kids’ high school tended to steer their students towards LACs like Sewanee (and Sewanee has some very nice merit awards), but the AA kids just are not interested in that school. Taking one look at the college data shows that very clearly. My sons both played football, one captained, and many of the AA guys were on the team. The names of this college, both Sewanee and University of the South were offensive to them just as Salve Regina was. Yes, I heard them joiking about it, but I didn’t see an apps going that way either, even though the chances for some nice awards were relatively high at both schools for this group of guys.</p>

<p>I wish my son’s LAC would cut tuition by 10% next year. I am envious of Sewanee parents.</p>

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<p>Sewanee accepts roughly 60-65% of their applicants, but their yield is only around 22%. (Typical safety school numbers). If applications drop, and drop as well at schools that are their direct competitors, they will have increasing difficulty getting the class they want. So the strategy is to make it “feel” like a good deal to desirable high-paying customers, even at the expense of needier ones. Tuition, however, is only one part of the cost. A drop of $3,500 or so in total costs (less, if you consider that room and board will continue to rise) will probably not offset the “prestige” value of high-paying parents being able to say their son or or daughter received a “merit scholarship”.</p>

<p>Sewanee doesn’t look at all like Whitman or Amherst because their selectivity and yield are far different. I’d have to look it up, but probably more like Denison or Ohio Wesleyan. I expect this “experiment” will fail within two years.</p>

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<p>In certain ways, Sewanee looks more like Whitman than it does Amherst. Sewanee’s endowment is more like Whitman’s than Amherst’s. And in terms of admissions and yield, while Sewanee is still below Whitman’s, it’s still more similar to Whitman than Amherst.</p>

<p>Sewanee admit: 62%
Whitman admit: 47%
Amherst admit: 15%</p>

<p>Sewanee yield: 23%
Whitman yield: 28%
Amherst yield: 40%</p>

<p>Yet Sewanee looks more like Amherst in terms of ‘net price’, especially in the lower income range, despite having a much smaller endowment than Amherst, one that is more similar to Whitman. </p>

<p>It’s seems to me that Sewanee is using its resources better with respect to net price in the lower income brackets than a school like Whitman which has a similar endowment. Yet Whitman is still more diverse.</p>

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<p>We constantly get complaints here from folks who say they are full pay, but really can’t afford the COA. </p>

<p>If Sewanee wants to market to that segment, I got no problem with that. Thats a legitimate approach. if you dont like it, there are plenty of other choices. </p>

<p>I hope this might lead to less whining from full pays, but I am not holding my breath. ;)</p>

<p>And yes, I certainly expect any university to try to explain any change in policies in the best light possible.</p>

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<p>skrlvr’s point is interesting. Sewanee has impressive net prices for lower income bands. Is it that they don’t admit very many students in these bands since they don’t claim to be need-blind? Or it’s not a place that attracts many lower income applicants?</p>

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<p>Quote:
“I agree with you. Sewanee is one of the least diverse colleges in the United States: 83% white. There are probably Klan rallies that make more effort to have some diversity.” </p>

<p>LOL–majority white = worse than a Klan rally? Racist much? (I believe mini was talking about economic diversity.)</p>

<p>You’d find many colleges, including historically black colleges, that are less “diverse.” Is that a bad thing? If Sewanee is an academic, social, cultural, geographic, financial fit for its students–but not for you or your kid–why should you care what race most of its students identify with? </p>

<p>(btw, I have no connection with Sewanee. Or the Klan :wink: )</p>

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<p>A college has to work hard to have a student body so lacking in diversity.</p>

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<p>That’s a good point to see who’s applying and who’s getting admitted in terms of income level. I don’t think I can find that information.</p>

<p>Another good comparison to Sewanee would be Rhodes. About the same size, same endowment, same state, same ACT range. However, it’s in a different setting: Rhodes is in an urban/suburban setting being in Memphis, while Sewanee is quite rural being situated on the Cumberland plateau. It’s pretty remote. </p>

<p>They also get a very different number of applications</p>

<p>Rhodes: number applied: 5039, percent admitted: 42%, yield: 20%
Sewanee: number applied: 2765, percent admitted: 62%, yield: 23% </p>

<p>Yield here is not correlating with selectivity.</p>

<p>ACT range
Rhodes: 26-30 Sewanee: 26-30</p>

<p>Endowment
Rhodes: 252 million Sewanee 272 million</p>

<p>Size
Rhodes: 1,673 Sewanee 1,543</p>

<p>But the net price data is very different.</p>

<p>0-30K
Rhodes: 14249 Sewanee: 4731
30-48K
Rhodes: 15584 Sewanee: 9369
48-75K
Rhodes: 19797 Sewanee: 9935
75-110K
Rhodes: 23223 Sewanee: 10049
110K and above
Rhodes: 28746 Sewanee: 27035</p>

<p>In terms of net price, Rhodes looks more like Whitman. Also, interesting enough, Rhodes is about 75% white. So it’s better in terms of diversity.</p>

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<p>Hmmm. Is Whitman more diverse than Sewanee? I guess–but Sewanee has 4% black students, while Whitman has only 2%. The biggest difference is in the number of Asian students. Also, Sewanee has very few international students.</p>