To compete for top students, colleges have borrowed a tactic retailers have been using for years
- Some private and public colleges are offering to match the cost of tuition of competing universities to incoming students, according to the Wall Street Journal.
- The goal is to entice high-achieving students from across the country and boost academic profiles.
- This price-match guarantee move, a tried and true tactic used by retailers, is a consequence of the expensive cost of college tuition and competition for incoming students.
In the face of rising college tuition, some private colleges are taking a leaf from the books of retailers and offering a price-match guarantee to prospective students, according to the Wall Street Journal.
The goal is to entice high-achieving students who would otherwise attend a less costly public university by matching public in-state tuition.
It's a strategic tactic considering that the cost of college tuition is more expensive than ever, as Business Insider previously reported. Consequently, student loan debt is at an all-time high - a whopping national total of $1.5 trillion, according to Student Loan Hero.
With a 10% increase in students taking out student loans - and borrowing more money while doing so, according to a report by the American Academy of Arts & Sciences, it only makes sense that prospective students might opt for a more affordable college, causing private colleges to vie for their enrollment.
"Some colleges, facing dwindling populations of local high school graduates, are motivated to attract students from across the country," writes Melissa Korn of the Wall Street Journal. "Others are battling the perception they aren't affordable or just looking to boost their academic profiles."
Atlanta's Oglethorpe University is offering to match the tuition price of public universities in high-achieving students' home states in an effort "[grow] the top of the class," the college's president told the Journal. And Robert Morris University in Pennsylvania instituted a new Public Price Match Plus guarantee - including a $3,000 scholarship - to compete with the lower tuition costs of the University of Pittsburgh and Penn State, two nearby public universities.
From the 2016-17 to the 2017-18 school year, the average cost of tuition and fees increased by more than 3% at private and public colleges, according to the College Board's "Trends in College Pricing 2017" report. At a four-year nonprofit private institution, tuition and room and board is $46,950, on average, compared to a four-year public college, which charges an average of $20,770 a year for tuition, fees, and room and board.
The average tuition for out-of-state students, per the College Board's "Trends in College Pricing 2017" report, goes up to $36,420.
And so it's not just private schools offering a price match - Michigan, South Dakota, and Nebraska public universities are offering in-state tuition costs for out-of-state students, the Journal reported.
The competition for top talent is all a part of the vicious cycle of supply and demand.
"The demand for higher education has risen dramatically since 1985," Richard Vedder, an author and distinguished professor of economics emeritus at Ohio University, previously told Business Insider. "Once demand goes up and nothing else happens, that will raise prices."
The more students who want to attend college, the more the cost of college increases. As a result, the rewards of college have expanded and grown from 1985 to a little after 2000 and leveled off in the past decade.
"The advantage of a degree today is less than it was 10 years ago, because of the rising cost," he said.