Wednesday, October 01, 2014

TYNER: Price versus cost of higher education

By DENNIS TYNER, Ottawa University | 7/2/2013

As referenced in a June 20 Herald editorial, the Kansas Board of Regents did, indeed, approve a tuition increase for public Regents institutions in our state. With prices that might seem inflated to many for a public or private education, it would be easy to overreact to this news and assume that a college degree is simply out of reach for the majority of tomorrow’s young people.

I would like to assuage those fears, however, with a little reality check. What wasn’t addressed in the editorial is an oft-overlooked consideration, namely the actual cost of a higher education versus the sticker price quoted by an institution. The fact is, almost all universities — public and private — offer tuition discounts to their students based on need and/or merit. These discounts are institutional resources provided to students to lower their tuition bill through scholarships and grants, whether unfunded (originating from the school’s operating budget) or funded (taken from the school’s endowed and restricted scholarships from donors). So what a student actually pays for his or her four-year education (cost) is substantially less than the advertised tuition (price).

As referenced in a June 20 Herald editorial, the Kansas Board of Regents did, indeed, approve a tuition increase for public Regents institutions in our state. With prices that might seem inflated to many for a public or private education, it would be easy to overreact to this news and assume that a college degree is simply out of reach for the majority of tomorrow’s young people.

I would like to assuage those fears, however, with a little reality check. What wasn’t addressed in the editorial is an oft-overlooked consideration, namely the actual cost of a higher education versus the sticker price quoted by an institution. The fact is, almost all universities — public and private — offer tuition discounts to their students based on need and/or merit. These discounts are institutional resources provided to students to lower their tuition bill through scholarships and grants, whether unfunded (originating from the school’s operating budget) or funded (taken from the school’s endowed and restricted scholarships from donors). So what a student actually pays for his or her four-year education (cost) is substantially less than the advertised tuition (price).

In fact, as Kevin Kiley pointed out in his article, “Price of a Bad Economy,” in the May 7 issue of “Inside Higher Ed,” the average tuition discount rate — institutional grant dollars as a share of gross tuition and fee revenue — for full-time freshmen enrolled at private colleges and universities across the nation grew for the sixth consecutive year in 2012, reaching a new high of 45 percent, according to an annual survey of private colleges and universities by the National Association of College and University Officers.

According to the survey, 86.9 percent of first-time, full-time freshmen received some form of institutional aid in 2012, with the average award equal to 53.1 percent of the sticker price. The survey also found that, other than research universities, students at small institutions were more likely to receive awards than were their peers at other institutions.

Ottawa University’s residential program is a perfect example of this paradigm. With 98.8 percent of students receiving institutional scholarships — whether academic, activity, athletic or endowed — virtually no student pays the sticker price for his or her education.

For example, in an effort to attract the next generation of exceptional leaders to OU, the Presidential and Provost scholarships provide full and three-quarter tuition, respectively, to qualified students, and the full-tuition Ottawa High Achiever Scholarship is awarded to one Ottawa High School senior each year. In 2012-2013, 21 Presidential and 18 Provost scholarships were awarded. The university also continues to offer a free education to all members of the Ottawa Tribe of Oklahoma.

Through these and numerous other scholarships, OU discounted the tuition of 587 undergraduate students by a whopping $7,575,755 for the 2012-13 academic year, making the university extremely competitive in comparison to the national tuition discount average. When you consider that the majority of students also receive federal and state grants, as well as subsidized and/or un-subsidized loans to assist with the remainder of their college expenses, an education at OU clearly is not out of reach for “all except the privileged few.”

Like many institutions, OU understands the difficulty of saving for college during the recent and continuing economic downturn and remains dedicated to assisting students in making their education affordable. So, if you’re a prospective student or the parent of one, I encourage you not to despair. A private college education is still attainable.

If you are someone who values education and wants to ensure that it continues to be available to tomorrow’s bright young minds, I encourage you to contribute to the endowment of your favorite institution. It’s only through donors like you that colleges and universities can continue to offer these types of tuition discounts to deserving students.

Dr. Dennis Tyner is vice president and provost at Ottawa University, Ottawa.

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