Tuition promises mostly signal clarity rather than price cuts
Middlebury College looks expensive. Stately buildings of Vermont limestone surround meticulously tended lawns in a village that could be the setting for a Hallmark Christmas movie. But like other universities and colleges, the school is working hard to persuade people that it is not.
Middlebury has announced that students from families with household incomes up to $175,000 can enroll tuition-free — a threshold more than double the nation’s median household income. The offer makes Middlebury one of a growing number of colleges trying to reduce widespread public confusion about what college actually costs.
The college said the offer will newly help 35 to 50 families in the incoming class, which typically enrolls about 630 new students per year. Most people from families earning $175,000 or less already attend without paying tuition.
“Let’s make it as non-complicated as possible,” said Ian Baucom, president at Middlebury. “If your family income is $175,000 or less, at Middlebury, you don’t pay tuition.” What the school is doing, he said, is trying to “just [be] really clear and get that out of the way, and then let the students decide.”
Baucom said consumers “are broadly aware that there is financial aid, but often it’s just difficult to figure out, ‘How does it work? How do I get access to it?’” The confusion falls hardest on low-income students and on young people whose parents didn’t go to college, admissions officials said.
Nearly 80% of families of all kinds that were considering sending a student to college eliminated a school from consideration based on the price, a survey by the student loan company Sallie Mae found.
Middlebury becomes the latest of a growing number of schools to make tuition guarantees, including Princeton for most families earning up to $250,000 with typical assets, the University of Chicago ($250,000), MIT ($200,000), Harvard ($200,000), Swarthmore ($200,000) and Davidson ($175,000).
Most of these schools aren’t necessarily lowering their prices — just trying to make them more clear, said Phillip Levine, an economist at Wellesley College who studies higher education finance and is the author of the book Hidden Tuition: An Insider’s Guide to College Pricing and Financial Aid.
When families see these pronouncements, they think, “‘Oh, wow, the college is cutting the price.’ And that’s almost a perfect example of the misperceptions of the pricing system,” Levine said. In fact, said Levine, whose research bears this out, at most of the institutions making these tuition-free guarantees, “the college was already free for almost all those kids.”
Free tuition guarantees don’t cover room, board, books, transportation or other expenses — $24,462 a year at Middlebury — though other financial aid is often available for those.
Most of the growing number of income-based tuition plans take effect next year, as at Middlebury, or began for students who enrolled this fall.
The timing is not coincidental. Many of these schools have reached or surpassed a listed price of attendance of $100,000 a year; at Middlebury, it’s $97,386. And public confusion about how much they actually cost after discounts and financial aid is helping drive a near-record-low confidence in higher education that threatens to exacerbate enrollment and revenue challenges.
Nearly 70% of students and parents think the financial aid process is partly or completely confusing, according to a survey by the Strada Education Foundation. A Gallup survey found that most Americans also think that colleges are overpriced, with nearly two-thirds saying four-year institutions are unaffordable, and that among parents who don’t want their children to attend a four-year college, the biggest reason was the cost. More than three-quarters of adults without college degrees couldn’t correctly estimate the price of a public four-year institution within $5,000, another survey, by Gallup and the Lumina Foundation, showed. (Lumina and Strada are among the funders of The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education, which produced this story.)
A culprit, experts say, is colleges’ own policy of advertising a high list price that almost no one pays, then giving discounts — a strategy that evolved from a time when the price was intended to signal value and the discounts, which colleges call “scholarships,” were meant to entice the most desirable prospective students to enroll. At 445 colleges and universities of all kinds, not a single student now pays the advertised price, according to a Hechinger Report analysis of federal data. At private, nonprofit four-year universities and colleges, fewer than 1 in 5 families pay that amount. Yet consumers appear fixated on that listed “sticker” price.
“The most important problem, I would argue, in college pricing today is the lack of transparency,” Levine said, adding that even he had trouble figuring out the prices when he sent his sons to college, despite his Ph.D. in economics. “If you’re going to charge people different amounts of money, you have to provide them with some indication of what that’s going to be. Or how are they supposed to make good financial decisions? And for the most part, we don’t do a very good job of accomplishing that goal.”
One reason is that colleges often don’t give families a final price until after a student is accepted and submits financial documents. “I mean, you’re waiting till the end to see how it all shakes out, and you won’t know until, really, you have your FAFSA filled out,” said Liz Mark, a mother from Wisconsin who was making a fall visit to Middlebury with her high school junior, Charlotte. Mark was referring to the Free Application for Federal Student Aid, and she compared it to the pricing system for medical care: “It’s a little bit like going to the doctor, right? You don’t know exactly how much a procedure is going to cost until you get all of that information and get your pre-approvals.”
Another parent touring Middlebury, Mark Doughty, said he was lucky to have a friend who works in higher education, who helped him better understand the process. “The price on the menu is not necessarily what you pay,” Doughty said he learned. “If you don’t have some guide through the system, then you could walk in and pay way more than you have to,” said Doughty, of Massachusetts, who already has a son at Middlebury and a daughter considering applying there. Free-tuition promises based on family income are at least “creating a very clear ceiling,” he said.
Two newer reasons are also driving the shift, said Nicole Curvin, dean of admissions and vice president of strategic enrollment at Middlebury: general anxiety about the cost of living and a fast-changing labor market. “The economy is all over the place. Undergraduates are concerned about their employment opportunities. They are concerned about everything from AI to world dysfunction,” Curvin said. “Affordability is the top question that every family is asking us, and we have to be willing to address that.”
Other colleges are also looking for ways to make prices more transparent. A few are simply lowering them, including Prescott College in Arizona, the University of Tulsa and Concordia University, St. Paul in Minnesota. The University of Pennsylvania, which already makes tuition free for students from families earning $200,000 or less, just debuted a calculator that can tell families — before they apply — how much going to the university will cost them. “Penn is more affordable than most people realize,” the calculator’s webpage says.
“Higher ed in general is trying to respond to some of those concerns, some of those questions” about what college really costs, said Mariana Valdes-Fauli, the university’s associate vice president of student registration and financial services. “This really just kind of opens our door to our financial aid process and what we consider and what we don’t, to allow all kinds of students to see that Penn is a real option.”
Colleges with fewer resources are offering free-tuition promises to more limited audiences. Earlham College is making tuition free for students from families earning $100,000 or less who live in its home state of Indiana. First-year students in New Hampshire whose families earn $100,000 a year or less will be eligible for free tuition at that state’s public universities and colleges. At North Carolina’s private Wake Forest University, starting this fall, in-state students from families earning $200,000 or less pay no tuition. Marist University in New York is capping tuition at $32,000 a year starting next year for new students from that state whose families have incomes of $200,000 or less.
The stakes reach beyond who applies to Middlebury, Baucom said, regardless of families’ incomes. “The social contract of American life depends upon the idea that everyone can come into the fullness of what it means to live and think and study and work here. And that’s fracturing,” Baucom said. The idyllic campus outside his office window, he acknowledged, “might convey [that] this is not for your family. And I just want to be as simple and clear as possible: We want every family, and families of all sorts.”