$10,000 tuition cut pays off for St. Paul's Concordia University

  • Article by: MAURA LERNER , Star Tribune
  • Updated: August 31, 2013 - 10:08 PM
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At Concordia University in St. Paul, Carrie Reber, son Josh, and husband Steve all brought up Josh’s stuff into Wollaeger Hall. Carrie and Steve met at Concordia when they went to school there.

Photo: RICHARD TSONG-TAATARII , Star Tribune

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 Last spring, as Linzy Heim was narrowing down her list of college choices, she got a call from the softball coach at Concordia University in St. Paul.

Did she know that the century-old Lutheran college was slashing its tuition by $10,000?

Her mom, Denice, was stunned.

“When we started looking, the tuition was quite frightening,” she said. The price cut helped seal the deal.

Last weekend, Linzy, an All-Star softball pitcher from Plattsmouth, Neb., moved into the freshman women’s dorm, Luther Hall, as part of Concordia’s biggest entering class in decades.

At a time of growing angst about the cost of a college education, Concordia is one of a handful of schools that have bucked the national trend and slashed their sticker prices this year, according to the National Association of Independent Colleges and Universities.

The small school’s grand gesture ­— to roll back undergraduate tuition from $29,700 to $19,700 this fall — has paid off dramatically. The number of new students has jumped 65 percent, setting a record for both freshmen and transfers.

You might think that a 33-percent price cut would put a substantial dent in a school’s income. But in the convoluted world of college financing, nothing’s that simple. In Concordia’s case, the school actually came out ahead.

Almost no one was paying full price anyway, said Eric LaMott, the school’s senior vice president and professor of kinesiology. Yet the sticker price, surveys showed, was scaring away potential students. “People don’t even look at you if you’re over a certain price point,” LaMott said.

As its price crept up, Concordia found it had to keep upping its financial aid to attract students. By last year, the school was subsidizing more than 40 percent of tuition costs out of its own coffers, through scholarships and grants.

“We charged $29,700, [but] we gave 40 percent back,” said Kristin Vogel, the director of undergraduate admission. So they asked the question: “Why not bring the sticker price down?”

The news, announced last September, grabbed headlines across the country. Concordia was flooded with calls, many asking if “this was real,” said Vogel.

And it got the attention of prospective students and their families.

“I was pretty excited,” said Margot Cowing, of Springdale, Ark., whose son is a freshman this year. “Most places are raising tuition; nobody’s cutting.”

The dorms are full

Since announcing the “tuition reset,” as officials like to call it, Concordia has faced an onslaught of pleasant challenges. Campus visits soared by 30 percent; so did applications. Now, the dorms are full for the first time in years; the school had to convert unused space into extra classrooms.

Total undergraduate enrollment hit 1,375 for the first time.

The crowds were visible last weekend, as freshmen lined up in the chapel to sign up for meal plans and mailboxes, and paraded through the dorms hauling futons, popcorn makers and flat-screen TVs.

(Room and board stayed the same as last year: $7,750).

Ben Herwig, a freshman from Portage, Wis., had Concordia on his radar for some time, said his dad, Cory. But the price cut made it even more appealing.

“It was probably the best rate of any of the schools we looked at in Wisconsin,” he said.

Carrie Reber, of Fort Worth, Texas, said the price tag was clearly a consideration for her 18-year-old son, Josh, who is starting his freshman year. “Well, money is money,” she said. “Ten thousand dollars is a big chunk that you don’t have to borrow.”

Reber, a Concordia grad herself, said she read about the tuition cut in her alumni newsletter. She and her husband, Steve, met at the St. Paul campus as undergraduates in the early ’80s.

Steve Reber laughed when asked what it cost back then. Less than $4,000, he recalled, for room, board and tuition. “I had to take out a $750 student loan,” he said. “That was big money.”

Concordia figured it would break even if it boosted new-student enrollment by 20 percent. They tripled expectations. As of the first day of class Thursday, 462 new undergrads enrolled at Concordia — an all-time high — up from 279 last year. That includes an increase in international students, who pay a higher rate, Vogel noted.

With the new price, the school reduced the amount it spent on financial aid from $13,454 to $4,176, on average, per student.

Even so, all undergraduates, including returning students, are paying less than they would have last year, said Vogel. “It’s not just a shell game. We wanted students to see a savings,” she said.

Nor has the school cut programs to save money, she said. In fact, it added five new faculty members this year.

‘Can you sustain that?’

Few, though, predict that the idea of cutting tuition will catch fire anytime soon.

“It’s been tried before,” said Paul Hassen, a spokesman for the National Association of Independent Colleges and Universities. While he called it a “bold move,” he said the benefits may be short lived. “Yes, you’re getting a bump in students,” he said, but “can you sustain that? Because unfortunately, the expenses to run the college continue to go up.”

So far, no other university in Minnesota has followed Concordia’s lead.

While the state’s public colleges froze tuition this year, private schools raised tuition an average of 3.5 percent, according to the Minnesota Private College Council. Concordia’s tuition is now well below the private school average of nearly $35,000 this year.

But that doesn’t mean students at other private schools are paying that much more, said David R. Anderson, president of St. Olaf College in Northfield, Minn. “Something like 84 percent of our students are receiving some form of financial aid,” he said.

At the same time, he says all colleges and universities are feeling the pressure to rein in costs. “I do think that the current model is unsustainable over time,” he said, “and I do think that people are pushing back.”

The question comes down to this: how to provide the kind of education “students want and deserve” and still can afford, he said. “Everybody’s scrambling to figure [that] out right now.”

Next year, Concordia officials expect tuition to rise again by a small percent. “This isn’t a tuition freeze,” said LaMott. “That’s why we coined the word ‘reset.’ ”

For now, though, there are no regrets.

“This was the right move for a school like Concordia,” said Vogel. “But it may not be the right move for every school. In higher ed, we have a model where you increase tuition every year. I think it’s very hard for universities to break out of that mind-set.”

 

Maura Lerner • 612-673-7384

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