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Colleges offer deals to combat rising tuition

Published: Wednesday, Aug. 28, 2013 3:00 p.m. CDT

PHILADELPHIA — Tony Hall tells his five daughters they must go on to college and get their degrees, but he doesn’t have one himself.

“It’s kind of like a hypocrite. I say a degree is important, but they don’t see mine hanging there,” said the 35-year-old insurance agent from Wyncote, Pa.

In July, Hall set out to change that by enrolling at Strayer University, a for-profit institution that offers a primarily business curriculum and caters to working adults. His decision was largely influenced by a new offer at Strayer: tuition breaks.

For every three courses he completes, he will get one tuition-free. No minimum grade-point average is required, just completion. That benefit, however, can be cashed in only during his last year at Strayer.

Strayer’s approach is one way colleges are trying to mitigate the rising cost of tuition as pressure mounts from students facing a crushing debt load. Last Thursday, President Barack Obama said he planned to create a college rating system and policies that award federal financial aid based on factors such as tuition, graduation rates, and student debt.

Karl McDonnell, chief executive officer of Strayer Education, in Herndon, Va., says the program will not only address rising tuition costs but will boost graduation rates.

Students who start as freshmen could earn their entire senior year tuition-free, saving nearly $18,000 — but only if they finish their education. Only 2 percent of Strayer’s students, however, come in as freshmen.

Though the university may lose money from students who earn free tuition, it will do better in the long term if larger numbers stay in school and finish, McDonnell said.

“We consider that a favorable trade-off,” he said.

About 35 percent of undergraduates who come in as freshmen complete their studies in six years, the university said. Of those who come in with the equivalent of an associate degree, 69 percent complete in six years.

Around the country, colleges are trying different approaches to cut tuition costs.

Cabrini College, a Catholic school in Radnor, cut its tuition by 12.5 percent to $29,000 for the 2012-13 school year. It then froze tuition for 2013-14, as well as most room and board rates.

Rowan University, a state school in Glassboro, also froze tuition this year. Peirce College in Philadelphia will give a 10 percent discount on summer tuition to students who attend the previous fall and spring semesters.

Some colleges have created online degree programs and accelerated degrees so students can graduate earlier and avoid more debt. States, including Florida, Texas, Wisconsin and California, have seen a push for a $10,000 four-year degree.

Nationally, for-profit universities have been more likely than their nonprofit counterparts to offer rate cuts, said Richard Vedder, a professor of economics at Ohio University who heads the Center for College Affordability and Productivity.

He called Strayer’s initiative “an intriguing idea.”

“Students who stay in school should face some rewards,” he said. “It’s a marketing device for Strayer, but it also serves a useful social function.”

But Laura Perna, a University of Pennsylvania professor who specializes in higher education, questioned how effective Strayer’s approach will be. Many adult students, who are juggling family life and a job, could run into trouble before senior year. The plan doesn’t help students in the first year, she said.

“I’m not sure if this is really tinkering at the margins,” she said, “rather than addressing the underlying issues.”

Two-thirds of Strayer students are female, and the average age is 35. Most work during the day and attend school at night. Strayer offers both online and on-campus classes, as well as graduate degrees.

About half of Strayer’s students have had some college before entering one of the system’s 100 campuses across the nation, McDonnell said. Strayer has 27,000 undergraduates nationwide.

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