Tuition Reset

Concordia’s vision is to provide outstanding value by offering an education of high academic quality that is reasonably priced so that our students can achieve personal and career success. We recognize that the growing reliance on student loans nationwide can lead to accumulated debt that impedes many graduates’ efforts to build financial security for themselves. Concordia heard the demands of students and their families to take real action on college affordability.

Concordia itself was in a position of strength when we moved ahead with the tuition reset in 2013-14, with record enrollment numbers and higher academic profiles in the years leading up to our tuition announcement. But the economic recession had eroded the financial situations of many students and families we serve. As a result, Concordia for several years increased the institutional scholarship and grant aid awards along a trajectory that was simply not sustainable. So we decided to respond with a relevant and real solution.

Concordia has a culture of fiscal prudence and a strong history of effective strategic planning, conservative forecasting of revenue growth, and careful attention to expense management. We have a diversified revenue stream, thanks in part to our cohort adult degree-completion and graduate programs, and have disciplined ourselves over the past decade to operate with low overhead and to rely on the core operating revenues of tuition and auxiliary services. Concordia spent three years intentionally planning for and creating the specific conditions that would allow us to reset our tuition.

The decrease in tuition was accompanied by a decrease in our discount (institutional aid), but our move from a high-tuition/high-discount model to a low-tuition/low-discount model lowered our students’ net cost when compared to the annual 4-percent increase they would have otherwise experienced. It also brought our traditional undergraduate program into greater alignment with our cohort and graduate programs, which from their inception have operated with a low-tuition/low-discount model.

The tuition reset was revenue neutral for Concordia given projected enrollment levels. The short-term cost to the university of including returning students in the tuition reset was absorbed by Concordia through operations, donations to the annual fund and endowment.

Every new and returning student saw a reduction in their total out-of-pocket tuition costs. In fact, when we calculated the out-of-pocket savings for all full-time students in 2013-14, we found an average savings of $2,542 compared to if we hadn’t reset tuition. (Out-of-pocket costs are the price of tuition minus any grants or scholarships received.) For students who qualify for need-based financial aid, Federal Pell and Minnesota State grants stretched to cover a greater portion of their tuition expense. And the amount of loans needed to pay for out-of-pocket costs was therefore reduced, as well. Those are real savings, especially when calculated over four years.

With our tuition price rolled back to what it was a decade ago, Concordia is one of the most affordable private universities in Minnesota and the Concordia University System. The average net cost for our students is comparable to many of the region’s public universities. In resetting tuition, nothing was cut or eliminated from the Concordia educational experience in or out of the classroom. So retaining the high quality of education while reducing tuition costs has made a Concordia degree even more valuable.

Enrollment at Concordia climbed to an all-time high following news of our tuition reset, indicating that the market of higher ed is, in fact, looking for transparency in pricing and moves toward affordability. Concordia’s spring 2014 enrollment reached 3,652, up from 3,015 the previous year. Retention rates have also climbed.

“Given the socio-economic background of many of our students, these numbers (retention rates) are refreshing and help us measure our progress on our goal to increase retention and persistence to graduation,” said Concordia President Tom Ries.

2006

• 1st Pricing Sensitivity Analysis with Noel Levitz: Research findings showed gap between charges and what students were willing to pay.

2009/2010

• MPCC public opinion research: Findings showed an increase in preference for public schools and decrease for private because of sticker price.

2011/2012

• Launched 2nd Pricing Sensitivity Study: Research findings showed a larger gap between charges and what students were willing to pay, that we were losing students to “low cost” competitors, and that more students would be willing to enroll with a lower price. We tested a variety of prices before landing on the $10,000 reduction.
• Entered partnership with the Lawlor Group for secondary research/environmental scan & branding/messaging campaign.

May 2012

• Board of Regents unanimously approved a 33%, $10,000 reduction in tuition.

Aug. 2012

• Began general brand awareness and value campaign throughout Minnesota.

Sept. 2012

• Announced Tuition Reset to select media ahead of schedule.
• Held press conference on Sept. 12 announcing tuition reset.

When The Lawlor Group began working with Concordia University, St. Paul to institute a tuition reset—that is, a significant enough reduction in its published price to function as an access and affordability initiative for its students and to shift the college away from its high-price/high-discount financial model.

To demonstrate how Concordia’s tuition reset was done right, the Lawlor Group offers this white paper, “Tuition Resets: To Do or Not To Do.” It outlines the market forces and institutional circumstances that can warrant consideration of a tuition reset, the steps Concordia took to ensure its reset was a comprehensive strategic initiative, the results of Concordia’s reset three years in, and lessons learned about planning for and implementing a successful tuition reset.

Concordia has a history of fiscal resourcefulness and prudent expense management. Given the current economic climate, the University has become increasingly concerned about students’ and families’ ability to access a private college education. For the past three years we have conducted considerable pricing analyses regarding the tuition reduction. We have learned that the combination of what students actually pay for attending college after financial aid (net cost) and the increased demand created by a lower price point should provide Concordia with a realistic and sustainable model. We take seriously living within our means and have taken steps to limit our overhead costs so that we have the fiscal capacity to reduce our tuition price now without sacrificing the quality education Concordia is known for providing.

For many current students who have been receiving robust financial assistance in the form of federal and state need-based grants plus institutional scholarships, the net cost of tuition will stay roughly the same or change only slightly. All current students returning for the 2013-14 academic year will receive a recalculated financial aid package under the parameters of the tuition reset that will be more advantageous to them than the financial aid package they would have received based on the 2012-13 tuition rate with a standard 4% annual increase for 2013-14.

No. Nothing has been cut or eliminated from the educational experience (in and out of the classroom). Concordia has always offered a high-quality education, and retaining that level of strength while reducing our tuition will improve our value equation.

No, the cohort degree completion program and the graduate program have separate pricing that has been based on a low-tuition model since the inception of these two programs. By extending this model to our traditional program as well, we are able to create alignment so traditional students now can benefit financially in the same way cohort and graduate students always have.