Traditional plateau pricing was originally designed to incentivize early completion. But for adult part-time students who are balancing education with family and work responsibilities, they end up paying more per credit hour for the same education. Others may overstretch themselves just to take advantage of the discounted tuition, ultimately having a poor experience or dropping out.
As adult learners are rapidly overtaking traditional students in sheer numbers, what does that mean for traditional pricing structures?
Dr. Roger LaMarca, Executive Director of Enrollment Management and Educational Development at Southern Utah University (SUU) joined the Enrollment Growth University podcast to talk about the negative consequences of well-intentioned “plateau tuition” policies, and the need to revisit our pricing strategy economics in higher ed.
What Is the Part-Time Student Price Penalty?
Plateau tuition was created with the purpose of helping students graduate. Ideally, if a school charged a premium for for 1-11 credits and a discount for anything over 12 credits, then the student would be incentivized to complete more credits every semester and graduate faster.
In theory, that was a great opportunity for students to look at what they could do, push themselves to take a few more credits, engage more with their studies, and ultimately graduate a little bit faster.
The original incentives made sense. Now, however, with nontraditional students who work at least part time having become the majority student demographic in higher ed, plateau and block tuition pricing models have become potentially problematic.
“The majority of our students,” Roger told us, “are working. They have families. They have lives, and taking an entire 12-15 credits per semester is overwhelming for them.”
And because of the plateau pricing model, they were paying premium prices for their education.
That approach really hindered the students who were trying to go back, finish their degrees, and be successful in their careers. The university was charging them a really high price point to do something positive.
Southern Utah University’s Solution to the Part-Time Student Price Penalty
Adult students are just as engaged and often more successful than traditional learners because of their experience and understanding of the material. SUU wanted to keep them.
“We said, ‘We think we can do a better job,” Roger told us. ‘We think that we can give them a price point more in line with what our traditional students are paying, and we can help them earn the credits they need on their schedules according to their lifestyles to be successful in their education.”
Consequently, SUU reduced the tuition price to a $300 per-credit cost whether you take one credit or 15 credits. The university also eliminated all the fees on campus because online students for the most part are not participating in those things.
Now, the online student or the nontraditional student is getting charged at a price point consistent with what a traditional student would pay between 12-15 credits, but it allows them to take the exact number of credits that they need based on their lives and what they’re trying to accomplish.
Concerns Around the New Pricing Model
Are the administrators at SUU nervous that this new pricing model might limit the total number of credit hours students take?
“Those were some concerns,” Roger acknowledged. “We are trying to keep our full time enrollment (FTE) high obviously. When we allow the student to take fewer credits, potentially that FTE goes down.”
However, Roger and his colleagues felt like the new model was best for the students in the long run. The team at SUU didn’t want working professionals to try to take more credits than they should because of old-fashioned incentive models. Roger worried that approach would not be a good educational experience for the students.
“We wanted them to really be able to engage with the curriculum and give it all that they had,” Roger said, “and in order to do that, we needed to make a change.”
The new pricing model is also an enrollment strategy. At a lower price point, the university will be able to help its students earn more credits, be more successful, and complete their bachelor’s or master’s degrees.
“And we believe more students will want to participate,” Roger said.
Next Steps for Solving Your Part-Time Student Price Penalty
“One of the things that we’ve done is not only look at the tuition, but look across the board at all the things we do,” Roger said.
Their team at SUU asks hard questions such as: What classes do we offer? How do we offer those classes? What services do we provide? What are we doing on campus that gives us our great culture and our traditions? How do we transport that to our online students and give them the same experiences that our traditional students are receiving?
“Pricing is one of those pieces that we felt was inequitable for our online students,” Roger said, “but it’s a lot more than that. We needed to look at every piece in every experience they have.”
At SUU, Roger and his colleagues have streamlined the application process. They provided academic advisors specifically to the online students. They’ve created additional programs and learning platforms, and they’ve helped train the faculty so that the professors understand who an online student is and what they may be experiencing. It can be eye-opening to learn why nontraditional students are coming back to school and what they’re looking for as they seek to complete their degrees.
“I would recommend to any institution wanting to improve their online experience to look at every piece of it,” Roger said. “How can you improve it, and how you can cater that experience to the online student?”
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