How this college plans to cut tuition by 42%

Courtesy of Utica College

President Barack Obama has long harped on the excessive costs of a college education and has introduced policies to combat higher education’s soaring price tag.

At one college, at least, his message on college affordability seems to have gotten through.

Last week, Utica College, a private, four-year school in upstate New York with an undergraduate enrollment of 2,900, announced that tuition and fees for on-campus undergraduates would total $19,996 for its 2016-2017 school year—a 42% reduction from the $34,466 it’s charging this year.

“Our tuition—like many colleges across country—kept creeping up and out of range for families,” Todd Hutton, Utica’s president, told Fortune. “We saw that in students not looking at us and people struggling to stay.”

Hutton says that, despite its soaring cost, the college has seen 15 straight years of record total enrollment, and the academic caliber of its students has also improved. “This was the opposite of a desperation move,” he says. Instead, the tuition cut was about returning to the institution’s original mission to “serve people of modest means.”

Utica College’s history stretches back to 1930, when Syracuse University introduced extension courses in the area after business and community leaders saw the need for higher education in the region. “We were created to serve the working people of the Mohawk Valley,” Hutton says.

But, like other four-year private schools across the country, Utica College has been plagued by skyrocketing tuition costs in recent years. Students paid $20,270 in tuition and fees in 2003; the $34,500 Utica charged this school year represents a 70% jump from that figure. Nationwide, tuition at private, four-year schools surged 24% from 2004 to 2014.



Hutton attributes Utica’s ballooning expenses in part to health care costs—premiums at the college increased by 28% this year over last—and library expenses, which are growing between 11% and 15% annually. But the huge reduction in tuition planned for next year is not supposed to touch either of those budget line items. The tuition “reset” is part of a larger effort to decrease structural costs without cutting quality, Hutton says. “We’re not cutting our budget at all and we’re going to give 2-3% [raises] to faculty.”

To outsiders, that promise may seem too good to be true, but Hutton stands by it. He says the university will cover the first year of tuition cuts—worth about $2 million—with its cash flow from operations. That will sustain the college for a year, as it rolls out what Hutton describes as a “new normal.”

Hutton’s plan begins with bringing in a larger freshman class, which Utica hopes to attract by touting the college’s value. Utica has historically welcomed a freshman class in the 480 to 570 range. It hit a record 645 first-year students for its 2015-2016 school year. Going forward, it’s aiming to welcome freshman classes between 625 and 650 students. The college also wants to increase its enrollment in its online classes. The majority of its online students are in graduate programs and they will not be affected by the tuition reduction. Utica currently has 1,800 online students. Over the next five or six years, it wants that figure to grow to 3,800.

The college will also save money by lowering what it gives out in merit scholarship. Its current top award of $21,000 would surpass the total cost of tuition next year.

The tuition cuts will apply to all on-campus Utica students and there’s hope that the increased affordability of its degrees will reduce its dropout rate, which will give a boost to the size of Utica’s overall student body and, subsequently, its tuition revenue. Right now, only 47% of Utica freshman end up graduating—a rate that’s just above the national average, according to data from the federal government’s recently released College Scorecard database. “The vast majority of students leave for one reason—finances,” Hutton says. “They arrive on a hope and a prayer. They plan for their first year and then they hit a wall.”

That wall is not necessarily $10,000 or $15,000, says Jeffery Gates, Utica’s vice president of student affairs and enrollment management. “It could be $2,000,” he says. In theory, the reduced tuition will make those financial hurdles easier to clear, if not eliminate them altogether.

Hutton says the tuition cut ultimately aims to reduce students’ loans. The average graduate leaves Utica College with $25,000 in debt, according to government data. “For every family in my mind, investing in education is a positive thing,” he says, but “our students were leaving with too much debt.”

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