Evaluate Susan’s analysis and recommendation.
The case study asks to approach this as a consultant recruited by the President of a liberal arts college in the East and you are working with Admission Director, Susan Hansen, she needs to increase tuition from $15,000 (after financial aid) to $25,000 a year. Besides, she needs to decrease the amount of financial aid accessible to students. She believes that by increasing the tuition, the college will be able “to enroll 600 new students (of equivalent or better quality)” (Brickley, Smith and Zimmerman, 2015) contrasted with the next year where 400 new students were enrolled.
To begin with, here is a summary of the data collected in the case study when it comes to tuition costs. According to the case study, the Board of Ursinus raised its tuition and fees by 17.6 percent to $23,460 and got 200 a greater number of applications than the earlier year. That the school president concluded that the applicant presumed that if the college cost more if must be better. The case study additionally uncovered that different schools that raised prices saw an expansion in their applications also. Then again, North Carolina Wesleyan College brought down their tuition and fee ten years prior by 22 percent and observed a decrease in the application and pulled in hardly any students. Their president inferred that “people don’t want cheap.” (Brickley, Smith and Zimmerman, 2015).
As a consultant, I would advise Susan to make an increase in tuition however not to diminish financial aid. The investigations that were done for this case study concentrated on tuition and fee only. The study mentions Notre Dame, Bryn Mawr College, Rice University, and the University of Richmond. Three of these are private schools and one is a state school. Even though the tuition is higher at these schools and keeps on rising each year they offer financial aid to their students. For example, 75% of Notre Dame students receive financial aid making it progressively moderate to go to the prestigious school. Bryn Mawr students get 63% on need-based alone and a sum of 77% of students receive financial aid. Rice University gets just 37% with regards to financial aid and concerning the University of Richmond since it is a state school with regards to need-based students who qualify receives 100% financial aid in any case 40% of non-need base students get help also. The one thing that these school share for all intents and purpose is a high financial aid package that is offered to their need and non-need based students.
No doubt raising the cost will help tackle the school’s financial problems. In any case, if Susan attempts to raise the tuition and fee to $25,000 quite possibly the school won’t get the same number of applicants as they have to select 600 students to make the 15 million per year they will get in all out that she assessed for the case study. However, when it comes to financial aid the rule is 90/10. No more than 90% of your total population of students can receive financial aid money. The ten percent has to use other means such as veteran benefits, tuition reimbursement from work, cash, or private loans.
In conclusion, Susan can still raise the tuition and fees to $25,000 as planned and if she sticks to the trend of the other private school in the study when it came to about 75% of their students receiving financial aid which the state will pay the majority of the need-based financial aid the school will be able to compete with other liberal arts school and get out of debt as well as bring in better student all as the director planned.
References
Brickley, Smith & Zimmerman. (2015). Demand. New York: McGraw-Hill Education.
Class Profile. (2017, 01 22). Retrieved from Bryn Mawr College: https://www.brynmawr.edu/admissions/class-profile
Financial Aid. (2017, 01 22). Retrieved from University of Richmond: http://financialaid.richmond.edu/
Financial Aid. (2017, 01 22). Retrieved from Rice University: https://financialaid.rice.edu
Office of Financial Aid. (2017, 01 22). Retrieved from Notre Dame: financialaid.nd.edu/