Ten years later, GW’s once-radical tuition plan now commonplace but comes with costs

Media Credit: Sam Johnson | Hatchet Photographer

Former University President Stephen Joel Trachtenberg implemented the fixed tuition policy 10 years ago, while also hiking tuition by 16 percent. Since then, more than 300 colleges have adopted fixed-price policies.

Media Credit: Sam Johnson | Hatchet Photographer
Former University President Stephen Joel Trachtenberg implemented the fixed tuition policy 10 years ago, while also hiking tuition by 16 percent. Since then, more than 300 colleges have adopted fixed-price policies.

Ten years ago, GW’s chief financial officer tried to sell a policy to University leaders that no top college had ever tried: keep tuition the same for returning students.

But at a university that relies heavily on students’ tuition checks to stay in business, Executive Vice President and Treasurer Lou Katz had to ease trustees’ concerns about how a fixed-tuition policy would hold up against doomsday scenarios like hyperinflation.

“They thought we were a little crazy when we did it,” Katz said. “Everybody was scared.”

Since GW became the most notable college to institute fixed tuition a decade ago – raising tuition 16 percent that year, too – administrators across the University say the move has paid huge dividends by easing prospective students’ and families’ financial fears.

But it’s also cost GW big over 10 years. While the exact amount of forfeited tuition dollars depends on a mix of variables underneath the University’s closed financial books, the losses likely total in the tens of millions.

University President Steven Knapp, whose administration decided to continue the policy when he arrived in 2007, said the costs have been worth it, helping attract applicants who might otherwise have written off the now more-than-$60,000-a-year school.

“It’s been important to our recruitment, particularly of low-income students,” Knapp said. “It is expensive, but it’s just another way of supporting families. You could also raise tuition and then take student aid out of tuition, but we’re trying to avoid doing that.”

Experts also say GW’s move to fix tuition was bold at the time, but hundreds more schools have followed suit as college costs have come under increased scrutiny.

About 320 schools offered fixed tuition last academic year, according to U.S. Department of Education data, or about 7 percent of all colleges nationwide where students receive federal financial aid.

Richard Vedder, the director of the Center for College Affordability and Productivity, said while the policy helps take some uncertainty out of the process when families plan for college, it is far from a cure-all.

“I thought then and I still think it’s an innovative idea. It’s a good idea,” Vedder said. “It doesn’t solve the problem of the high cost of college, but it’s a nice move.”

Even former University President Stephen Joel Trachtenberg, who implemented the policy in 2004, said the policy may have lost its allure.

By ruling out tuition increases for returning students, the University has less financial flexibility than peer institutions, and the policy has failed to completely shake off GW’s reputation as a school for wealthy students.

Trachtenberg said GW should consider reviewing the policy and whether it still benefits the institution.

“It may well be that it’s run its course, and [it’s] probably worth taking a look at to see if it ought to be continued or if some new innovation ought to be sought,” Trachtenberg said. “What you don’t want to do is have a good idea and then fall asleep on it.”

Bob Chernak, who oversaw GW’s enrollment as senior vice president for Student and Academic Support Services, said it’s tough to say whether the policy would ever be reconsidered.

“A lot of it will depend on the kind of budget pressure the University has going forward,” said Chernak, who served as Trachtenberg’s second-in-command for most of his tenure and retired in 2012. “A lot will depend on fundraising, whether or not GW is successful in meeting its ambitious fundraising goals.”

Battling an image problem
Knapp said when he came to GW in 2007, he aimed to keep the fixed-tuition policy in place while moderating annual tuition increases and finding donations to boost the financial aid pool.

He said the policy brings down the overall cost of a GW degree, he added, but this perk is often lost in translation when parents only look at the cost of a student’s first year.

The University’s tuition price may be one of the highest in the country, but the fixed tuition policy means students have to borrow less to pay for all four years. Still, GW students graduated with about $33,000 in debt on average in 2012, higher than the national average.

Administrators say the fixed-tuition policy has combated an image problem that the University has held onto since it became the first college to surpass $50,000 in 2007.

Nearly every admitted student said in a survey last year that they were familiar with the policy, GW’s enrollment manager Laurie Koehler said. She said that price plan was more likely to influence students to apply or enroll if they were the first in their families to attend college.

“You throw a lot of information at families as they’re going through this process, and that clearly sticks, because families care about being able to plan a budget over the course of their son or daughter’s four years at college,” said Koehler, the senior associate provost for enrollment management.

Trachtenberg said his administration faced skepticism from trustees and faculty, who thought a tuition guarantee was “radical.” If inflation kicked up, the University would not be able to make adjustments to tuition to compensate.

It also meant the University would need to increase tuition by 16 percent before freezing it, though it has kept those hikes to about 3 percent for nearly every incoming class since then.

“People were concerned that we would be too aggressive and the tuition bill would be upsetting and would frighten students off,” Trachtenberg said. “Ultimately, they trusted us. They made a leap of faith, and it turned out, as I say, to be remarkably innovative.”

– Avery Anapol, Cory Weinberg and Sarah Ferris contributed reporting

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