Schools try radical ways to help students pay for college

Across-the-board tuition cuts, loan caps, and even 'free rides' for those most in need are among the strategies.

from the April 30, 2007 edition

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Cambridge, Mass. - Amid the climate of skyrocketing college tuitions and convoluted aid programs, a handful of universities are introducing simple and transparent financial aid programs. Among them: across-the-board tuition cuts, loan caps, and completely eliminating tuition for some.

Tuition cuts of up to 50 percent are the simplest form of financial aid to understand – and the hardest to believe. Yet in the last 10 years, at least 19 schools have cut tuition dramatically. Among them: the University of South Dakota (USD) slashed out-of-state tuition by 50 percent in 2006; North Park University in Chicago lowered tuition by 30 percent in 2005; and Bethany College in West Virginia dropped tuition by 42 percent in 2002.

"They're really changing their pricing model," says Melanie Corrigan associate director of national initiatives for the American Council of Education. "In many cases, they've cut their published tuitions, but it's important to remember that a smaller percentage of students actually pay that published tuition." In other words, few students pay full price.

Applying for college financial aid has become more complicated than filing a tax return, says Cornell University professor Ronald Ehrenberg, director of the Cornell Higher Education Research Institute.

To make matters worse, students may need financial aid now more than ever. Tuition increases at nearly double the rate of inflation, and "sticker prices" in excess of $50,000 can discourage prospective students before they even apply.

Adding yet another layer of confusion, Sallie Mae and several other major banks responsible for providing student loans have been accused of bribing universities to enlist their services instead of lower-interest federal loan programs.

On average, students at private universities get $9,000 a year in grants and tax breaks, while students at their public counterparts receive $3,100 a year, according to a 2006 College Board report.

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