A number of U.S. colleges and universities have implemented a pricing strategy known as differential tuition, charging students more for high-demand, resource-intensive programs such as engineering, nursing, business, and computer science. While proponents of the approach say it increases program sustainability and allows institutions to hold down costs for students in other majors, others have questioned whether it reduces low-income students’ access to certain majors that lead to better-paying jobs, Inside Higher Ed reports. In addition, differential tuition models can vary significantly across institutions—and in some cases don’t kick in until students take major-specific upper-level courses—making it difficult for affected students to accurately estimate their college costs.
More precise pricing, but at what cost?
Differential tuition pricing—which has been in existence since at least the 1970s—takes many forms. In Nevada, students may be charged anywhere from an extra $15 to $800 per credit for certain areas of study, depending on their program and institution. Colleges often use the additional revenue to develop more classes, expand lab facilities, hire new faculty and advisors, and offer tutoring and career services.
However, some observers have voiced concerns that the model may prohibit lower-income students from pursuing certain majors with higher costs, especially those that lead to careers with greater earnings potential.
“First-generation students, students of color, students with not a lot of social capital look at the sticker price, and sometimes that dissuades them from enrolling, and that leads to an impact on student choice,” Scott Jenkins, a trustee at Illinois State University (ISU) and strategy director for state policy at the Lumina Foundation, said at a meeting in which ISU debated—and ultimately adopted—a differential tuition policy, Inside Higher Ed reports. “Specific majors being more expensive may cause students to enroll in different majors instead of challenging themselves and enrolling in those programs they could be successful in, simply over price,” he added.
Related: Are differential-tuition policies deterring low-income students from certain majors? >
There is no publicly available data to determine if differential tuition practices deter low-income students from costly majors. However, a single-institution sample did show that Pell-eligible students were less likely to enroll in higher-cost majors than one at a lower price point, according to Casey E. George, an associate professor of higher education administration at the University of Louisville who studies how public research universities implement differential tuition.
A push for greater cost transparency
Further complicating matters, some colleges do not explicitly inform students about their differential tuition policies and how they implement them. While some schools use sliding fees, others charge more per credit hour for certain courses, and University of Missouri-Columbia (Mizzou) uses a tier system of least- to most-expensive. Unless students know exactly which classes they will take each semester, they may be unaware of their true net college costs, potentially making tuition an unpleasant surprise.
“Institutions can do a much better job being much more transparent about it and making sure prospective families have the information up front,” says George, who, along with her team, found that high-income students had a better understanding of differential tuition than their low-income counterparts.
Several institutions, such as Mizzou and ISU, are working to inform students and their families about differential tuition policies through press releases, social media posts, meetings with students and their families, newsletters, and, for Mizzou, the introduction of new net price calculators. To make the practice more equitable, some schools are also putting that additional revenue toward scholarships. ISU, which will implement its differential tuition policy for the 2024-25 academic year, says 25% of its revenue from differential tuition increases will go toward financial aid.
“I can tell you that the parents I have spoken with have greatly appreciated the ease of understanding what tuition would cost them,” says Christian Basi, director of public affairs for Mizzou, Inside Higher Ed reports.