Sizing up the tuition competition

Two documents displayed at the Mar. 28 Faculty Senate meeting are helping shed a different light on Butler University’s tuition increase for the next academic year.

The documents provide a list of 25 schools Butler most often competes with for potential students, or the most common cross-applicant schools.

One compares tuition and monetary costs of attending those universities versus those for attending Butler while the other looks at how many students Butler wins from and loses to those 25 schools during the application process.

Bruce Arick, vice president for finance, presented the documents at the meeting.

Arick said this information is compiled to help assess how Butler officials should adjust tuition each school year.

 

Looking at the books

 

According to one document, each Butler student is paying $33,138 in tuition and fees for the 2012-13 school year. When that figure is compared to the tuition statistics from Butler’s 25 most common cross-application schools, Butler’s tuition ranks ninth highest.

“We feel pretty comfortable there,” Arick said. “We’re not trying to proactively move up or move down (the list).

“If we were to move down, would that be a bad thing? No, not necessarily.”

Of the 10 schools Butler has the most cross-applications with, only three—DePauw University, University of Dayton and Marquette University—have higher tuition than Buter this academic year.

Dayton’s and Marquette’s 2012-13 tuitions, however, are within just a few hundred dollars of Butler’s—and it has been that way for several years.

Arick said this statistic is merely a coincidence.

“We don’t work with those two schools to plan (tuition increases),” Arick said. “We don’t know what they’re going to with their tuition increases until they actually announce them.”

But Arick also said Butler officials use cross-application information to better understand which schools they’re competing against for students and how Butler compares to those universities price-wise.

“We overlay (the documents) to say, ‘Okay, we kind of know who our top 25 are and how we’re competing. How are we price-wise with these schools, from the sticker price?’” Arick said. “Between the two (documents) is really a pretty good approach for us to consider what we should do tuition-wise for the upcoming year to compete with the schools we compete for students with.”

 

Tuition based on class size

 

Arick said another major factor under consideration each year is if Butler is meeting its target class. He described not meeting a target class as “a big red flag for schools and their pricing strategy.”

Butler’s target for this year was 1,000, which was surpassed by 111 students. Since Butler has been hitting its target freshman classes consistently in recent years, officials have been able to raise tuition.

That may not be the case at other schools, Arick said.

“Interestingly enough, if you look at some of the schools that have announced very low price increases or zero (increase)—and I would not put Purdue in that category—it would not surprise me if you found they’re not hitting their enrollment targets,” Arick said. “It’s a significant variable, especially at private schools.”

Many of Butler’s top 25 cross-application schools have steadily raised tuition year after year since the 2007-08 school year. In fact, of Butler’s top 10 cross-application schools, only Miami University of Ohio has had any sort of tuition freeze in that timeframe.

Butler’s main competitors in that top 10 have been Indiana University and Purdue University.

 

Competing against the freeze

 

Indiana has maintained the top spot in number of cross-applications with Butler since 2004. Purdue has held the second spot on that list since 2004.

Butler and Indiana shared 1,387 applicants in 2012. Of that number, 19 percent ended up enrolling at Butler, 28 percent at Indiana and 53 percent at a third school.

Butler wins over a few more students when it comes to competing with Purdue, gaining 21 percent of the cross-applicants between the schools.

One reason some students, specifically in-state ones, choose Indiana or Purdue over Butler is lower tuition.

“If you were to look purely at cost, especially if you look only at the sticker price, there’s no comparison,” said Tom Weede, vice president for enrollment management. “What we try to do is make sure we talk about more than just cost and the value that comes out of a Butler education.”

Weede said Butler’s ability to offer students more financial aid is one way in which it attracts some cross-applicants. He said the school is putting $54 million toward financial aid for the 2013-14 school year.

 

More for the money

 

For out-of-state students, Arick said Indiana’s and Purdue’s tuition prices are far more comparable to Butler’s.

For example, in the 2009-10 academic year, Indiana’s in-state tuition was $8,613. However, out-of-state tuition was set at $26,160, a figure that didn’t leave such a wide gap in tuition between Indiana and Butler.

“We love going head to head with Purdue and IU on out-of-state students,” Arick said. “The price point is not as big of a variable for those students.”

Weede said Butler’s admissions office works hard to help potential students and their parents look beyond the hit their pocketbooks could take if they choose Butler.

Weede said he thinks Butler’s on-campus environment is something that draws many students who also apply to schools like Indiana or Purdue.

“One of the things I think is great about Butler is people like being here,” Weede said. “The classes are smaller, and the relationships with faculty members are more personal.”

 

State of the economy

 

Arick and Weede said Butler officials have to contend with the economy when considering tuition increases.

Arick said he believes the days of Butler raising tuition by more than 4 percent from year to year are limited.

“We can’t ignore general economic conditions that our students and families are subject to,” Arick said. “It’s a balance we have to maintain.”

Weede said he always remembers a discussion he had with a guidance counselor while working in Carroll College’s admissions office when thinking about tuition increases.

“He had a daughter enrolled in the school, and he said this with love: ‘I think you people sit around and say it’s only 4 percent. For me, it’s $1,000,’” Weede said. “I’ve tried to never lose sight of that.”

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