The Lawlor Review

Concordia St. Paul Embraces "Perception Is Reality" for Many Families

Like most private institutions, Concordia University, St. Paul (Minnesota) is acutely aware that sticker price is a big hurdle in today’s college marketplace—and that the hurdle has become more like an obstacle for families in recent years. 

“Six years ago, we conducted price sensitivity research and found that people were making decisions in their college search based on their assumptions that Concordia was too expensive,” says Kristin Vogel, director of undergraduate admissions. Even though the majority of Concordia students receive substantial discounts on their tuition, too many prospects never even made it to the stage when they could discover the reality of what their net cost would be, because they were stopped by the perception of unaffordability created by Concordia’s sticker price.

When the University repeated the same study a year ago, the results showed the gap (between what prospective students expected they would need to pay and what their actual net cost would be) was even wider.

“Every year it was a bigger and bigger challenge for us to get those individuals to even consider us,” says Eric LaMott, senior vice president and chief operating officer. “The high discount wasn’t fixing the problem, because they didn’t even look.”

So Concordia’s leadership decided to do something that would bring families’ price assumptions closer to reality: It approved a $10,000 tuition reduction for all new and returning undergraduate students beginning in fall of 2013. This 33 percent drop, from $29,700 to $19,700, effectively “reset” tuition to what it was a decade ago—and in the process, reset families’ perceptions of whether or not they could afford Concordia.

Vogel explains that because the University has had a history of being fiscally conservative, steady revenue streams from degree-completion and graduate programs, and solid enrollment numbers for its traditional undergraduate programs, “we had the operating capacity to move from a high-tuition/high-discount model to a low-tuition/low-discount model without sacrificing the quality of education or reducing any programs and services.”

Since institutional scholarship and grant amounts will be reduced along with tuition, most students who qualify for need- and merit-based financial aid will find their net cost only slightly improved. But while the reality of actual price changes little for these students, Concordia is betting that changed perceptions will remove an obstacle to finding out about actual price.

Meanwhile, families with higher income can potentially experience a significant drop in their out-of-pocket cost due to the tuition reset—creating more willingness to pay for Concordia’s private Christian college education among those who have the ability to pay.

The reaction to Concordia’s tuition reset announcement has been exceedingly positive, according to Vogel. “Current students and alumni both are very proud of their institution for responding to the marketplace,” she says. “We are excited about talking to more prospective students who might find Concordia isn’t just their ‘best fit’ college, but their ‘financial first choice,’ too.”