SAINT PAUL, Minn. — You have likely heard the phrase ‘that's how the game is played’ a time or two in your life. Well, in the world of private universities, high sticker prices and deep discounts are how the game is played.
"We decided to bring that down and quit playing the game,” Bethel University President Ross Allen said.
Starting in the Fall of 2025 the cost of tuition at Bethel University will be lowered to $25,990 a year, down from the current sticker price of $44,050.
Allen said the current sticker price is inflated by scholarships and discounts, so the tuition reduction next year will be less significant than most people realize.
“The new net price will be very close to what it was before,” Allen said. “The focus of this change is to really solve the lack of transparency with pricing.”
Allen said this trend of high prices and deep discounts started decades ago as a way for universities to charge higher-earning families more and lower-earning families less.
However, Allen argues the discounts are now out of control and some students don’t understand the price they pay is significantly lower than the advertised sticker price.
“There is just so much frustration from parents about the confusion and the complexity. What is the real price? There is a lack of transparency, and we decided to respond to that and just be clear,” Allen explained.
The National Association of College and University Business Officers released a study in May that showed the average tuition discount at private universities nationwide was around 56%.
Chris Wills from College Inside Track said that the discount rate means the actual price students pay is less than half of what universities advertise.
“For the average American family this system is impossible to understand,” Wills said. "What Bethel and others are doing is just being more transparent upfront about what the price actually is."
Wills said the old pricing model was built around psychology and consumer behavior.
“The philosophy was that when something costs more people think it’s better, they value it more, and so people bought into that idea,” Wills explained. “People also really liked the idea of receiving large scholarships to go to school. It’s really fun for a parent to be able to tell your neighbors that your kid got a $20,000 scholarship.”
However, in recent years many private universities have seen lower enrollment as more students are debating whether a college degree is worth the investment.
Wills said a growing number of private universities are deciding to lower their advertised sticker price to be more competitive with public universities.
"Schools have to be doing what Bethel is doing to try and stay relevant in that environment, because it's going to be very difficult for all the schools that we have to keep their doors open if they don't make some changes,” Wills said.