Chris Keane for The New York Times  Betsy Fleming is president of Converse College in Spartanburg, S.C., which is slashing its $29,000 tuition, an amount that had been discounted for most students.  When Converse College, a tiny womenâs college here, announced that it was âresettingâ next yearâs tuition at $16,500, down 43 percent from the current yearâs published price of $29,000, the talk was about affordability, transparency and a better deal for struggling families.  But of Converseâs 700 undergraduates, only a small number â in the single digits, its president said, paid the full sticker price in recent years. Almost everyone received a tuition discount from the college, along with, in many cases, financial aid from the state and federal governments.  Now, like some other small private colleges, Converse is cutting tuition and reducing discounts. Betsy Fleming, Converseâs president, said the tuition discount rate would drop to 25 percent, well below the national average, from the current 56 percent. The college will still offer aid to talented students, but only to the extent covered by its $39 million endowed scholarship funds.  While Converseâs reset was the most drastic, others including Concordia University, St Paul, in Minnesota, Ashland University in Ohio, Ave Maria University in Florida, Belmont Abbey College in North Carolina and Alaska Pacific University in Anchorage, have also recently announced tuition cuts.  For decades, most private college pricing has reflected the Chivas Regal effect â the notion that whether in a Scotch or a school, a higher price indicates higher quality.  âSchools wanted a high tuition on the assumption that families would say that if theyâre charging that high tuition, they must be right up there with the Ivies,â said David L. Warren, president of the National Association of Independent Colleges and Universities. âSo schools would set a high tuition, then discount it. But when the schools in your peer group all have discounts, it becomes an untenable competition for students, with everyone having to increase their discounts.â  At the nationâs most selective institutions, discounts are usually reserved for low- and middle-income students, and a third to a half of students pay the full sticker price. But colleges without a national reputation pass out discounts, in the form of aid, with a free hand â and not just to needy students.  âAbout a quarter of students at independent colleges are full-pay, and at institutions with small endowments and small name recognition, itâs single-digit,â Mr. Warren said.  Over all, private colleges discounted freshman tuition by 45 percent last year, a new high, according to a survey by the National Association of College and University Business Officers, and the share of freshmen getting institutional aid rose to 87 percent last year, from 80 percent in 2002, also a new high.  For all but the top-tier private colleges, these are tough times. Enrollment is flat or declining in many parts of the country. In November, Moodyâs issued a report finding that more than 40 percent of colleges and universities face falling or stagnant tuition revenue. With family incomes stalled, many bargain-seeking students are drawn to public institutions. And for colleges that are not well known, the race to lure students with big discounts is becoming unsustainable.  As a result, many private colleges are rethinking their pricing â whether cutting or freezing tuition, or locking in the freshman tuition for all four years.  âWhether you in fact make it more affordable with a reset or a freeze is not clear, since net revenues tend to come out about the same,â said Richard Ekman, president of the Council of Independent Colleges. âBut thereâs a public assumption that private higher ed is unaffordable, so anything that gets peopleâs attention and lets you have the conversation explaining that most people donât pay full price, that it is within reach, is very important.â  Sewanee, the University of the South, reduced its overall cost of attendance â tuition, fees, room and board â by 10 percent in 2011 to be more competitive with the public universities elsewhere in Tennessee, and in Georgia.  âWeâre happy with it,â said the vice chancellor, John M. McCardell Jr. âOur applications continue to grow, our selectivity and yield and retention are all improving.â  True, costs have crept back up, almost to the $46,100 pre-cut level, but Sewanee now guarantees that tuition will not increase during a studentâs four years at the college.  With growing sensitivity to tuition increase, such fixed-rate guarantees are becoming more widespread. Just this week, Northland College in Wisconsin became the latest to announce such a step.  Roger Williams University in Rhode Island turned to fixed-rate tuition after some market research.  This article has been revised to reflect the following correction:  Because of an editing error, an article on ThursdayÂ about private colleges that are reducing their tuitions misidentified one college that recently did so. It is Concordia University, St. Paul â in Minnesota; Concordia University in Oregon has not cut its prices.
Many institutions that charge high tuition but also offer steep discounts are rethinking the allure of that model.