Listed tuition price cut 32% in bid to boost enrollment

BY PHYLISHA DRAYTON
VN CO-EDITOR

The University of Detroit Mercy last month announced plans to slash its published tuition price from $41,158 to $28,000 beginning next fall as part of a marketing strategy to boost enrollment.

The average amount most full-time undergrad students pay – between $16,000 and $20,000 per year after financial aid – will not change. And the net revenue Detroit Mercy makes off each student will also remain even (as the tuition price falls, the university won’t have to provide as much financial aid, so costs will stay the same).

So why change the list price?

By lowering it to 2008 levels, university officials hope to entice potential freshmen and stop sophomores, juniors and seniors from bolting for larger public universities like Michigan and Michigan State, which charge significantly smaller amounts.

 “A $41,000 price tag is not competitive at all,” Deborah Stieffel, vice president of enrollment management and student affairs, told The Varsity News. “Many times with students, we can’t even get their attention.”

Over a three-year period, UDM says it loses about 500 students to UM, MSU and Wayne State.

University officials are confident in Detroit Mercy’s ability to compete academically, but it just needs the students to give it a chance.

“You get more students to look at you as the result of incentives like this,” President Antoine Garibaldi told The VN. “Doing it right will bring in a lot of students who will take a look at us who might never have taken a look at us before.”

The announcement comes on the heels of Garibaldi’s first overall enrollment increase since he became the university’s president in 2011.

Overall numbers had fallen in each of his first five years, although freshmen enrollment has increased each of the past three years.

Garibaldi hopes the tuition reset will spur further gains, and predicts freshmen enrollment will hit 600 in 2018, up from 554 this year. Overall, he’s looking to add roughly 500 total undergrad students over the next five years.

The university put a lot of time and research into the tuition reset.

The process started two years ago, as it began interviewing almost 500 prospective students and 320 sets of parents, talking with a national consultant and reaching out to local schools, high school presidents and superintendents.

And what they found was that by lowering the list price to precisely $28,000, the university could generate the same net tuition revenue as having the tuition price at $41,000.

This means that the university was not making any more money at $41,000 than they would be at $28,000.

That’s because Detroit Mercy, like other private universities, works off a high tuition, high aid system, where large amounts of financial aid is handed out help to balance students’ cost.

But as tuition went up each year (Garibaldi has lowered the increase rate from about 6 percent each year to 3 percent), the university was also forced to up the amount of financial aid it offered.

So even though it was charging more, it wasn’t making any more money.

“We couldn’t keep up with the amount of aid students needed,” Stieffel said. “As you get greater and greater tuition costs, your federal dollars only go so far, and those haven’t increased tremendously.”

Garibaldi said the university is trying to attract a high number of first-generation college students, and a tuition reset may be a big draw for them.

“When you’re talking about one-third of our student population being first-generation college students, you’re talking about a large sum of students whose families really don’t have the resources in order to be able to go to private college, let alone any other college,” he said.

Once admitted, the university is confident that it can keep them. It currently has an 86 percent retention rate.

“When students come here, they like what they see,” Stieffel said. “Getting their attention is half the battle.”