This is a guest post from Joel Peck, CPA, and Founder of GettingMoneyForCollege.com.
The Myth of College Pricing
We are consumers in a consumer-driven market.
And knowing how to negotiate really works.
Walk onto the lot of a car dealership and these negotiation skills will come in handy. It’s common knowledge that you shouldn’t pay sticker price for that car; you can always walk away if the price is not right.
So why do so many people accept college sticker price? One of the most perplexing myths I have come across is that college tuition is non-negotiable. There is a sense that “you can’t truly gauge the value of an education” and “education is not some sort of traditional commodity that you can haggle over”—essentially, there’s a prevailing view that higher education is somehow immune to and above the bargaining mentality of other products.
This could not be farther from the truth.
This piece from “Good Morning America” highlights one of our clients and their negotiation success story. There are many more stories like this.
Competition Amongst Colleges Breeds Choice, Tuition Discounts
In the mid-1970s, colleges realized the increasing power of choice that parents and students possessed and began offering discretionary tuition discounts in response (aka negotiated tuition).
Today, the competition at colleges is more intense than ever. I am NOT talking about students competing to be admitted. I AM referring to colleges competing with each other.
For example, in the last six months, traditional colleges and universities are feeling intense competition from online universities and Massive Open Online Courses (MOOCs). Ten years ago, the successful online universities were punchlines of jokes. They are now legitimate universities conferring legitimate degrees that employers accept. Their popularity is so significant that many brick and mortar colleges have begun adding online degrees.
Each college needs to fill every space in its freshman class because an empty desk or empty bed represents money that is lost. The forward-looking colleges are already partnering with technology companies to improve their online courses and explore how to make money from this.
In the near future, it is likely that many of the large introductory lectures will be moved online permanently for efficiency. After all, how personal is the connection with a professor when you are seated three rows from the back of a large lecture hall?
All of this creates more competition—COLLEGES COMPETING for students and tuition dollars.
Why Isn’t Everyone Trying to Negotiate Their Tuition?
Well, some families just don’t know they can or are overwhelmed by the whole process.
There are many families who DO try and engage in the negotiation process. The problem? Not many people know how to do it SUCCESSFULLY.
So much of the negotiation process is just knowing and following the procedure set out by each specific school. The other big part is finding out what the school values—what does the school need? And how can your student meet that need?
Find out how to negotiate successfully by requesting a complimentary consulting session at www.GettingMoneyForCollege.com.
Need more info before scheduling a consultation? Watch our on-demand webinar on negotiating college tuition.
For many families, the high cost of higher education is a daunting proposition. The College Funding Coach is here to help. To learn more about paying for college while saving for retirement, register for one of our free workshops/webinars or speak with a coach to get started on your college funding journey.