Sticker shock: Private colleges in Minnesota near tuition milestone

As tuition rates have climbed, Minnesota's private colleges have struggled to send a message to prospective students and their parents: Don't worry about the sticker price. Most students end up paying a lot less.

But for many families, the price is the first thing they see. And this fall, it's nearing a new milestone: Almost $50,000 a year, on average, for room, board and tuition at Minnesota's private four-year colleges and universities.

Already, eight of those schools have surpassed the $50,000 mark. And two, Carleton and Macalester colleges, are in the mid-$60,000 range, according to the Minnesota Private College Council.

With price tags that are double or triple those of public universities, many private schools say they're spending more than ever on financial aid — effectively slicing tuition in half for the average student.

But even so, sticker shock "is a challenge," admits Paul Cerkvenik, president of the private college council, which represents 17 schools. "We work hard to tell the story that the average family pays a very different price than the published price."

At the University of St. Thomas, more than 90 percent of students get some form of financial aid, according to Al Cotrone, vice president for enrollment. This year, the official cost of tuition ($41,133) and room and board ($10,054) pushed the St. Paul-based university above $50,000 for the first time. But in practice, Cotrone said, the average first-year student will get about $20,000 in scholarships and grants.

"I think there's a psychological aspect to $50,000," he acknowledged. "But I do think people are understanding. ... We have to make sure they know that's not what they're going to have to pay."

Matt Carlson has heard a similar refrain as a counselor at College Possible, which helps low-income and first-generation students get into college. "The initial reaction is, 'Oh, that's a crazy amount of money, how can anybody afford that?' " he said. "We help them figure out that it's not going to cost that much."

Parents, too, are recoiling at the prices.

"People have been telling us: Don't be afraid of private liberal arts colleges, of the sticker price," said Trung Pham, of Eden Prairie, whose teenage daughter was checking out schools at the "Colleges That Change Lives" fair in St. Paul last week. He was skeptical.

"When the sticker price is $60,000 — even if they give you 50 percent off, that's $30,000," he said. "I can't afford that."

Fred Gray, of Woodbury, who has two high school seniors shopping for college, just shook his head when asked about tuition rates. "You're scaring people away," he said.

Cotrone, of St. Thomas, said the price reflects "the value of what it is they're receiving" at a university like his — such as small classes, personal attention from professors, and an alumni network that can help students launch their careers.

But some experts say this financial model — known as "high price, high aid" — is starting to crumble.

Growing numbers of families are rejecting colleges out of hand based on sticker price alone, says John Lawlor of the Lawlor Group, a higher-education marketing firm in Eden Prairie. "The dilemma is that more and more people, even with the ability to pay, are no longer willing to invest beyond a certain price point," he said.

P. Jesse Rine, an outspoken critic of high sticker prices, is even more blunt. "Honestly, I think the phenomenon kind of defies explanation at this point," said Rine, who authored a 2016 essay, "A Shell Game By Any Other Name: The Economics and Rationale behind Tuition Discounting," for the University of Minnesota's Center for Innovative Higher Education. "The scale has gotten so out of whack that you have to say to yourself, are we selling used cars here, or are we providing private higher education?" he said.

Rine, who is assistant provost at Grove City College in Pennsylvania, says that artificially high sticker prices hurt the credibility of many private colleges — as well as their bottom line.

And there are signs that colleges themselves are worried. A survey in May, of private college business officers, found that 41 percent believe the current practice is not sustainable.

A few schools, such as Concordia University in St. Paul, are bucking the trend. In 2013, it slashed its price by a third, or $10,000, and now has the lowest tuition of all private colleges in Minnesota: $21,750.

"It has been extremely successful," said Kristin Vogel, an associate vice president at Concordia. Since the "tuition reset," as she calls it, enrollment has grown every year — and so has tuition revenue.

"We found that this sticker shock was blocking many students from applying," she said. The school also reduced its average financial aid package, from 48 percent to 28 percent of the tuition price. The net result: Both the students and the university came out ahead, she said.

So far, few other schools have followed suit, but more are considering tuition cuts, according to Lawlor, the marketing consultant.