A Marketplace in Confusion

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Published by Inside Higher Ed

New York’s freshly signed free public tuition program puts the squeeze on many of the state’s weakest private colleges and universities.

Private college presidents know it. But most aren’t yet sure what to do about it.

Those presidents reacted with a mix of dismay, confusion, criticism and, in some cases, resolve in the days after New York leaders struck a deal to start a tuition-free public college program this fall. The creation of a program in New York caps a winding and unexpected path for the free-college idea, which New York Governor Andrew Cuomo proposed early this year after it appeared to have died with Hillary Clinton’s presidential bid. Cuomo held a ceremonial bill signing for the program Wednesday, which Clinton attended.

The program, called the Excelsior Scholarship, will allow New York residents from families earning up to $125,000 per year to attend the state’s public community colleges and four-year colleges without paying tuition. It will go into effect this fall for students who are newly enrolling at institutions in the State University of New York and City University of New York systems and who come from families with incomes of up to $100,000 per year. The income limit will jump to $110,000 in fall 2018 and $125,000 in 2019. Cuomo’s office estimates that about 940,000 families in the state will be eligible at that point.

The program poses a significant challenge for New York’s many small private institutions, which suddenly find themselves facing a new kind of competition and increasing inter-sector warfare in the state. The pressure will be highest on tuition-dependent colleges and universities that already compete for students in part by heavily discounting their tuition and that draw most of their students from inside the state. More prestigious colleges and universities, which pull in more students from out of state and are more selective in their admissions, are less likely to feel a major pinch.


Experts said that in the short term, the discussion is likely to keep coming back to the idea of price.

“The challenge for private institutions is that all of this media is out there touting free tuition,” said Craig Goebel, a principal at the Baltimore-based strategy consulting firm Art & Science Group. “My fear for the private institutions is that even students who won’t be eligible for this program will be swayed to pursue public education on a misunderstanding of what’s going on.”

Private colleges might have to take their evaluation of price beyond tuition discounting.


“Institutions that are relying on big discounts and financial aid to enroll a class, they’re going to be in trouble,” said Rick Hesel, a principal at Art & Science. “The ones that have a strong, differentiated position based on substance, on the student experience, will be better off.”

Another Art & Science principal, David Strauss, warned college presidents against falling into the trap of thinking they can simply do a better job of marketing themselves. They need to take a real look at their missions and how they can strengthen them, he said.

“Acting on a cosmetic level, where we figure out how to communicate a bit better, aid a bit better, recruit a bit better, is unlikely to create real competitive balance for the institutions that will be challenged by this move,” Strauss said.

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