Are Colleges Trying to Fix the Cost of Tuition?

The Washington Post reported yesterday about a move backed by the National Association of Independent Colleges and Universities (NAICU) to change federal anti-trust laws to allow colleges to consult each other about the cost of tuition, a move they claim would lower rates across the country.

Are Colleges Trying to Fix the Cost of Tuition?

The Washington Post reported yesterday about a move backed by the National Association of Independent Colleges and Universities (NAICU) to change federal anti-trust laws to allow colleges to consult each other about the cost of tuition, a move they claim would lower rates across the country.

The article reports that colleges, as recently as the 1990's, spoke with each other about cost and how much financial aid to offer individual students who applied to more than one of them.

As stated in the Washington Post: "As many as 150 schools belonged to 24 groups that met to compare notes in this way, according to the advocacy organization Institute for College Access and Success. Then, in 1991, the Justice Department brought charges of price-fixing against the most prominent of these, the Ivy Overlap Group, which included the Ivy League institutions and Massachusetts Institute of Technology. The Ivy League schools quickly settled, and the practice largely ended.

I talked to Prudent Money Contributor and College Admissions expert John Hupalo about this on the radio this past week. He agreed. This looks like the attempt to control prices on the way down. Let's face the fact - The big universities who are charging 50 to 60,000 plus a year are threatened by the competition from cheaper avenues of education. They fear that they are going to lose control as they are forced to lower tuition to compete. Thus they might as well try to coordinate an organized price decline versus a free fall in the price of a college education.

If not, then why don't they go ahead and lower prices and let the free market work?

These expensive colleges could start to find themselves with a problem. Students and parents are getting smarter about the money they are willing to spend.

Be smart when shopping for colleges. It's a buyers market if you know what to look for in education. Great points here, and real-world competition will lead to greater outcomes. Higher Education can provide great value but improving the offerings is always on the table.

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@InviteEducation I hope that readers will take your advice to heart. You are so right. It is a buyers market and I don't think most people realize it!

Our higher education system should be more like that of European countries. The government should invest more money in colleges and universities across the country, which would help lower the cost of tuition and minimize the crippling student debt that is a huge financial burden on recent grads.

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@Seattlegirl12 there are probably some creative solutions. Marketplace competition is starting to lower the costs. The challenge is that our government is full of politicians. What are the chances of them getting it right when the politics get in the way. After all, they allowed it to this out of control with both tuition rates and student loan debt. Student loan debt wasn't nearly as bad until they shut private lending out of the debt game and they took it over.

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