Differential Pricing of Undergraduate Education.
A resurgence of interest in costly scientific and technical curricula, shifts in the size and mix of the college population, and mounting financial pressures are combining to encourage colleges and universities to reevaluate their undergraduate pricing practices. Already, an increasing number of institutions are imposing midyear tuition increases, raising service fees, adding course surcharges, indexing tuition rates to costs, and instituting price differentials on a selective basis. The pace of such change seems likely to accelerate as financial shortfalls and competitive pressures become more severe [10]. Because differential pricing of undergraduate tuition provides a mechanism for securing much needed revenue with relatively controlled risks to enrollment, it is gaining support among some state systems and in a few large private universities. One reason for interest in differential pricing is that institutions facing an expansion of enrollment in expensive scientific and technical curricula, often coupled with dwindling enrollment in the humanities and social sciences, are less able to use price averaging to cushion mounting costs. If a university raises its general undergraduate tuition rates either significantly above its current rates or significantly above the rates of its competitors, it risks inducing an unevenly distributed depression of its enrollment. Students in low-demand fields or in programs of marginal quality are likely to be especially sensitive to price increases,