(from Inside Higher Ed) In 2013, the University of Dayton started a new fixed net-price tuition plan, promising most students that their financial aid packages would rise in lockstep with any increases in tuition sticker prices over four years -- keeping steady the effective price students pay. Four years later, the graduation rate for the class of 2017 jumped eight percentage points, hitting a record 67 percent. Student borrowing dropped by more than 22 percent overall, with the average four-year graduate borrowing$5,000 less than previous graduates who hadn't been part of the fixed net-price plan.
Fixed-tuition plans tend to shift some financial risk from students to a college or university. As a result, they’re easier to put in place -- and keep in place -- at wealthy private institutions. Smaller colleges with lower endowments and public universities with more reliance on unpredictable state funding can find it harder to create programs or make them effective.
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