(from the James G. Martin Center):

By Alex Contarino

As higher education has become increasingly competitive in recent years, many colleges have had to find creative ways to maintain their enrollment figures and distinguish themselves in the market. For some, this has meant lowering their tuition rates at a time in which inflated prices often seem to be the norm.

Seeing already-struggling colleges constraining their revenue sources, however, has some observers raising alarm about these institutions’ alleged lack of long-term solvency. But tuition rates are often a poor indicator of what students pay and what colleges receive in revenue. Higher education accounting is complicated by many factors—including financial aid—and university finance is not as black and white as the tuition bill.

Contrary to some analysts’ claims, struggling colleges that reduce tuition rates are not signing their own death certificate. Rather, they are enhancing their competitiveness, which in turn is reaping benefits for students and parents. CONTINUE READING HERE