Impact of a Net Price Lock on Graduation Rates and Student Debt
A net price lock can contribute to an increase in college graduation rates and a decrease in student debt.
Tuition locks, also known as level tuition rates and guaranteed tuition rates, set a fixed tuition rate for each incoming class for up to four years. Although tuition locks claim to provide families with predictable college costs, they don’t guarantee that financial aid packages will remain unchanged.
The University of Dayton, however, addressed this problem by providing a net price lock since 2013. Scholarships and grants are increased each year to offset tuition increases, yielding a stable net price. There are no fees or hidden expenses. Students who visit the campus and file the Free Application for Federal Student Aid (FAFSA) are eligible for a textbook scholarship worth up to $4,000 across four years. The university also provides study abroad opportunities at no additional cost.
"Higher education has a responsibility to be upfront and transparent about [college costs]," University of Dayton President Eric F. Spina said.
The transparency of the net price lock has been popular with families because it provides them with peace of mind. They are able to make an informed, four-year financial commitment for their child’s college education. They pay the same net price during the senior year as they pay during the freshman year.
The class of 2017, which is the first cohort to have enrolled and graduated under the net price lock, has demonstrated significant improvements in outcomes for all students, including low-income and underrepresented students.
- The four-year graduation rate has increased by 8 percentage points to 67 percent, setting a new record for the university. The six-year graduation rate is expected to exceed 85 percent.
- Retention rates increased by 3 percentage points from the freshman to the sophomore year and 4 percentage points from the sophomore year to the junior year and the junior year to the senior year.
- Fewer students are borrowing and those who are borrowing are borrowing less. Students are graduating with about $5,000 less debt on average ($6 million less in aggregate) as compared with the previous cohort, a 22 percent decrease.
- Summer melt decreased by 40 percent
“These outcomes are phenomenal and prove that transparent pricing makes a huge difference for students and their families,” said Jason Reinoehl, vice president for strategic enrollment management at the University of Dayton.