US colleges get new challenge on tuition fee discounts

Former corporate finance analyst promises to help students negotiate campus aid awards in return for a cut

November 19, 2021
Shopper offered 25% off leaflet in a store entrance to illustrate US colleges get new challenge on tuition fee discounts
Source: Getty

A former corporate finance analyst is creating what he sees as a new wave of data-infused tools that can help US families fight the costly confusion of college pricing – but perhaps hurt institutions in the process.

The entrepreneur, Julian Treves, is just starting his service, which will challenge institutional aid awards – the student-specific discount offered on advertised tuition prices – in return for a share of the additional money his student customers extract.

“I’m very familiar with the world of academia,” said Mr Treves, the son and brother of college professors, “and just looking at it as a businessperson, I was struck by what was going on and how unfair it was to students.”

Mr Treves is launching his company, College Tuition Advisory Services, just weeks after JPMorgan, the biggest US bank by assets, bought the college planning services provider Frank, which also helps students press colleges for larger financial aid awards.

Frank, however, is among the services that ask families to pay several hundred dollars in advance to pursue the aid appeals. Mr Treves said he is confident enough in his data and the expected size of the market that he is willing to file appeals for just the promise of being paid 25 per cent of whatever additional tuition discount he helps students obtain, up to $2,000 (£1,500). Other companies, he said, are getting ready to join him shortly in offering such a contingency fee approach.

The market, he said, centred on the estimated 700,000 students who each year enter moderately selective US institutions – those with admission rates below 35 per cent but outside the elite top tier. Among those students, the prime candidates are students from families earning enough to afford private-school tuition but not so much that institutions would not typically offer them any aid. That probably means an annual income range of about $80,000 to $250,000, he said.

That target area, however, also encompasses many of the middle-tier private institutions that in recent years have been struggling to balance their budgets and stay in business as a result of the long-term retreat in the numbers of US high school graduates, more recently compounded by the pandemic-driven economic decline.

Mr Treves said he recognised that his choice of venture could hurt some vulnerable US colleges. But more importantly, he said, it could help students and families who are defenceless when colleges offer them aid packages that still leave them paying more than necessary.

“My point of view is that I’m not trying to hurt the colleges,” he said. “What I’m trying to do is even the playing field, and make sure the consumers have the information to make the right decisions.”

Experts in selective colleges and admissions acknowledged that such developments could force significant change in the process of setting tuition fees, especially if the data compiled by Mr Treves and other entrants truly allowed students to accurately predict the net rates that colleges are willing to accept.

It is too early to make a clear assessment of that effect, said Richard Ekman, an adviser and former president at the Council of Independent Colleges, whose members include selective liberal arts institutions. But the idea, Dr Ekman said, did appear to raise the possibility of hurting private higher education while doing little to help the neediest students.

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