Measuring the impact of guaranteed tuition plans on enrollment at a minority serving public institution
Author(s)Robertson, Alan D.
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AbstractThis study will contribute to the body of knowledge of price sensitivity with a particular focus on the enrollment of low socioeconomic status students at a minority-serving institution before and after a major tuition policy change. The guaranteed tuition plans (GTPs) potentially have negative, unintended consequences that could reduce affordability and access for low SES students. ^ The main research question examines the tuition price sensitivity of new and continuing students at a minority-serving, public university. One of the subsidiary questions assessed how price responsiveness measures vary for students from new versus continuing groups. The other question researched how student price responsiveness rates differ at a minority serving institution compared to existing price responsiveness rates in national research. ^ Using a "natural experiment" structure, this study analyzed the impact of rapid tuition increases on credit hour production before and after the introduction of GTPs. A multivariate linear regression and price elasticity theory were used to examine differences in price responsiveness between new and continuing students. In addition, differences in price responsiveness among students from different age, gender, and income were studied. ^ The results of this study indicate that students at an institution that serves primarily African-American students are sensitive to price. The effects were demonstrated by a negatively sloped demand curve. A lower inclining trend in the percent of total credit hours enrolled and a lower average number of credit hours taken per student, after accounting for the control variables (i.e. covariates), also demonstrates that both new and continuing students are price sensitive. This study also found that new students were more sensitive to price than continuing students were and that certain student academic, financial, and demographic factors differentially affect student enrollment patterns. ^ The research helps higher education constituencies to improve their understanding of the impact of GTPs on the highest risk student populations. The study will contribute to knowledge about price sensitivity with a particular focus on continuing and new students. The findings of this study could potentially help inform decision-making and policy for financial aid, tuition, and state appropriation for higher education. ^