Value of service pricing, don't you love it? President Cooper does.
William E. Cooper, the president at Richmond, says he realizes that his university’s cost increase “superficially seems outrageous.” But he said that he became convinced that Richmond “was about $7,000 underpriced” and that the additional revenue would allow for more financial aid and improvements in facilities and academic programs. “We could dink around with this and ramp it up a little each year, but we decided it was better to bite the bullet, to realign this and stay in place, rather than looking confused.”
But what of student choices, and the widespread public and political fear that high prices discourage students? With certain student segments, that’s flat out false, Cooper says. Richmond found, he said, that it was losing students to more expensive institutions and enrolling students whose parents were willing to spend more than Richmond was charging.
“We were leaving money on the table,” Cooper says. “We had all these people with a kid at Dartmouth or a kid at Syracuse, and a kid here, and we were the cheap school.”
“One of the strong philosophical bents of this change was the price insensitivity of people who really care about higher education,” Cooper says. “Just like people buy the best cappuccino maker if they really care, so with higher education. If you really care, a couple thousand bucks isn’t in the decision maker and that’s the student and family we want.”That last sentence appears to be garbled, but it's classic positional arms race. But is that a sustainable strategy for private universities that aspire to be exclusive, given the absence of any premium to a degree from a more famous university (many of which appear to be engaging in the same kinds of false economies and misguided diversity initiatives of their state-located competitors?)