How College Pricing Is Like Holiday Retail Sales

January 03, 2014

Never thought of it this way, but guess this is an apt analogy—comparing retail sticker prices to college tuitions: “When the system isn’t especially transparent, discounts can get people overexcited, whether they’re real savings or not.”

The common assumption is that retailers stock up on goods and then mark down the ones that don’t sell, taking a hit to their profits. But that isn’t typically how it plays out. Instead, big retailers work backward with their suppliers to set starting prices that, after all the markdowns, will yield the profit margins they want.

(I knew it! I’m onto you, J.Crew.)

It’s worth mentioning that one big difference between the pricing of higher education and other consumer goods is the ease of comparison shopping: When you’re shopping for a new TV set, it’s relatively easy to compare prices with a little research. It’s much harder to do that with colleges, especially when you have to narrow down your options to a manageable number and submit applications before knowing for sure how much each option will end up costing.

Pricing, however, doesn’t just factor into enrollment, it comes into play even earlier than that—during the application process. The cost of applying alone can alter an applicant’s college application strategy and which schools to try for. Though many schools waive their fees for certain students, the financial cost can still be a burden.

(Blatant self plug: Admitsee.com can help in this respect. It’s not only a source for students who do not have older siblings to guide them as they go through the process, but can also be used as a source of cash toward common app fees, whether through profile sales or referral commissions.)

Though the holidays are behind us, we’re only just beginning the post-New Year’s sales. And, if this year’s extended application deadlines mean colleges will end up collecting more fees, perhaps the comparison is more on the money (pun perhaps intended) than I initially thought.



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