As families balk at college costs, some private schools cut tuition and debt

MINNEAPOLIS — Several Minnesota private colleges have recently introduced creative efforts to prove to students and parents that they’re affordable, both in the cost of attending now — tuition, room and board and fees — and the amount of loan debt students will owe after graduation.

From Winona to St. Paul, colleges and universities’ new strategies include a “no-loans” program for Carleton College students getting financial aid, slashing the base tuition price at Concordia University, St. Paul and a St. Mary’s University of Minnesota initiative to help pay back loans post-graduation if alumni earn lower salaries.

“The cost of college is a mystery and the only thing that people have is the impression that it keeps on going up,” said Mark Kantrowitz, a college finance expert who tracks colleges’ affordability efforts. “Colleges face challenges where families are increasingly price-sensitive and focused on affordability.”

Many families won’t even consider attending a school when they see the high “sticker price” listed on its website and brochures. Even if few students actually pay that amount, many people don’t know that and are scared off, college officials said. Students and families are also more resistant to taking on loans.

“It seems clear that the fear of debt is really changing students’ college choices and it’s also constraining their future options,” said Alison Byerly, Carleton College’s president.

Families are also increasingly looking at students’ outcomes after college — it’s no longer just whether they can pay the bill, but whether it’s worthwhile to enroll, Kantrowitz said, adding that the result is a general angst in society about college costs.

Higher education in Minnesota — and the U.S. — is facing significant challenges as tuition prices and student debt continue to rise. Parents are questioning the return-on-investment in a challenging job market complicated by the rise of AI. Institutions face declining federal funding, flat or declining state funding and high inflation. And the pool of traditional-aged college students is soon predicted to shrink.

“Different schools have very different strategies [to show they’re affordable] because we all have slightly different financial structures,” said Byerly, who is also the board chair of the Minnesota Private College Council. “What your strategy is will differ quite a bit depending on your market position, your resources, the type of student you’re attracting.”

One college just used the same formula a second time to lower prices. Concordia, St. Paul’s “tuition reset” brought them steadily increasing enrollment beginning in 2013. Back then, they sliced $10,000 off tuition, making it the lowest private school tuition in Minnesota at $19,700.

“We needed to do something more dramatic and more student-focused, which is bring that price down,” said Eric LaMott, Concordia’s provost and chief operating officer.

In September, they announced another cut, this time for $5,500. Dozens of other colleges have also made the move. Kantrowitz said 20 colleges axed their tuition in 2018, a high point for the trend.

Helping pay off loans

St. Mary’s University of Minnesota officials wanted to show prospective students that they’re accessible and they care about students before, during and after they attend classes in Winona. That includes assuring students who earn $60,000 or less after graduation that they’ll get help paying off their loans.

Officials say they’re the only Minnesota school with a “loan assistance repayment program” like the Cardinal Pledge, which started this fall but was announced last year. It’s aimed at students who are nervous about getting a good-paying job post-graduation or those who want to pursue positions that may pay less, said Michael McMahon, St. Mary’s vice president for enrollment management.

St. Mary’s will contribute to loan payments of students who take the pledge and later make salaries of $60,000 or less for as long as they’re under that threshold. There’s a sliding scale; students earning $25,000 will get their whole payment funded while those earning, say, $58,000 get 5% to 10% paid for.

“We believe ... students are going to be well-prepared for employment and land a great job, but we also know sometimes annual salary might not be everything,” McMahon said. “We want to support those who feel called to careers in service, education [and] nonprofits.”

About 83% of freshmen opted into the pledge, McMahon said. St. Mary’s traditional undergraduates, on average, pay $11,700 a year in total costs and the median debt of graduates is $21,500.

“We’re less concerned about how much this will cost us [than we are] the value it provides to students in helping them to alleviate their concerns,” McMahon said. “We’re confident that more students will enroll at St. Mary’s because we’re standing behind our education this way.”

This year, first-year enrollment jumped 19%.

Tim Gossen, senior director of admission and early college, said he’s met with high school seniors hoping to be a baseball coach, a youth ministry worker and a K-12 teacher. All were excited about the program.

No more loans in financial aid packages

In September, Carleton College announced that loans will no longer be included in students’ financial aid packages starting next fall. Instead, they’ll be replaced with grants from the Northfield liberal arts college. The change will allow students to pursue the major they choose without worrying about debt after graduation, Byerly said.

About 43% of Carleton students pay the $95,000 published price, which includes tuition, fees, and room and board. For the remaining students who qualify for aid, their families will still have an expected contribution and they’ll be offered a student job to fund the total cost.

The average Carleton student who gets financial aid pays about $21,763 a year. The average graduate in ‘25 left with $21,075 in loan debt.

There’s no income cutoff for financial aid at Carleton and expenses like medical bills or having multiple students in college are taken into consideration, said Art Rodriguez, vice president and dean of admissions and financial aid.

The initiative will cost the college $5 million the first year, which is already covered by fundraising. Carleton aims to raise a total of $128 million toward their endowment so they can offer “no loans” in perpetuity; donors have committed about two-thirds already.

Schools must have a lot of financial resources to eliminate loans, Byerly said, and mostly Ivy League and selective liberal arts colleges do it.

Kantrowitz said he knows of 78 colleges with “no loans” policies through 2025.

The school isn’t looking to bump up enrollment, since that would require more dorms and student space, but more applicants are welcome, she said.

Freshman Zane Colfax appreciates the program though he doesn’t qualify for aid.

“I know a lot of schools aren’t able to do that,” he said. “It reaffirms why I’m glad I came here.”

Chopping tuition

Concordia’s “tuition reset” strategy is fairly popular among colleges because it demonstrates publicly that a college is priced economically and makes costs more transparent, LaMott said.

“[Affordability] is a hot topic, and it has been for a very long time for us,” he said.

The “reset” approach also reduces out-of-pocket costs and loan debt. It’s popular with donors because their dollars go farther, LaMott said.

Concordia, like most private colleges, doesn’t have a big endowment and depends on tuition to operate, LaMott said.

About 15 years ago, officials realized they couldn’t keep increasing tuition 3% to 4% a year because that would push the Lutheran school’s cost beyond the “sticker price” range their constituents would even consider.

A Concordia handout says: “None of our students were paying our full tuition price anyway.”

The school needed to attract 70 students to break even on the cost of making the cut; they grew by 170 students the next year, LaMott said. From 2013 through last fall, Concordia, which had ample room on campus, added more than 1,000 students.

This time, they’ll have to enroll 40 new students to pay it off, he said, making it “a very low-risk decision.” The average student will save $1,500 to $2,000 a year.

One goal was to have tuition priced similarly to the University of Minnesota’s Twin Cities’ sticker price. Concordia’s tuition is $21,700, closer to the U’s $19,312 published price. Concordia students can still receive need and merit-based financial aid.

Bethel University in Arden Hills did their own tuition reset in 2024, chopping 41% off tuition. Since then, the school has seen 24% enrollment growth, said Paul McGinnis, Bethel’s vice president of marketing and enrollment.

At Concordia, Juliana Marroquin, a sophomore biology major from Florida, said the sticker price to attend a state school back home was a few thousand dollars more than Concordia when room and board were added. But that’s without Concordia’s new tuition cut, she said, adding that it will help her stay at Concordia.

“It really does help my family feel secure in the choice that we made,” Marroquin said.