Iowa private colleges are increasing their full-tuition coverage options for more students, hoping to increase enrollment and attract Iowans. (Photo illustration via Getty Images)
An increased number of higher education institutions, in Iowa and across the U.S., are launching 100% tuition coverage programs for students, some with few eligibility requirements beyond admission to the university, a certain grade-point average and a federal student aid application.
Although increasing enrollment by offering free or nearly free tuition might seem like a risky economic move, private colleges and universities in Iowa say they’re confident expanding financial aid offerings to more students will help grow both enrollment and revenue.
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Drake University in Des Moines announced in November that certain students will be able to have their entire cost of tuition covered through the new Bulldog Promise and Bright College Pathway programs. University President Marty Martin said the university will leverage the Iowa Tuition Grant and Pell Grant before applying university dollars to fill the gap in tuition costs.
These programs have the broadest application for incoming students, Martin said, but the university also offers 100% tuition coverage options in certain departments and in athletics.
“We’re certainly expecting it to attract more students to Drake University, because, of course, this takes one big concern off the table, the cost of tuition for those students that qualify, and then they can really focus on the value proposition of Drake, which is incredibly high,” Martin said.
Simpson College in Indianola added to the full-tuition scholarships it opened up last year, including the 100K Promise and 99-County Full Tuition, with the creation of full-tuition coverage offerings for eligible students graduating from the Indianola and Des Moines school districts.
Leigh Mlodzik, vice president of enrollment at Simpson, said the college has seen hikes in both revenue and enrollment as a result of the programs launched last year.
“We actually saw some of our greatest tuition revenue growth over the course of the last year,” Mlodzik said.
Both college officials agreed that they aren’t expecting to see any dips in revenue or other negative financial impacts from implementing more full-tuition financial aid programs, with Mlodzik saying the college took a “strategic approach” to growing both enrollment and revenue streams.
While not a direct comparison, Martin said the university saw enrollment growth without taking hits to the budget after launching its tuition guarantee in 2018, which ensured tuition wouldn’t increase for students past the price they paid when they first enrolled.
“We’ve been working really hard for the last 10 years on the affordability proposition for Drake,” Martin said.
More options, affordability for students
Gary Steinke, president of the Iowa Association of Independent Colleges and Universities, said he’s seen similar trends in expanded full-tuition coverage options pop up among private colleges across the country, especially in states where the population isn’t booming.
The main mission behind these new programs plays into many of the decisions colleges are making ahead of the enrollment cliff, Steinke said, which is to attract more students and boost enrollment.
“I think it’s a really competitive market out there right now, and a lot of schools are looking to increase enrollment,” Mlodzik said. “And this is one way to attract more students, by being able to offer a really affordable option and something that’s really accessible for students.”
Increases in outside aid for students like the Iowa Tuition Grant and Pell Grant program has also allowed colleges to bolster their own programs, Martin said. Competition has also grown alongside financial aid, he said.
Colleges set sights on Iowa students
Beyond the goal of increasing enrollment, Steinke said colleges are expanding their financial aid offerings with a certain population in mind — Iowans.
“Iowa students, who may not have thought either about going to college or going to college in Iowa, will take a second look at this kind of guarantee that it’s not going to cost them anything to go to college, except for maybe room and board,” Steinke said.
Both Drake and Simpson saw increases in resident students this year. Mlodzik said they saw an 11% bump in first-year students this fall, a large portion of them coming from Iowa.
Where historically Drake had a 70/30 split between nonresident and resident students, Martin said the university’s work in attracting Iowans has evened out those numbers a bit, to 60% out-of-state and 40% in-state.
“We have really paid a lot of attention to Iowa over the last seven, eight years in particular, recognizing that there’s students who would benefit greatly from a Drake education that might have thought of us as not their school,” Martin said.
Strategic planning for a sustainable future
Of the 24 Iowa private colleges that are members of the association, Steinke said they raise and spend a combined $500 million on financial aid annually. Steinke said he believes this trend is a sustainable one, at least for the foreseeable future.
“The amount of private donations that they get for financial aid from generous people, I think will only increase as time goes along and as the economy improves,” Steinke said. “I think you will see more and more generous folks willing to contribute to the financial aid program that each of the individual institutions provide.”
Martin agreed, saying Drake just closed the most successful fundraising campaign in the university’s history. The Ones Campaign had a goal of $225 million, which it surpassed by more than $40 million. Nearly $55 million of those funds were given specifically for scholarship programs.
“The ability to raise all those scholarship dollars gives us the ability now to reinvest back in making Drake even more affordable than it already was,” Martin said. “So we’re coming at this from a real position of strength, and we were pleased that our donors responded to that call over the course of this campaign.”
While Martin and Mlodzik both expressed confidence in the strength of their programs, they acknowledged that there could be a situation where a private university could tip the scales too far on one side, causing negative financial impacts.
Mlodzik said colleges need to pay attention to how they’re leveraging their aid and ensure they’re doing so strategically.
“I think schools have to take a really close look at it, because it can be a slippery slope at times in terms of how programs are rolled out and making sure that there’s still increasing net revenue, like we’ve been able to do, along with the increased enrollment,” Mlodzik said.
While there is always the possibility that a college could go too far in its financial aid offerings and experience problems, Steinke said it’s unlikely. Those involved in the financial side of university business are checking their budgets on a day-to-day basis, he said, and they’re managing their finances very carefully.
“I don’t think you’ll ever see a situation where an institution gets caught and says, ‘Oh my gosh, we’ve gone too far,’ you know, they pretty much know what they’re doing,” Steinke said. “Maybe in some cases, they’re taking a chance, but it won’t be a chance that’ll devastate them.”
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