Friday, May 19, 2006
Sunk Cost as a Motivator?
Example (drawing on yesterday’s algebra discussion): if current full-time tuition for a semester equals x:
1st semester: 1.75x
2nd semester: 1.25x
3rd semester: .75 x
4th semester: .25 x
Or something like that. For part-time students, just pro-rate by credit hours. Use the ‘sunk cost’ fallacy to goad students to graduate.
I have to admit, I’d never thought of that.
Someone else had a variation on it: a graduation deposit. Have each new student put a chunk of money down as a graduation deposit, refundable with interest upon graduation. Sort of an incentive to stay the course. That one bothers me more, since it seems to create a perverse incentive for the institution.
Oh, wise and generous readers: what do you think? Would the sunk cost approach work, or would it just scare students away upfront? Would students just transfer in their first semester of coursework and screw us that way? The idea is just cool enough that I don’t want to discard it without batting it around first.
The first option sounds really interesting. However, I think I, as a student, would have avoided a school with that policy. It would just seem a little weird, a little complicated, and might indicate that the rest of the experience at that school would be similarly out of the ordinary. If *every* school did it, or every CC in a particular system, it might not seem so strange.
What about promises of fixed tuition rates? Perhaps your school already does this, or perhaps it's not a concern where you are. My state U system has recently been enacting some strange tuition increases -- strange in that students would find out in July that they needed to pony up another grand in August. One of the solutions that was called for was a fixed tuition rate for an incoming class, no matter how long it took them to get their degrees.
Starting in the Fall of 06, FTIC students who complete 30 credit hours in twelve months will recieve a $500 credit towards the next year. If they have 60 credits after 24 months, they get a $1000 credit towards the third year. If they complete 90 credits by the end of 36 months, then they get a $1500 credit for the fourth year.
This is designed to improve "retention".
It works for the girl, who is responsible, compliant, and motivated and probably would have been fine anyway. It doesn't work for the boy, who is a flake. So...an N that small can't possibly answer your question but at least you know the idea is not completely from outer space.
As Annie pointed out, it would be easy for students to shop elsewhere.
She also suggested fixing tuition. That seems to be well in the spirit of what you are trying to affect. By fixing tuition for continuously enrolled full-time students, you are still rewarding students, and keping it simple for you, the students and the bursar.
Students here at Mediocre U. would be thrilled with a tuition fixed at their matriculation.
seems like it would be very hard for our student population to work with this.
We had 3 years with 3 terms each. First term was the most expensive and it went down each term. Although the cost of needed supplies went up. I found it nice becasue as I got more stressed with my projects, I was less stressed financially.
I'd be worried about the impact on part-time students, who usually try to work their way through, and (the flip side) about creating an incentive for students to take their first semester elsewhere and transfer it in.
And yes, we need deans.
Sometimes the extra time in the system is for a good cause: I took five years to earn my B.A., not because of failures, but because I switched from hard science and engineering to history: I actually completed enough credits in the first area to walk away with an associate's degree but I didn't want to just come out with any degree, I wanted to get the education I'd learned was the best fit for me.
To answer the loan question posted in a previous comment, I do know that a student that is a senior can borrow more in Federal loans than a student that is a freshman. When I was a freshman, I borrowed and my parents also borrowed to pay the university. As I progressed through my program, they borrowed less and I borrowed more to pay the bills.
I would guess that 1.75x front loads the cost rather too much, and something closer to 1.5x would be more acceptable, without losing the incentive effect you want. Also, to compensate for the time value of money, you might enlarge the back end discount somewhat, so that the prepayment option saves 5% off the total tuition bill.
The financial credit for achieving certain goals mention above seems like a easier-to-implement alternative to the same goal, though it might cost some real revenue.
The hidden assumption here is that retention is inherently a good thing. In fact, some unknown portion of the students dropping out are better off quitting and entering the paid work force.
Yes, I registered in a program that will eventually end with the granting of a diploma (and I think it's necessary to be in some "program" to get government loans), but I don't totally agree with the coursework mapped out by the school, so I am choosy. I don't intend to pay $400 for a couple of credit hours in keyboarding, for instance.
I think the "problem" of attrition is related to the worker's experience of the economy, and if things were to take a dive, you might have to readjust any tuition breaks that might get implemented for persistant students, because outside forces would compel more people to remain in school.
Also, I think you can't overlook the fact that for young adults, college (and community college) is a time of trial and error and learning about life. Some of them are already marginal students and just enroll in CC until they either repeat their earlier academic failures or a better option arises.
I think that attrition might be reduced by learning center strategies that help marginal or learning disabled students to become more successful academically. Some of these people have coasted through high school without learning writing or study skills, or without gaining the sense of personal responsibility that keeps them coming to class.
Back to the broader topic: Dean Dad, what percentage of your student enrollment is people looking to extend learning, without trying for a degree? (I'm thinking folks like Z*lda, or me for that matter.) It sounds like they'd pay top dollar for anything you would offer, which might significantly cut into your enrollment.
The first option is intiguing, but I think it would be more fair to those of us who went to college part time at and/or evening to base it on the number of continuously accumulated credits, rather than semesters. (This could also apply in a limited fashion to fixed-rate tuition schemes.) This would go part way towards avoiding the end-loading problem, and might act as a deterrent for students at any level to overload themselves with classes and burn out.
Given the commuter and non-traditional dynamic common to CCs, the rules might be lenient enough to allow a one semester gap from time to time, to accomodate things like pregnancies, deaths, and other major life changes. This could simply be tied to eligibility to enroll, in most cases.
Referencing other comments, I can't say I'd agree with a per-class cost bias. In my particular U, the cost to take a 300 level or higher business class jumped considerably over 100 and 200 level classes. Which made pursuing a minor in business much less attractive, and ensured I took the only minimum necessary for the minor, instead of taking all the classes I would have liked to have knowledge in.
You are also penalizing students who sign up for a course of study and, after realizing that it is not what they thought, have to retake first-year.