Tuition Freedom Day

Posted on 12/01/2016

It’s no secret that the cost of higher education is rising at an alarming rate. Many parents lie awake at night worrying about how they will be able to afford to send their children to college. But few institutions have done a good job explaining why costs have risen so steeply.

While there are several contributing factors, many student and parents don’t realize that their own expectations are a major reason why tuition has increased so steeply. There was a time when college students may have been satisfied with a bunk and a book. Today, schools feel pressure to offer rock-climbing walls, wifi, and single apartments if they want to attract the best students.

In some industries, competition drives costs down. For example, imagine that you own a shoe store that sells one brand of shoes for $50. Then, someone comes along and opens a store next door selling that same pair of shoes for $40. All things equal, you’ll have to lower your price by $10 in order to remain competitive. The opposite is true for many educational institutions. Imagine two universities that are competing for the same students. All things equal, if one university builds a brand new student exercise facility, the other one may feel compelled to do the same in order to remain competitive.

Money doesn’t grow on trees and there aren’t many ways for educational institutions to generate revenue to cover rising costs. Many colleges and universities rely on tuition to cover a majority of their operating budgets. This means that when costs go up for whatever reason, tuition may be the only way to cover the additional expenses. Philanthropy can be a great alternative.

At Kalamazoo College in Michigan, tuition covers approximately 67% of the cost to run the college. Donations cover a large portion of the remaining expenses. To highlight this point, the annual fund team sponsors Tuition Freedom Day, marking the approximate point in the academic year when tuition revenue theoretically “runs out” and philanthropic support takes over. Student volunteers spend the day writing thank you notes. Because there are many different ways to support the college, they make a point of sending notes to all types of donors, not just those who make big endowment or capital gifts.

Finding ways to teach students and families about the impact of philanthropy is important. But it’s also important to explain how philanthropy fits into the bigger picture. Explaining the financial aspects of running an educational institution is an important part of that picture.


This article has been adapted from the book Ideas for Annual Giving by Dan Allenby. Copyright (c) 2016 Council for Advancement and Support of Education. All rights reserved. Used by permission.

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