Examining the Effects of Tuition Reset Policies on Enrollment and Institutional Finances at Minority Serving Institutions
This chapter addresses the unique financial situation of Minority Serving Institutions (MSIs) and empirically analyzes how changes in pricing strategies may impact student demand, enrollment, and institutional finances. The authors provide an overview of the history of MSIs and the complex set of policies dictating these institutions’ MSI designation(s) and sources of public funding. The authors then provide an overview of postsecondary pricing strategies and why MSI designation may be related to the success of differing approaches. Using a difference-in-differences estimation strategy, the authors find that private MSIs may grow enrollment and total tuition revenue by resetting tuition, or decreasing sticker price by at least 5%. Public MSIs and all non-MSIs do not appear to receive the same benefits, which suggests the tuition reset strategy may only be effective in certain contexts.