CEDAR RAPIDS — With student debt and recruitment dominating headlines of late as President Obama rolls out new student loan rules and the Board of Regents pushes Iowa’s public universities to vie harder for local students, Coe College on Tuesday announced plans to help its prospective applicants combat the rising cost of college.
The Cedar Rapids-based private institution is joining 11 other private colleges or universities in Iowa that accept “tuition certificates” bought under the Private College 529 Plan. The plan helps students “lock in tomorrow’s tuition today” by freezing tuition for prospective students at the point they buy in — even if they are years from graduating from high school.
Although prospective students don’t have to commit to a school until they redeem their certificates, buying into the program does incentivize them to enroll at one of the participating private schools after graduation.
Coe’s announcement comes at a time of ramped-up competition in Iowa for its shrinking pool of college-bound residents after regents last week approved a new model for allocating state funds to its three public universities — the University of Iowa, Iowa State University and University of Northern Iowa. The new metrics tie 60 percent of state higher-education funds to resident enrollment.
In response, all three universities have said they intend to ramp up recruiting efforts for in-state students in hopes of retaining more of those dollars.
Michael White, vice president for administration and enrollment services at Coe College, said many believe this is “not great news” for private schools.
“If Iowa State, the University of Iowa and UNI all are looking for more and more in-state students, there is more pressure on the privates and community colleges,” White said. “There are only so many students to go around, and if more of them go to UI or ISU or UNI, that is fewer that will consider going to private colleges.”
Coe’s announcement Tuesday adds to the list of private colleges and universities in Iowa that accept tuition certificates under the Private College 529 Plan. Those schools include Wartburg, Luther, Grinnell, Central and Simpson colleges.
The plan works by allowing families to essentially prepay college tuition by buying tuition certificates that can be used at any participating school up to 30 years later. One semester of undergraduate tuition purchased today will be worth a semester of tuition when the certificates are redeemed — regardless of how much tuition rises or how much financial markets fluctuate.
The sooner families buy into the plan, the more they can save, according to Tuition Plan Consortium LLC, which provides the private college tuition plan.
The announcement comes a day after President Barack Obama authorized the expansion of a program expected to let millions of student loan borrowers cap their student loan payments at 10 percent of their income. Obama also outlined new executive actions intended to support student borrowers — although critics say his actions do nothing to address the larger problem of the rising cost of college tuition.
Between the 2001-02 and 2011-12 school years, prices for undergraduate tuition, room and board rose 40 percent at public institutions and 28 percent at private non-profit institutions, according to the U.S. Department of Education National Center for Education Statistics.
White said Coe’s decision to join the group of schools willing to accept the tuition certificates gives families more options for funding a Coe education and keeping costs down.
“This gives Coe College another tool to help keep tuition affordable for future generations of Kohawks,” he said in a news release.
The Tuition Plan Consortium was formed as a not-for-profit organization in 1998 to establish a prepaid tuition option designed specifically for private colleges and universities. Today, more than 270 institutions across the country are participating in the plan.
Only a handful of states — such as California, New York and Texas — have more colleges participating in the program than Iowa, according to The Tuition Plan.
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