The Gustavian Weekly

Guaranteed Cost Plan no longer a guarantee | The Gustavian Weekly

By Luke Garrison Staff Writer | April 25, 2008 | News

Next year’s senior class will have seen a nearly $10,000 rise in tuition over the course of its four years at Gustavus. College costs around the country continue to increase at an astonishing rate, which is part of the reason why Gustavus implemented its Guaranteed Cost Plan (GCP) over 40 years ago.

The GCP is an option for incoming students to pay a set amount of money upfront to insure that their tuition does not increase more than a guaranteed percentage during their time in college. The most recent incoming class was offered a GCP with a guarantee of no more than a 4.2 percent increase in tuition if an $800 deposit was paid upfront.

The students and families that can afford the plan have certainly saved money by using it. “It’s the best $800 I’ve ever given Gustavus,” said Senior communication studies major Adam Eckhardt. In the coming weeks, however, a proposal suggesting that the college should eliminate the GCP entirely will be presented by Director of Financial Assistance Mary Booker and Vice President of Admissions Mark Anderson to the Board of Trustees.

“There is a push-pull in looking to flatten costs for everybody, rather than flatten the costs for only the people who can pay the $800 to be on the plan, and that’s what we’re looking at from a financial aid perspective. Can we flatten costs for everybody rather than a select few?” said Booker.

The college seems to think the answer is yes. “If I have more revenue coming in with everybody paying 5.5 percent, then I can get more scholarship dollars. Even if we went up six percent, we can give X amount of dollars to offset that increase and it wouldn’t impact our operational expenses. There is a plus side to this,” said Booker.

The plan is for the removal of the GCP to take effect immediately following Board approval. Next year’s incoming class has not been offered the plan, but the college would still honor the GCPs of those students who are currently on it, similar to the way that the registrar still recognizes students using obsolete catalogs.

“[The GCP] first became popular in the big inflation years, and people were afraid of that, so the plan gave them some assurance … [that] is why it was here, but hopefully now we can level those costs,” said Anderson.

On the surface, it appears to many as though the college is just taking more of the students’ money, which is something nobody wants. Sophomore education major Chelsea Roberts expressed her concerns. “No one is going to come here now. I have a friend transferring in here next semester; I better not tell her that,” said Roberts.

The college hopes students and families can see this decision differently.

“We’re not trying to charge students more money. We are trying to do exactly what [students] are trying to ask us to do, which is please stop going up so much, and make it affordable for me to be here so my scholarship dollars stretch all four years,” said Booker.

While the plan to eliminate the GCP might not seem favorable to students immediately, said Booker, she hopes they will eventually recognize thatbenefits will be seen down the road.

“Five years, seven years from now, hopefully we can get away from having significant [tuition] bumps, so if you’re coming in with $10,000 worth of merit-only scholarships, they will still have some weight to them and not be valued less over the course of four years,” said Booker.

Luke Garrison

2 Comments

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  1. Terry Ruedy says:

    I think you have your stats wrong about increase of almost $10000 for this year seniors. I have it around $3000-$4000 for the 4 year span. I would check you numbers again because I watched this like a hawk when I sent my $800 in to make sure I am receiving what I paid for!

  2. Terry Ruedy says:

    I was incorrect for the number of years it should have been 3 years not 4 years. I do believe the 1st. year was a 10% increase of $3500 and then $3000-$4000 over the next 3 years for a total of $6500-$7500 I sent the $800 after the 1st year.