The Effect of Tuition Increases on Business Student Decisions

Abstract

Tuition increases have become all too common as states have cut spending to public institutions and private schools face declining enrollments. As such, understanding the effects of various methods of framing tuition increases is an important, but infrequently researched topic. The authors examine different ways to frame tuition increases presented to students in business-related courses. The outcomes of two empirical studies demonstrate that mental accounting may play a role in how these frames differentially affect students’ responses to tuition increases. These differences in turn have significant implications for business program administrators and faculty.

Keywords:

• loans
• mental account
• student debt
• tuition increase