Engineering was the only major in the sample where the effect of differential tuition pricing was statistically significant. The impact was negative; that is, differential tuition policy decreased the number of degrees produced by institutions.
The share of business degrees decreased and the percent of nursing degrees increased, but these effects were not related to differential tuition pricing.
There is some evidence that differential pricing for engineering students is associated with fewer Pell recipients entering engineering.
There is no evidence that differential pricing leads to reallocation of institutional grant aid across majors.
Consistent with the concern of some differential tuition critics, the results indicated that women and students of color are more adversely affected by these policies than males and whites, especially in engineering. With states attempting to increase the number of women and minorities in STEM fields, policymakers should study the relative effect of tuition rates on enrollment in specific majors.
Implementing differentials may indeed impact the majors that students pursue. The research design, however, did not permit the type of precision that would allow for causal comparisons. In fact, students might respond more to other incentives or price signals. This study does not speculate the relative impact of tuition differentials on students' decision of major.
Since differentials may reduce demand for certain majors, these policies may not raise as much revenue as expected. It is important for colleges to understand how the revenue and student impact of differential pricing compares to alternative pricing schemes such as across-the-board tuition increases or higher tuition for wealthier or out-of-state students.
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