By Sean Newton '15
Inspired by Uber and efficient markets, Booth announced last week that it will be rolling out surge pricing on tuition for students admitted in the third round of the admissions cycle. The policy relies on a sophisticated algorithm that calculates the absolute maximum tuition that third round admits will withstand. The algorithm will be tested on the incoming class of 2017.
Students admitted in the third round will receive the following push notification from the Booth Admissions office to justify the skyrocketing tuition: “Demand is off the charts! We’re raising prices to get more professors out of sabbatical.” Students must confirm that they understand that their tuition has increased before they can matriculate.
Booth will not be the first business school to implement surge pricing. Third round applicants at HBS and Wharton have been forced to accept record-high tuition bills. While the programs have been a financial winner for schools, students that pay the higher rates are experiencing momentary outrage that quickly fades to apathy. One student explained, “I am so frustrated with surge tuition. I’m so tempted to refuse to pay it and go to one of those old-fashioned business schools. All this school cares about is making money off of its students. But, man, it’s so late in the application process at this point and I haven’t really planned for anything else. Screw it. I’ll just eat the surge.”
While most Booth students are skeptical of the plan, the kid from your economics class begs to differ, “Yeah so the thing about that is that everyone thinks it’s about demand, but it’s really about supply. This is the best way to get enough professors in the classrooms.” Precocious students in each of your classes have reiterated this view.
Surge tuition is just the tip of the iceberg. Booth also announced plans to implement surge pricing at Kovler and Opening Bell during the lunch hour and at 10:00AM and 3:00PM. Kovler will also have surge pricing when the Lab School students are dismissed; this will be tested on Doritos first before a full afternoon-snack surge pricing rollout.
All printers in Harper will be charging surge rates during the fifteen-minute period before classes start. Booth IT hopes that this will ease demand for rush-period printing by pushing students into the dilemma of deciding whether they should pay $1,000 to print their homework or just fail their classes.
Booth also announced plans to construct of series of sleek classrooms called Select Rooms. Students will pay 2,000 more points and 2,000 more tuition dollars to be taught in classrooms equipped with with sparkling interior, granite tables, and leather rolling chairs. While the prices for Select Rooms are steep, Booth is excited about the opportunity to charge more money to those who want to pay to be part of a more elite, wealthier group of students.
Surge pricing will surely have a harsh effect on students’ bank accounts, but Booth believes that the new pricing model will ultimately be embraced. At the very least it will give students yet another opportunity to wax intellectual about business models and big data.