Jan 12, 2015

Common App unveils new pricing plan

Providence College is 'exclusive' to the Common Application
Just in time to ring in the New Year, officials at the Common Application unveiled a new, three-tier pricing plan along with a price guarantee feature for those institutions willing to pay memberships fees ahead for up to a maximum of five years.

And the new plan has produced an interesting series of pricing variables for members and prospective members over the next five years.  By FY 2020, all colleges should be paying the same price for the same product.  But until then, prices will not only vary by platform or service level, but also by college or university.

“Changing from a system of three prices for one product to one price for three sub-divided products has some challenges—most notably the potentially steep increases in price some Members would have to pay if we did this all in one fell swoop,” said Paul Mott, interim CEO, in an email to members.  “For this reason, we elected a more gradual transition, spread out over five years.”

Previously, members paid a per application fee based on exclusivity, with those members using only the Common Application receiving the lowest prices.  

After the problems of last year and a lawsuit accusing the Common Application of predatory pricing, the membership loudly voted for a change in pricing based more on functionality and service than loyalty to the Common App.

But this produced implementation problems as the resulting increased costs to exclusive members would have been extreme.  And rather than lose these members to other providers, the Common App came up with a complicated series of tables tailored to individual members based on three different platforms (with a fourth in the wings for a year later):

  • Custom Platform:  “Customized member-specific questions, dynamic relationships, and requirement rules”
  • Standard Platform:  “Member-specific questions selected from a pre-written bank of options”
  • Essential Platform:  None of the above.

Other terms of delivery and support also differentiate the three platforms along with prices which vary by member for FY 2016 through FY 2019, after which all members should be on the same scale.

For example, one university is being offered the Custom Platform in FY 2016 for $4.09 per application submitted, while another is being offered the same product for $4.69. In FY 2017, the same institutions would be paying $4.18 and $4.63, respectively but by FY 2020, they would both be paying $4.45 per application.

Figuring in an increase in the annual membership fee from $500 to $1000, Mott estimates that the cost to members will on average decrease for 2015-2016 a minimum of 1.25%.  That could be because most Common App members were non-exclusive.  Exclusive members, however, will likely see fairly sharp increases stretched out over five years.

In addition to the new per application pricing plan, members are invited to lock in their individual “quotes” for the next five years by taking advantage of the Common App’s “price guarantee” feature.  This requires members to pre-pay their membership fee for however many number of years, up to a maximum of five.  Under this plan, colleges can budget in advance and count on no price increases beyond what is specified in the plan they received.  Prices, in fact, might even go down if business is better than what the Common App projects.

And finally, the Common App will be removing the mark-up on Higher One services (payment processing).  Instead of a sliding scale based again on exclusivity, the Common App will only charge what they are charged—just $2.00—per application next year.  In other words, the Common App is discontinuing the practice of making a profit on payment processing services for non-exclusive members.

It’s a good deal to digest and each member is being asked to make an immediate decision about continuing with the Common App, how many years of membership fees to commit to, and at what platform level.

For now, no information has been released as to how these platforms will look to applicants and what the new pricing scheme will mean to the application industry now that there will be no further penalties for offering one or more additional application products to applicants.

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