MICHEL MARTIN, HOST:
A handful of colleges around the country charge zero dollars for tuition. To make the math work, they build their budgets around the concept that they will not collect revenue from students. Reporter Jeff Tyler visited two colleges in Kentucky to see how they do it.
JEFF TYLER, BYLINE: In the lush foothills of central Kentucky, Berea seems like your average small, private college, down to its stately brick buildings and its inspiring school anthem.
UNIDENTIFIED GROUP: (Singing, unintelligible)
TYLER: Despite appearances, Berea is very unusual. Its 1,600 students all come from low-income families, and not one of them pays for tuition.
HOLLIE JAMESON: A lot of people say, this isn't real. This has got to be fake. But I came here, made a visit, and it was legit.
TYLER: Twenty-two-year-old Hollie Jamison is living proof. She's the first in her family to go to college. She's now finishing her nursing degree.
JAMESON: I will leave in May of 2020 with a free education as an RN.
TYLER: That isn't normal.
JAMESON: I even have friends in nursing schools here in Kentucky that kind of say, oh, my gosh. You're so lucky. Like, I already have $20,000 in debt, and I am where you are, and you have zero.
TYLER: Around here, the idea of no tuition isn't new.
JEFF AMBURGEY: Berea College has not been collecting tuition from students since 1892.
TYLER: Jeff Amburgey is Berea's vice president of finance. He says the college's ability to cover tuition can be traced to a financial decision from a hundred years ago. The board made a rule that any unrestricted money donated to the college would be invested in an endowment to grow over time. Today, the endowment is worth a whopping $1.2 billion, and profits from the investments cover most of the cost of tuition. Amburgey says other colleges could benefit from the same approach.
TYLER: Those administrators and faculty staff that are working there in 50 to 75 years will look back like Berea does today to 1920 and say, man, we're glad they did that.
TYLER: And if you don't have the patience to wait 75 years, there's another model that covers tuition without a massive endowment. Let's move about a hundred miles east to another college in the tiny town of Pippa Passes. In the early 1900s, an Appalachian mountain man traded the land along this creek to an educated woman from Boston. When Alice Lloyd eventually founded a college here, she never made her poor students pay tuition. And that decision informs how the college is run today.
JIM STEPP: When you begin with the concept that you're not going to charge out-of-pocket tuition, everything you do has to be built around that concept.
TYLER: Jim Stepp is the executive vice president at Alice Lloyd College. And to help cover the cost of tuition for around 600 students, it relies more heavily on fundraising. It also asks more from its professors.
STEPP: Faculty will teach up to 40% heavier class load than you do at a lot of similar colleges.
TYLER: Another way Alice Lloyd saves money - no tenure so they can be flexible. That might spark a revolt at some schools. But there is something other colleges could learn from Alice Lloyd - the way it pays for new buildings.
STEPP: Here, we raise the money from private donors before we build.
TYLER: On a campus tour with marketing director Katie Westerfield, we watched giant machines claw a foundation.
KATIE WESTERFIELD: This is the newest facility on our campus. It has recreation for our students as well as a gymnasium. So this building, even though it is not completed and won't be until the end of 2019, it is fully funded at 20 million.
TYLER: Stepp says he understands how competition for students can make new facilities seem urgent. At the same time, he wonders...
STEPP: How much debt should a college really go into as an institution? Do you need to put as much money into the facilities when students ultimately are going to pay for that through tuition?
TYLER: Finally, there is something else that Alice Lloyd and Berea both do that seems like a good way to save money. Berea and Alice Lloyd are work colleges, requiring students to work at least 10 hours a week. This opportunity provides great training and character building for students. But when other schools tried, it they found the work college approach to be too expensive.
For NPR News, I'm Jeff Tyler in Pippa Passes, Ky. Transcript provided by NPR, Copyright NPR.