nonprofit colleges and universities, the institutions reported a 54.5 percent average tuition discount rate for first-year students in 2021-22, and a 49 percent discount for all undergraduates. Both of those figures are record highs. In 2023, the discount rate for first-year undergraduates hit another new high – 56.2 percent. So, a student may ask, what’s the real price? An article on the Inside Higher Ed website notes that, while the discounts communicate to students that financial aid is available, they also signal that pricing is arbitrary. 6 And even a discounted price is out of reach for many students and their families, and they will look for cheaper alternatives for education and job training. Takeaways: The inflation rate in higher education outpaces that of virtually any other sector of the economy, including healthcare. Just as with other services, such as cable television, there is a cost limit past which most consumers will not go to pursue an education. Finding a way to reduce the actual cost of schooling remains the holy grail for colleges and universities. Borrowing large amounts of money for education, based on the promise of higher future earning power, is being viewed more dubiously by students. It remains to be seen if the financial aid discount model for colleges is sustainable long term. Either colleges will recoup the discounts through gifts from donors, the proceeds from endowments or other sources of aid, or they will have to somehow maintain their same level of service with less resources available. Whatever the future holds, in their interactions with students, financial aid and admissions professionals will be required to communicate an even more attractive value proposition for degree programs at their institutions. They will also have to make a persuasive cost/benefit case regarding the ultimate value of a college degree generally, and provide adequate services to help students stay on track in loan repayment once they are persuaded that borrowing is feasible. Challenge #2: Declining Enrollment There were some positive indications in the college enrollment picture last year. In fact, according to a report from the National Student Clearinghouse Research Center, declines in undergraduate fall-term enrollment began to moderate. The total number of registered students fell by just 94,000 in 2022, or 0.6 percent, in comparison to 2021. Community colleges and private, nonprofit four-year schools were able to hold their own after declines in enrollment the previous year. However, when those mildly positive numbers are combined with undergraduate data from all sectors and figures for graduate enrollment are thrown in, the picture darkens. Taken together, enrollment was still 5.8 percent below pre-pandemic, 2019 levels, which translates to 1.1 million fewer students. 7 That’s the continuation of a trend. As the Chronicle of Higher Education stated, based on research from the National Center for Education Statistics, college enrollment had been steadily declining – by 12.3 percent – through the 2010s. 8
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