Part II of II
Last week, I wrote about an alarming trend: college tuition is increasing much faster than median household income. Public colleges, with their traditionally affordable rates, needn’t be too concerned, but private colleges run a serious risk of pricing out many potential students. This week I’ll look at what might happen if this trend continues.
The trouble is that private colleges offer students many of the same opportunities that public colleges do. I could have gone to the University of Maryland and studied exactly what I have here for about $12,000 a year; I chose to come to Lawrence and pay about $28,000 more.
As private college tuition creeps higher, more students are going to start deciding the other way. It’s not so much a reflection on private schools, but merely of economic realities – no one would choose to be financially crippled when a perfectly adequate, much cheaper alternative exists.
If and when that migration starts happening, private colleges will really be stuck. With decreased enrollment, two revenue sources will also decrease: tuition and concession money. To pay employees, maintain and improve facilities, ensure the safety and comfort of students, advertise, fund projects – keep the place running – colleges will find themselves dependent on their endowments, private donations and government grants. None of those are terribly reliable as a steady stream of income.
As revenue decreases, private colleges won’t be able to hire new professors and build new buildings; in fact, they’ll need to start increasing tuition just to maintain the campus and pay everyone. Prospective students will have fewer and fewer reasons to enroll, especially given the thriving public universities offering much cheaper education right down the street. Money trouble forced Antioch College to close a few years ago, and if tuition trends continue, Antioch won’t be alone.
How might private colleges avoid this grisly end? Harvard and UPenn made themselves more attractive to students by drastically overhauling their tuition scheme, funding huge percentages of low-income students’ tuitions. However, few private schools outside of the well-endowed Ivy League could afford such a reduction in tuition revenue. The rest have to work on maximizing profits.
Companies are experimenting with for-profit private schools run as businesses. Schools such as DeVry University and the University of Phoenix offer online courses to reach a wider audience and eschew the traditional single campus for many smaller non-residential campuses, both to reduce expenditures on student safety and comfort and to be more convenient to more students.
I think there will always be private colleges – perhaps not quite like the ones we’re used to seeing – because there will always be people willing to pay money for a niche product. Private schools just need to focus on offering students education, opportunities and experiences that are unique or better than public colleges.
Trying to compete with public schools for the same students is a sure recipe for disaster. Rather, private colleges need to figure out what they can offer that no one else does. They can offer students smaller class sizes and more contact with professors. They can specialize in certain subject areas – by having a conservatory of music, for example. They can affiliate with a religion. They can offer a liberal arts experience deep enough to blow public liberal arts schools out of the water. Only in niche markets, where the demand is low but the supply is even lower, will private colleges be able to justify charging as much as they do.
Change is always hard. Changing a private college, which is little more than a huge collection of entrenched interests and architecture, seems close to impossible. However, if tuition prices keep rising faster than Americans earn the money to pay them, something is going to have to give. Hopefully, before that day comes, we’ll have worked out a system that preserves the wealth of options our universities currently offer students.
Rising tuition costs
