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College Board Trends Data for private nonprofit colleges o Published tuition & fees averaged $27,293 in o $1,164 (4.5%) higher than o Average total charges are $36,993, up 4.3% o In , FT students receive an estimated average of $16,000 in grant aid from all sources. College Board, Trends in College Pricing, 2010
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Defining Tuition Discount
(a) Gross Tuition & Fee Revenue $xx,xxx,xxx
(b) - Institutionally Funded Financial Aid -xx,xxx,xxx
(C) = Net Tuition Revenue $xx,xxx,xxx
(D) (b)/(a) = Tuition Discount % xx.xx%
NACUBO, 2006
College Board Trends Data for private nonprofit colleges
o Published tuition & fees averaged $27,293 in 2010-11. o$1,164 (4.5%) higher than 2009-2010
oAverage total charges are $36,993, up 4.3%
oIn 2010-11, FT students receive an estimated average of $16,000 in grant aid from all sources.
College Board, Trends in College Pricing, 2010
The NACUBO study documents the alarming growth in discounting and non-need-based aid and mentions that many colleges feel locked in "arms race" with each other as they compete for students. In our 2008 white paper, "Time to Reexamine Institutional Cooperation on Financial Aid", we examined the issue of non-need-based aid, suggested ways that increased cooperation among colleges could be structured to benefit colleges and students, and looked at the current antitrust rules that may hinder cooperation. Given the findings of this study, now is the time for colleges to step up and raise the issue of institutional cooperation and what legal changes might be necessary to facilitate it.
Matt ReedProgram DirectorThe Institute for College Access & Successmreed @ticas.orgwww.ticas.org
$35,000 or less 1 in 17 will earn a BA degree by age 24(Approximately 6.0%)
$36,000 - $60,000 1 in 10 will earn a BA degree by age 24(Approximately 12.7%)
$60,000 - $85,000 1 in 4 will earn a BA degree by age 24(Approximately 26%)
$85,000 or more$94K - $121K
1 in 2 will earn a BA degree by age 24(Approximately 51.3%)
Source: Postsecondary Education Opportunity Analysis, Based on 2002 Census Data
Factoid – USA Today – Feb. 2, 2005
Family Income
Assessing the ability to pay for college
Distribution of Full-Time Undergraduates at Four-Year Institutions by Published Tuition and Fees, 2009-10
Source: The College Board, Trends in College Pricing 2009; Annual Survey of Colleges.
Distribution of Full-Time Undergraduates at Private Four-Year Institutions by Published Tuition and Fees, 2009-10
Source: The College Board, Trends in College Pricing 2009; Annual Survey of Colleges.
Distribution of Undergraduate Enrollment by Sector, Fall 1990, Fall 2000 and Fall 2007
Sources: The College Board, Trends in College Pricing 2009; NCES, unpublished data provided by IPEDS staff.
19881989
19901991
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
2008-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
160.00%
The rising price of college 1988-2008 (in 2008 CPI-U constant $)
Public Four-YearPrivate Four-YearPublic Two-YearPrescription DrugsHousehold EnergyCPI-UMedian Family IncomeNew Vehicle
Cum
ulati
ve g
row
th si
nce
1988
Sources: College Board, “Trends in College Pricing, 2008”; Bureau of Labor Statistics, 2009, www.bls.gov ; U.S. Census, Current Population Study-ASEC, 2008.
12
1987
1998
2005
1987
1998
2005
1987
1998
2005
1987
1998
2005
1987
1998
2005
1987
1998
2005
Public Research Public Masters Public As-sociates
Private Research Private Masters Private Bache-lors
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
Tuition State and Local Appropriations Private Gifts, Investment Returns, and Endowment Income
Med
ian
Reve
nues
Per
FTE
Stu
dent
(in
200
5 do
llars
)
Source: Delta Cost Project IPEDS Database, 19-year matched set.
Unrestricted revenue
Median Revenues per FTE by Source: 1987,1998,2005
Freshman Funnel2000 to 2010
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100
100
200
300
400
500
600
700
800
900
1000
ApplicantsAcceptsEnrolled
Tuition, Discount and Net Revenue2000 - 2010
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
$20,000
Gross RevenueNet RevenueAid per Student
Unfunded Financial Aidper Student
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 20090.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
Unfunded Aid as a % of Tuition
Net Revenue per FTE
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
There is no pricing power without excess demand.
Demand - Apps 1600 1600 1600
Accepted 1334 1334 1334
Accept Rate 83.4% 83.4% 83.4%
Discount 50% 50% 47%
Yield 30% 30% 27%
Enrolled 400 400 360
Net Revenue per Student
$15,000 $15,600 $16,536
Aggregate Net Revenue
$6.0M $6,24M $5.95M
2010 Actual 2012 A 2012 B
Assessment of Discount Rate by Yield
# offered#acceptedAverage $Yield
SAT/ACT Scores by Quartile
HS-G
PA b
y Q
uarti
le
What do we know summary? The pie is getting smaller
Only 30% of all college-bound students attend colleges priced >= Bluefield College
Only 20% of college-bound students at private colleges attend a college with our price or less
Colleges are more tuition-dependent Financial aid is increasing more than price New lesser-priced experiences are gaining popularity
and market share
What are our options?
Reduce our price Increase tuition & fees and room & board at a higher
rate than planned Enroll more full-paying students Charge for premium services/experiences Increase enrollment Eliminate/reduce merit-based scholarship assistance Reduce expenses A combination
What are our options?
The Muskingum model: Reduce price. Works for the short-term, but has long-term
consequences Forfeit forever revenue from anyone who pays more
than the average cost of attendance Reduces or eliminates the lure of merit- and talent-
based aid Still must meet the financial need of needy students
What are our options?
The public school model: Increase our price at rates greater than planned Pass more cost on to students When we increase our price we become less
affordable to some and others become less affordable for us
Increased attention from legislators Seems counter-intuitive when we know the only
alternative for families is increased borrowing
What are our options?
The Hamilton and F & M model: Eliminate merit- scholarship in favor of need-based aid Eliminates competitive advantage Merit has become an expectation (students, parents
and high schools) No demonstration of how much we “want” a student Most of merit dollars already meet need and we get
the psychological “bounce” Could compromise our ability to attract students for
key programs
What are our options?
The DePauw model: Decrease net cost by discounting more and exceeding enrollment targets to generate revenue Capacity becomes a problem Bond raters and others have concerns about
discounting and NTR per student Not sustainable without resources (human and
financial) in place
What are our options?
The University of the South model: Decrease tuition 10% in one year What happens with financial aid? Not sustainable unless
Aid is affected Enrollment increases to compensate for loss
of revenue