At last! First signs arrive that shortage of students is causing tuition cuts at brand-name private colleges
The prestige sector of higher education — private colleges and universities reject a large portion of applicants — has resembled a cartel for decades. Since the late 1950s, every year has the tuition charged by competitive colleges rise by 5 to 10 percent, with most such schools' tuition staying within a few hundred dollars of each other. A financial aid nonprofit estimates that average tuition hikes are about 8% per year, at which pace the cost of college doubles every nine years.
In recent years, the easy availability of federal student loans has allowed tuition levels to rise astronomically, where four years at a competitive private school can cost over a quarter of a million dollars in tuition and expenses.
But demography — shrinking cohorts of high school graduates — and COVID have caused a decline in the number of people seeking to attend college. Bloomberg reports:
U.S. colleges are seeing sharp declines in enrollment of new students this semester in another sign of the economic toll that Covid-19 is having on higher education.
The number of first-year undergraduate students enrolled fell 16%, the National Student Clearinghouse Research Center said in a report Thursday. Total undergraduate enrollment slid 4% from last year at this time, led by international students.
Amazingly, the laws of supply and demand apparently are starting to kick in, and we are seeing a few tuition levels demanded by the prestige schools just barely showing some signs of softening. As a Bloomberg Quint article reports:
Hold on to your mortar board: the cost of a U.S. college education has finally stopped going up. At least that's the case at a small handful of liberal arts colleges that need to lure students in the middle of a pandemic.
Oberlin College, in Ohio, has cut its tuition by $10,000 for all new students. Nearby Denison University is offering an even better deal for Ohio residents: a $100,000 scholarship over four years. And Davidson College, in North Carolina, has frozen its tuition for the first time in a quarter-century.
Oberlin has been suffering national humiliation over its level of campus craziness, culminating in losing a lawsuit by Gibson's Bakery and being ordered to pay $25 million in damages. I would imagine that students returning to campus may be very dissatisfied paying 10 grand more for tuition than the freshmen they see around them, so Oberlin may be buying future turmoil with this limited discount for incoming students.
Denison and Davidson are unaffected by the same level of embarrassment but are well regarded liberal arts colleges that may be anxious to keep up the inflow of applicants and percentage of those accepted who attend.
The brutal fact is that higher education as an industry has exploited the desperation of parents and student borrowers to get a leg up on pursuing prestigious and remunerative careers via admission to a college that is regarded as prestigious — if not in acquiring a job directly out of college, then by gaining admission to a competitive postgraduate professional or academic institution. Because companies are constrained in screening job applicants by using intelligence testing (racially discriminatory, don't you know), the prestige of an applicant's undergraduate degree has been used as a proxy measure. Allowing the use of such testing would further dry up the pool of applicants willing to endure extortionate tuition in hopes of getting a better job.
There is a huge amount of fat that could be cut at practically every college, especially among academic administrators, but in our race-obsessed era, the huge numbers of diversity-related administrators have levels of job security far beyond any possible merit they may possess. But if and when more schools follow the example of the few named here, we may finally start to see shrinking the dead weight of administrators.
At least a self-described recovering academic can dream.
Hat tip: Don Surber.