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Higher Education Policy and Practice

Are Private Colleges Facing New Realities with Enrollment?

During the past several years there has been much discussion about changes that may eventually affect student choice in higher education. However, there has been little evidence that these changes have had an effect on enrollment. Now, there is some anecdotal support for the possibility that small private colleges are beginning to feel the effects of those changes.

Here is the evidence on which these concerns about changes in student choice are based:

  1. 4.9% of the high school graduates prefer a school with fewer than 2000 students. This could have a dramatic effect at most private colleges, which are typically small (from a seminar with College Board).
  2. The number of high school graduates in New England peaked in 2008 and will decline significantly over the next several years, which shrinks the already small pool for private colleges.
  3. Business majors, a staple of many colleges reached a peak in 2007-08 and began a decline the next year. That decline may have accelerated due to the effects of the recession and falling demand for general and financial managers. This decline magnifies the problem of declining enrollment for many private colleges because business acts as a default degree for many students (see the graph for Intended Majors).
  4. Annual change in the cost of attending colleges exceeds the annual change in disposable income, which is the source of most direct family support for education. Rising tuition hits tuition dependent small private colleges particularly hard when they try to attract students.
  5. Loans have replaced grants as the major form of supporting attendance at college resulting in heavier debt burden and possibly reduced net value of college attendance (see the graph for Types of Financial Aid).
  6. Females as a proportion of total students continue to predominate, while the proportion of males is slowly sliding downward for public institutions and remaining flat for private institutions. This suggests that as male attendance continues to remain flat that the chance of growing enrollment through male recruitment remains problematic (see the graph for Male and Female Enrollment Proportions).

Besides the preceding measures provided by the College Board’s current publication, College Landscape¹, there is other evidence that high school seniors prefer colleges located in an urban rather than a rural setting, more seniors are turning to less expensive public and community colleges, and the state of the economy continues to have adverse impact on parent or student college choice.

The result is a set of enrollment conditions that work together to reduce the probability that a student would select a small private tuition dependent college, in particular, a private college located some distance from a thriving urban area. The problem of attracting students may be compounded for colleges where business majors have represented the largest proportion of undergraduate and graduate enrollments.

There is anecdotal evidence from several small private colleges in Massachusetts that they are reporting dramatic declines in deposits for upcoming semesters. In addition, parents are taking a very aggressive stance concerning why they should send their child to an expensive private college rather than to a public four-year or community college. They even have asked admission officers to prove the value of the degree; i.e., do graduates of the college gain a large enough benefit so that students can quickly pay back the cost of financing their education?

Stevens Strategy is interested in hearing if your college/university has seen a major change in deposits or parents insisting that admission counselors prove the value of a private degree. Send us your remarks in the comment section of this blog.

¹http://professionals.collegeboard.com/data-reports-research/trends/higher-ed-landscape

Originally posted April 30, 2010

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