The following chart[1] shows that private colleges are no longer getting a positive return on tuition discounts because full-time enrollment (FTE) exhibits a long-term negative trend in growth. Therefore, it is inefficient to continue increasing tuition discounts because they are not attracting more students. There are two unfortunate outcomes of decaying enrollments from ever-larger tuition discounts:
- Falling enrollments generate less tuition revenue.
- Rising tuition discounts yield smaller cash flows from each student.
This suggests that private colleges with fewer than 2,000 FTE must find a new strategy to increase revenue and cash flow. New strategies could include:
- New academic programs
- Partnerships with other colleges or local agencies
- Contracts with businesses
- New athletic programs
Alternative to revenue-generating strategies to manage cash flow would be to:
- Cut costs
- Sell off unused property
- Consolidate offices and sell surplus buildings
- Look for expense sharing with other colleges
Is your institution feeling the strain of unsustainable tuition discounting? At Stevens Strategy, we specialize in helping small private colleges chart a sustainable path forward. Whether you need to rethink your academic offerings, identify new revenue streams, or right-size your operations, our expert team partners with you to build a custom strategy rooted in data, mission, and long-term resilience. Let’s talk about what’s next for your institution.
[1] The chart used IPEDS data for private colleges offering a four-year program for the years 2017 to 2023 with an enrollment less than 2,000 FTE. During that period, there were 473 private colleges, which was 54.5% of a total data set that included colleges larger than or equal to 2,000 FTE.
