U.S. College enrollments are down. But revenue is up. What happened? | Wednesday Morning Coffee

Long story short: Rising tuition costs that outpaced inflation, according to new data

By: - December 7, 2022 7:04 am
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Nothing is certain but death, taxes … and college tuition?

Some new data suggests that it might be time to give Benjamin Franklin’s careworn axiom a fresh coat of paint.

That’s because, while U.S. college enrollment has dropped by 3.1 million students over the last decade, annual tuition revenue has shot up by $6.9 billion during the same time period, according to an analysis by the industry trade publication My eLearning World.

Tuition rates that have dramatically outpaced inflation have sent students in search of less costly alternatives, including coding boot camps and online options, the analysis suggests.

Even so, while enrollment has declined by 15.3 percent since 2012, colleges and universities still are taking in 2.54 percent more in total revenue from the tuition-paying students who remain, the analysis showed.

Bar graph showing contrast between college enrollment and rising tuition
(Source: My eLearning World)

More than 20 million students were enrolled at U.S. colleges and universities a decade ago, according to the report. By fall 2022, that number had plummeted to 17.1 million students, with the sharpest declines coming at the height of the COVID-19 pandemic.

Enrollment dropped from 18.2 million students in 2019 to 17.7 million students in 2020, then declined further to 17.3 million students in 2021, according to the analysis. Overall, U.S. colleges and universities notched a loss of 3.1 million enrolled students over the last decade.

At the same time, however, “total annual revenue for U.S. colleges from tuition and fees has increased by at least $6.9 billion over the last decade,” the report’s author, Scott Winstead, wrote.

Here’s how that broke down, by category:

  • Community colleges: In 2012, two-year colleges had an average tuition of $3,560 for a full school year, pulling in $23.9 billion in revenue (6.7 million students). In 2022, community college tuition only rose a bit to $3,860 per year, for a total of $17.9 billion in tuition revenue (4.6 million students). It’s worth noting that two-year colleges are the only type of school to lose tuition revenue over this time period.
  • Public universities: In 2012, four-year public universities had an average in-state tuition of $9,780 for a full school year, pulling in at least $76 billion in revenue (likely higher as out-of-state tuition rates are higher, but data on enrollment numbers for in-state vs out-of-state was unavailable for the 7.8 million total students). In 2022, public university tuition at four-year schools rose to $10,940 per year, for a total of at least $83.6 billion in tuition revenue (7.6 million students).
  • Private universities: In 2012, private universities had an average tuition of $32,790 for a full school year, pulling in $169.8 billion in revenue (5.2 million students). In 2022, tuition for four-year private universities increased to $39,400 per year, for a total of $175 billion in tuition revenue (4.4. million students),” Winstead wrote.

“While some might assume that losing millions of students would cause a decrease in revenue, our analysis revealed that hasn’t been the case at all,” Winstead observed.

(Source: My eLearning World)

With the cost of college and university tuition rising at nearly five times the rate of inflation over the last 50 years, pricing out a “significant segment of their target audience,” most institutions would “adjust prices to try and recapture these lost customers,” Winstead wrote.

But with schools bringing in more revenue — with fewer paying students — there appears to be little incentive for that to happen, Winstead argued. And it’s not clear when — or even if — that will change.

“In the meantime, many young adults are even opting to get career training on online learning sites like CourseraUdemy, and Skillshare at a fraction of the cost of college (but without the prestigious degree),” he wrote

“Perhaps the schools will eventually figure out the right balance between tuition costs and enrollment numbers, but until then, the enrollment decline trend will likely continue,” Winstead concluded.

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John L. Micek
John L. Micek

A 3-decade veteran of the news business, John L. Micek is the Pennsylvania Capital-Star's Editor-in-Chief. An award-winning political reporter, Micek’s career has taken him from small town meetings and Chicago City Hall to Congress and the Pennsylvania Capitol. His weekly column on U.S. politics is syndicated to 800 newspapers nationwide by Cagle Syndicate. He also contributes commentary and analysis to broadcast outlets in the U.S., Canada and the U.K. Micek’s first novel, “Ordinary Angels,” was released in 2019 by Sunbury Press.

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