Will College Acceptance, Tuition Rates Change as Competition for Students Increases?

I remember applying to college for the first time over 15 years ago. It was a scary experience, even though I had the grades and a dance card full of extracurricular activities to qualify for most any school I wanted to go to (note: I didn’t aspire to be Ivy League). I applied to only three colleges, yet a fourth — Northwestern University — was at the top of my list due to its high-rated journalism school, but I chickened out at the essay process and never finished my application. I got into all three other schools, and happily chose Bradley University for my undergrad. Four years later, I applied to only one small, selective graduate school program (hi, Public Affairs Reporting alumni!) and got in — a little less scared this time, but only because the competition somehow seemed less intense.

What’s it like for students today? Are they as worried as I was about getting into their dream school? Do they even have one?

Well, as expected, a lot has changed in the last year or two, let alone 10 since I stepped foot on a college campus as a student. Let’s take a look at some of the recent trends, challenges, and opportunities I discovered during my latest update of the D&B First Research industry report on Colleges & Universities.

Challenge: Struggle to Fill Classes

According to the National Association for College Admission Counseling, many colleges today are not only failing to fill their new classes by their traditional target date each year (May 1), they are failing to do so even a month or two later. 2018 marked the third year in a row that fewer than 40% of colleges hit the May 1 goal; however, public doctoral institutions have seen a recent boom in applications and are somewhat bucking this trend. An Inside Higher Ed/Gallup survey recently conducted of college and university admissions directors showed continuing pressure on colleges to hit their enrollment targets “in an era when missing enrollment targets can be devastating to institutional finances.” That said, more than two-thirds of colleges admit just 5% of their waiting-list students while waiting lists continue to grow. Attracting international students is also a big concern, with new international student enrollment in the US on the decline, according to the Institute for International Education.

Opportunity: Saying Goodbye to SAT/ACT

Raise your hand if you ever obsessed over your SAT or ACT scores in high school. According to the same Inside Higher Ed/Gallup survey, many college admissions leaders no longer value these tests — in particular, the writing portion. In fact, many believe that the emphasis on testing discourages students from considering certain colleges (hand still raised, here), and the recent decision by the University of Chicago to end its SAT/ACT requirement may lead other academically rigorous colleges to follow suit. Although it was separate from an SAT/ACT essay, I can’t help but wonder how my life may have been different (for better or worse) if I could have gotten past my fears of Northwestern’s essay.

Trend: Early Admission and Financial Aid

Those who apply early to college might have better luck getting into their dream school, especially a selective private college, but they also might have a harder time paying. Per the National Association for College Admission Counseling, nearly 60% of early decision applicants were accepted in fall 2016. At schools with early decision policies, the overall admissions rate was just 48% the same semester. Students who commit to early decisions rate their first-choice college and accept its financial aid package and enroll if admitted. They are unable to negotiate financial aid, and many schools who offer early decision do not offer any merit aid.

Challenge: Declining Birth Rate and Tuition Costs

In just two years’ time, private, nonprofit degree-granting institutions have gone from receiving about 30% of their income from tuition and fees to nearly 40% today, according to the National Center for Education Statistics. As both public and private colleges rely more on tuition and fees for their revenues over federal or other sources of funding, they may also be dropping those costs soon. The college-going population could decline by 15% between 2025 and 2029 and decline another percentage point or two each following year, according to the Hechinger Report. Demand for top colleges in the US is predicted to fall less, while regional four-year institutions may lose more than 11% of students in the next decade. The Northeast, because of its high percentage of colleges and universities and relatively low birth rate, is expected to be hardest hit. Some colleges have already been slashing tuition fees by 30% or more in the wake of declining enrollment figures and price sensitivity.

Industry Impact

Colleges and universities may need to review their tuition costs and how they market to students as the US birth rate declines. Early admission and waiting-list students may be a focus area for growth, in addition to finding ways to recruit more international students. Easing requirements for testing scores also may help increase enrollment, but schools will want to be careful to consider graduation rates and other standards that may be affected.

Of course, this list isn’t exhaustive. There are many other things going on in the world of colleges and universities, from colleges being out up to $400 million in Perkins Loan repayments to student loan debt in some US states surpassing mortgage debt.

For more of the latest higher education trends, view Dun & Bradstreet’s industry profiles on Colleges & Universities, Community Colleges, and Education & Training Services.

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Amber Krosel is an editor at Dun & Bradstreet, where she reports on emerging trends in industries including food and beverage, education, and government. Follow Amber on Twitter.

D&B Editorial is an in-house team that creates indispensable company, industry, and IT reports found in D&B Hoovers, First Research, and other D&B products. Industry profiles cover key challenges, trends, and opportunities, while company and CRUSH reports cover strategy, financials, and technology developments.