Why falling demand hasn't brought down college sticker prices
hechingerreport.org
Why falling demand hasn't brought down college sticker prices
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Re: Why falling demand hasn't brought down college sticker prices
#2"Many institutions boasted, in the admission season just ended, that they had received record numbers of applications. What most very carefully didn’t say was that record numbers of applicants are lining up to be accepted."
I read this like 3 times, then the article, then again, but I can't parse it. What is it really saying here?
Re: Why falling demand hasn't brought down college sticker prices
#3"Many institutions boasted, in the admission season just ended, that they had received record numbers of applications. What most very carefully didn’t say was that record numbers of applicants are lining up to be accepted." I read this like 3 times, then the article, then again, but I can't parse it. What is it really saying here?
I am guessing that total applications are up while total numbers of applicants are down (and thus there are more applications submitted per person)?
Re: Why falling demand hasn't brought down college sticker prices
#4"Many institutions boasted, in the admission season just ended, that they had received record numbers of applications. What most very carefully didn’t say was that record numbers of applicants are lining up to be accepted." I read this like 3 times, then the article, then again, but I can't parse it. What is it really saying here?
I am guessing that total applications are up while total numbers of applicants are down (and thus there are more applications submitted per person)?
Probably one student would apply to more schools? So even though they had a ton of applications (each school would have seen a rise in # of applications), these schools are chasing down a fewer number of actual people.
When I was a student, I applied to 3 colleges (1 nearby, 2 far away), nowadays maybe students apply to 20 or 30?
Re: Why falling demand hasn't brought down college sticker prices
#5I only read the article (and not the podcast, if it's different) but I think their argument misrepresents how the economics of higher education work.
> "Economics 101 suggests that declining demand results in lower prices."
This isn't true for college sticker prices because colleges have perfect price discrimination. Most students don't pay the sticker price; they pay exactly what they "can".
In no other industry do we have such perfect incentives aligned on the provider side to increase prices--
- People who can't afford the higher prices can pay less, through financial aid and scholarship programs.
- To determine what is the "maximum" price you can pay, the student/parent voluntarily provides literally every data point possible. Every tax record, every loan, etc.
- Because of this perfect price discrimination, an upward trend in college costs (that outpaces inflation) is not only reasonable but expected. It's in the interest of the institution to maximize its surplus/profit to the student's upper limit.
Re: Why falling demand hasn't brought down college sticker prices
#6The article doesn't mention that middle management exploded at colleges in the last few years, and those people are going to try to hold on to their jobs no matter how low enrollment gets. http://blogs.wgbh.org/on-campus/2014/2/6/growth-nonacademic-...
Also I think the part about half of tuition at one school going to "discounts and financial aid for freshmen" is misleading. That's not really costing the college money, they're just charging less to begin with.
Re: Why falling demand hasn't brought down college sticker prices
#7"Many institutions boasted, in the admission season just ended, that they had received record numbers of applications. What most very carefully didn’t say was that record numbers of applicants are lining up to be accepted." I read this like 3 times, then the article, then again, but I can't parse it. What is it really saying here?
It says that a record number of applicants are applying to each institution but the number that are going to attend is lower.
Re: Why falling demand hasn't brought down college sticker prices
#8"Many institutions boasted, in the admission season just ended, that they had received record numbers of applications. What most very carefully didn’t say was that record numbers of applicants are lining up to be accepted." I read this like 3 times, then the article, then again, but I can't parse it. What is it really saying here?
Shotgun approach.
Similar to how people apply for a bunch of software engineer positions at a plethora of companies, when they only would really want to work for maybe 1/5 of them.
Back when I was a senior in high school there was a newer (at the time, I suppose) idea that college admission was a "crapshoot", so the common suggestion was to apply to a bunch of universities, even the ones you weren't very interested in as "backups" or whatever.
Re: Why falling demand hasn't brought down college sticker prices
#9I wonder how this drop in demand is distributed between American students who are eligible for financial aid and federally-backed student loans and foreign students who almost always pay full price.
As an anecdote from my own engineering school experience, a staggeringly large proportion of my classes were populated by foreign, usually Chinese and Indian, students. My college has a pretty good brand, and I understand many of these students were willing to pay to have its cachet on their resume. Also, many of these students, especially the Chinese ones, seemed to be from very well-off families (at least if the number of Canada Goose coats and Supreme hoodies is any indication).
This is an anecdote, so take it with a grain of salt, but it suggests a hypothesis: maybe the drop in demand is among American students who are mostly paying discounted prices anyway, while demand among foreign students who are willing and able to pay the staggering sticker price remains high.
Re: Why falling demand hasn't brought down college sticker prices
#10Earlier quoted context omitted.
I am guessing that total applications are up while total numbers of applicants are down (and thus there are more applications submitted per person)?
Probably one student would apply to more schools? So even though they had a ton of applications (each school would have seen a rise in # of applications), these schools are chasing down a fewer number of actual people. When I was a student, I applied to 3 colleges (1 nearby, 2 far away), nowadays maybe students apply to 20 or 30?
This sounds like a reasonable explanation, but do colleges have transparency into who applied where nationwide? I would expect a college to know the absolute exact number of its own applicants/applications, but beyond that it should be only an educated guess, as long as the SAT is not in the business of selling everybody their data. But then, who knows, maybe the SAT is doing exactly that.