Title

Private Colleges' Net Tuition Outpaces Publics' Growth

November 15, 2018
 
 

Median net tuition is expected to grow by 2.8 percent at private nonprofit colleges in the 2018-19 academic year, nearly double the 1.5 percent rate of increase for public institutions, according to an annual report released this morning by Moody's Investors Service.

Moody's publishes an annual report examining tuition and enrollment trends at the institutions the service rates (which skews toward the larger and wealthier end of the higher education spectrum) and their anticipated impact on the campuses' finances. This year's report shows that comprehensive and medium-size universities are driving the strengthening tuition revenue growth for private institutions, which is the highest since 2013. Comprehensive privates can expect median growth in net tuition revenue of 4.2 percent, compared to 1.6 percent for small four-year private institutions.

Nearly one-fifth (19 percent) of the private institutions rated by Moody's reported tuition discount rates for first-year students of between 60 and 80 percent, up from 13 percent in fall 2017. "Rising first-year tuition discounting indicates that the total discount rate will continue to rise beyond fiscal 2019," Moody's wrote. "The fiscal 2019 total median discount rate is projected at 39%, which is about 5 percentage points higher than the fiscal 2014 median."

Moody's notes that its report is unable to answer some questions about the suppressed net tuition growth for public institutions, which continues a steady decline since 2011. Its analysis cannot gauge how much of the slow growth is due to market forces (competition for students) versus mandates or pressure from states to freeze or limit tuition increases.

And the degree of damage done to public university budgets by the depressed tuition revenue depends to a large extent on whether or not state legislatures are replacing the forgone tuition revenue with increased appropriations. State funding is up in many states, but the increases are uneven.

Be the first to know.
Get our free daily newsletter.

 

 
+ -

Expand commentsHide comments  —   Join the conversation!

Opinions on Inside Higher Ed

Inside Higher Ed’s Blog U

What Others Are Reading

  • Viewed
  • Past:
  • Day
  • Week
  • Month
  • Year
Back to Top