Moody's: Tuition Revenue Growing Slower Than Inflation

November 19, 2014

Enrollment declines and the inability to increase actual tuition charges are putting pressure on colleges’ bottom lines, a new report by Moody’s Investors Service makes clear.

Net tuition revenue will be unlikely to exceed inflation at half the public universities and 40 percent of the private colleges Moody’s surveyed. Moody’s received replies from 170 private colleges and universities and 120 publics.   

At the same time, smaller entering classes foreshadow continued and future strains on higher education revenue. About 37 percent of publics and 45 percent of privates project enrollment declines in the current fiscal year, which began this summer for most institutions.

The flat tuition growth goes hand-in-hand with figures released last week by the College Board showing a decline in growth of advertised tuition prices, which are higher and often much higher than actual tuition revenue because of discounts colleges offer to their advertised price in the form of scholarship awards.


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