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Colleges Forecast Net Tuition Revenue Declines for Fiscal 2021

October 30, 2020
 
 

Median net tuition revenue will likely decline by 3.3 percent at private colleges and universities and by 0.9 percent at public colleges and universities in the 2021 fiscal year, according to a Moody’s Investors Service annual tuition survey of institutions it rates.

The data show negative net tuition revenue growth in both public and private sectors for the first time since 2009, when the tuition survey began.

“The effects of the pandemic -- including health and safety considerations among students, shifts in how universities are delivering coursework, and a sharp decline in international students -- will contribute to lower enrollment at both public and private universities,” Patrick McCabe, an analyst at Moody’s, said in a press release.

About six in 10 reporting public institutions project net tuition revenue declines in fiscal 2021, and three-quarters of private institutions predict the same. Drivers of public college declines include pricing constraints and softening enrollment. Drivers of private declines are lower enrollment and rising tuition discount rates.

There is some variation by institution size and type. For example, nearly 87 percent of small private colleges forecast a decline in net tuition revenue, compared with 74 percent of medium-size private universities and 64 percent of comprehensive private universities. Comprehensive public colleges predict net tuition revenue to remain flat in fiscal 2021, while moderate-size and small public colleges project 2 percent and 2.8 percent median declines in net tuition revenue, respectively.

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