College Business Model Starting To Adjust

[Sun Devil 92]

Yep,

With all that money from Obammy and others that left kids with a mountain of debt, colleges ran up their prices.

People appear to be catching on the market is starting to take over.

When will people learn ?

Is the College Business Model Unraveling?

Private colleges are offering deeper tuition discounts than ever before, hoping to lure more students and boost overall revenue—and it appears the strategy isn’t working.

Tuition-discount rates for first-time, full-time freshmen hit a record 49.1% in the current school year, according to preliminary results from a National Association of College and University Business Officers survey of 411 schools. That 2016-2017 figure compares with 48% in the prior year. At schools with fewer than 4,000 students—those for whom just a small shift in enrollment can have a big impact—the freshman discount rate was 50.9%.

The hefty discounts in sticker prices signal how pricing power is shifting from schools to students and their families as some grow skeptical about the value of a costly college degree.

 

[Sun Devil 92]

Of course, if you read the article, you'll see that colleges are all about "free tuition". That's how they'll continue to exist.

I like Bernie, but on that point he's smoking grass.

 

[Sun Devil 92]

There is a bubble logic at work here. Marginal institutions are afraid to cut sticker prices, because many parents and students see high tuition as a mark of prestige. So colleges are forced to simply offer an increasing array of credits and scholarships to induce students to enroll, even as they keep jacking up tuition to keep pace with competitors.

But as the WSJ story suggests, it may be that pent up demand for higher education has already peaked. That could mean the whole industry is in for a disruptive adjustment.

 

[Manonthestreet]

household debt levels continue to rise..........