Public discourse around the increasing cost of college and the student debt crisis has reached a feverpitch over the past five years. College and university administrators have responded to these concerns by increasing the amount of financial aid institutions provide to students: the average discount rate is now over 45 percent for private schools. This means that the average private college subsidizes students at a rate of $0.45 for every dollar of tuition it receives.
While this strategy has provided some short-term relief for colleges in their efforts to meet enrollment targets, most are missing the mark when it comes to what really drives student enrollment. Recent research shows that prospective students choose which school to attend based on the perceived value, rather than cost alone. In fact, admitted students who rate a school as a “very good” value are 40 percent more likely to enroll in that institution than students who rate the school as “average.” No other factor, including overall cost and availability of financial aid, has the same level of impact on a student’s decision to enroll.
To increase value, the equation is simple: schools can reduce costs, increase the educational benefit, or combine both approaches.
To date, colleges have focused on only one piece of this equation, going to great lengths to reduce costs to attract students. As a result, they talk about value in terms of tuition and financial aid, assuming that the benefits of a college education speak for themselves. Behind this simple equation, however, is the complex array of benefits that students and their families seek from their college experience.
Instead of fixating on costs alone, colleges also need to focus on communicating the main benefit that students care about: outcomes. The importance of career preparation and long-term professional success has surpassed the academic strength of the institution in driving students’ enrollment decisions.
When asked about specific benefits on which students and parents evaluate schools on, five of the top 10 are career-related. These include:
1. Being able to pursue a personally fulfilling career path.
2. Having skills that will enable them to enter a specific career.
3. Being adaptable for future careers and career changes.
4. Being able to conduct themselves in a professional manner.
5. Learning to apply academic concepts to real-world situations.
While students are looking for concrete examples of the benefits an institution provides, many colleges struggle to communicate effectively and often speak in academic shorthand that does not distinguish them from the field. It’s no longer enough to tout “small class sizes,” “a wide variety of majors,” or “an outstanding location.” The tuition discounting arms race has begun to bottom out, resulting in a real need for colleges to focus on the benefit side of the value equation. Schools that are able to communicate the outcomes they provide most effectively will pull ahead of the competition.
Heather O’Leary is a principal analyst with Eduventures, a higher education research firm based in Boston.