Many institutions boasted, in the admission season just ended, that they had received record numbers of applications. What most very carefully didn’t say was that record numbers of applicants are lining up to be accepted.
That’s because the number of students is actually down by 2.6 million since the last peak in 2011.
Economics 101 suggests that declining demand results in lower prices.
In one sense, that’s happened. A study released last month by the National Association for College and University Business Officers shows that colleges and universities now give away a record half of their tuition in the form of discounts and financial aid for freshmen.
But advertised prices continue to outpace inflation. And colleges have been careful to avoid talking about their enrollment woes, meaning only the savviest consumers know they can negotiate to lower their bills.
Meanwhile, they have struggled to reduce their costs, something higher-education institutions generally never had to do when they enjoyed a seemingly unending supply of customers.