Is your college worth the money? This is the question potential students (and their parents) will ask themselves as they go through their decision process.
When choosing a college, students undoubtedly take a lot of factors into consideration – including strength of academics, majors available, sport programs, and campus life. But now, more than ever, students are expecting the “value” of their higher education to reflect their own personal goals and lead to greater financial success. Today’s students see themselves as consumers, and they want the college that they “buy” to be “worth the cost.”
But with few colleges willing to rebrand themselves to attract these new consumer-students, a “value gap” has developed. (Don’t think that sounds so bad? Check out our infographic below to see some statistics in action.) Luckily, there are methods for closing the higher education value gap that continues to widen, and capture the attention of consumer-students.
First, let’s look at some of the leading causes for the development of this value gap.
Household income is down significantly and college tuition is way up.
Income is stagnant and net worth is down, even though tuition continues to rise. According to the U.S. Census Bureau, median household income had practically frozen since the beginning of the Great Recession in late 2007. In fact, income was down slightly from 2007 to 2011, to $50,054. Median net worth, on the other hand, is down by over one-third since a height in 2005, which also reflects a drop in home equity and other assets.
College tuition, on the other hand, rose over 40 percent in only a decade. According to the Department of Education and National Center for Education Statistics, as of the 2010-2011 school year, average undergraduate tuition and fees across all degree-granting institutions topped $9,900 per year. Increases in student loans have mirrored the rise in tuition almost exactly. But without an increase in household income, nearly one in ten students are defaulting on those loan payments within the first year of repayment.
The perception in the value of a college degree has decreased, so many families are experiencing greater difficulty in justifying the expense of a college education.
Financial considerations are significantly affecting college choices, and the amount of tuition students are willing to pay. The typical American family is only prepared to cover 30 percent of their child’s college costs, according to Fidelity Investments. Nearly two-thirds of all first year students admitted that the current economic situation significantly affected their choice in colleges, and 69 percent of families eliminated colleges they considered outside their financial reach.
Those considerations are clearly reflected in the colleges and universities chosen by students. According to College Board, half of all full-time students attend an institution with published tuition and fees less than $10,282. Only 16.7 percent of students attend schools with tuition and fees over $30,000 per year.
Families who are still planning to send their children to college are reevaluating the price they are willing to pay and are seeking greater results for their investment.
In short, when the perceived “worth” of education decreases, it’s the outcomes a college can offer that translate into value. Since 2008, the first recorded year of the recession, the percentage of adults in the U.S. who believe a college education is a worthy investment has decreased by almost one in four. Right now, money is better spent elsewhere. According to TIME/Carnegie Corporation, 80 percent of U.S. adults think the education offered by most colleges is not worth what it costs. Over half think the average debt load for college students who take out loans is too high.
On the other hand, students who are attending college are overwhelming going for the same reasons. Of the two most common responses of first-year students in 2012 when asked what reasons were “very important” for going to college, 88 percent said “to be able to get a good job,” and 75 percent responded “to make more money.”
But there are things that small, private colleges can do to capture the attention of consumer-students.
This means, in closing the higher education value gap, small colleges need to remain responsive to the academic interests and goals of students. Communicate the worth of the experience your institution provides, both inside and outside the classroom. Provide proof that your programs are relevant to industry needs, and will lead to successful careers directly following or soon after graduation. And above all, design and position your programs to be distinctive and stand out amongst the crowd.
Small colleges need to be something special, and show prospective students that your college is worth the cost.
The Parish Group has achieved positive results for our clients. Contact us today to find out what we can do for you.
(Click to enlarge.)
Data adapted from the following sources: U.S. Census Bureau, Department of Education and National Center for Education Statistics, Fidelity Investments, Sallie Mae Corporation, CIRP, College Board, COUNTRY Financial, and TIME/Carnegie Corporation.