Tuition Growth Slows

Moody’s annual survey of US college and university tuition shows that tuition increases are slowing down and for the most part are consistent with the overall inflation rate in the economy.

On the private school side, Moody’s projects annual net tuition increases to remain in the 2-3% range and says that tuition growth will continue to be constrained by “a highly competitive environment and a continued focus on affordability.”

Public university net tuition revenue is projected to grow by a median 2%, down significantly from the 8% rate of a few years ago. This is attributed primarily to state actions to limit tuition increases for in-state students.

Net tuition is the factor under consideration here, so it’s worth looking at why net tuition is going down. The report shows that the median tuition discount at private schools is 47% currently. Furthermore, Moody’s analyst Erin Ortiz says, “Approximately half of small and moderate-sized private universities project freshman discount rates in excess of 50% for Fall 2016, and nearly two-thirds of all private universities indicate that the freshman discount rate will rise relative to Fall 2015.”

While this is all good news, let’s take a moment to remind ourselves that median and average outcomes don’t mean that everyone gets that outcome. Larger, comprehensive universities that offer a wide range of courses of study and have valuable brands remain able to hike tuition without losing students. Smaller schools, particularly those faced with declining enrollment, are more likely to be discounting tuition in order to aggressively recruit students.

Read the full overview here, and then go out and identify some schools that will want to aggressively recruit your student.