Illustration of people rolling out a red carpet

Affordability Concerns Reshape Private Colleges’ Competitive Landscape

As more and more families examine the cost they are able and willing to pay for a college education, the opportunity to pay less for a bachelor’s degree by starting at a community college is on the radar of even those who would prefer a private college education. A study released this month calculates the financial advantage of this path, even considering the loss of credits that can result from transferring from a two-year to a four-year institution.

But of course, cost is only one part of the value equation. The quality of the educational experience and its resulting outcomes also contribute to calculations of return on investment. Results from New America’s first annual “Varying Degrees” survey on higher education provide a snapshot of how Americans currently view all three elements of the value proposition:

  • Cost—Respondents who are currently college students were less likely to feel “completely confident” they made the right financial decisions regarding how they are paying or paid for college (47%) compared to all other respondents (53%). Differences among the higher education sectors emerged when respondents were asked how much they agree that certain types of colleges are “worth the cost.” For example, the vast majority (82%) strongly or somewhat agree that two-year community colleges are worth the cost, and for four-year public colleges or universities, 61% strongly or somewhat agree. But a minority (43%) strongly or somewhat agree that four-year private colleges are universities are worth the cost.
  • Quality—Respondents who are currently college students were less likely to strongly or somewhat agree that “higher education in America is fine how it is” (22%) compared to all other respondents (27%). All respondents were more likely to strongly or somewhat agree that two-year community colleges “always put their students first” (62%) than do four-year private colleges or universities (53%) or four-year public colleges or universities (52%).
  • Results—Respondents who are currently college students were more likely to strongly or somewhat agree that “it is easier to be successful with a college degree than without” (85%) compared to all other respondents (72%). Yet only 40% of respondents who are currently college students strongly agree that “most people who enroll in higher education benefit,” versus 42% of all other respondents. All respondents were more likely to strongly or somewhat agree that two-year community colleges “prepare people to be successful” (80%) than do four-year public colleges or universities (77%) or four-year private colleges or universities (75%).

In some ways, this is cautionary data for private colleges and universities that have presumed their advantage in messaging the personal attention and relevant preparation they provide in order to justify their higher cost. Apparently, this advantage is not automatically perceived by the general public. Yet it must be communicated consistently—not only to students entering college for the first time, but also to those transferring to a four-year institution after attending a two-year institution.

 

Positive View of Two-Years

Generation Z (ages 18 to 22) respondents to the “Varying Degrees” survey were the most likely to agree strongly that community colleges are worth the cost. (New America)

New Transfer App 

Common App has developed a new application to four-year institutions especially for returning adult students and community college students. (Common Application)

Tuition Price Sensitivity

New analysis of the Independent College Presidents Survey, a Lawlor-RHB collaboration, highlights affordability and tuition discounting concerns. (Higher Ed Intelligence)

 

Lawlor Recommends

Senior leadership at traditional private colleges and universities must open their eyes and ears to the shifting economics of the higher education marketplace. As more students who are admitted to four-year institutions instead start at two-year institutions for financial purposes and then transfer, private colleges need policies and communication strategies to welcome them.

Marketing initiatives that are targeted especially to the transfer student segment can be a focused, market-smart way to generate and facilitate increased interest. Student services that cater to transfers once they’re on campus also matter. And at some institutions, the final “welcome” piece to fall into place is the faculty’s regard for transfer students. Professors should recognize that a transfer-friendly curriculum is probably in order given these changes in the marketplace—when students who are academically capable of starting at a private college choose to (not have to) start at a community college as a strategic financing plan.