Moody's predicts modest growth in tuition revenue
- Moody's Investors Service says that colleges and universities are projected to see a 2% increase in tuition revenues for FY 2017, which mostly matches inflation estimates and continues a multi-year trend of revenue decreases in the industry.
- Private and public institutions are expected to grow at similar rates but will be hampered by tuition discounts for incoming freshmen, even with total enrollment expected to increase in most regions with the exception of the Midwest.
- Affordability strategies like tuition caps and reduced appropriations will also limit revenue growth for campuses nationwide.
The financial projections for the industry are modest in light of how federal support for higher education may dramatically shift within the next few months. There is a rising sense that even though higher education is still the primary tool for upward mobility, that there need not be as many options to get the access as currently exist — and if for-profit institutions and small liberal arts colleges can be quickly disposed of, it opens the door for stronger support of state flagship schools and elite private colleges.
With potential changes to federal loans and grants, research disbursements and financing programs, tuition may no longer be enough of a revenue source to sustain institutions, especially those seeking to expand programming for adult learners, technological upgrades and seeking to introduce new degrees to match industrial needs.
- The Chronicle of Higher Education Moody’s: Colleges can expect another year of low growth in tuition revenue