Facing Enrollment Declines, Colleges Seek Out New, Creative Ways To Make Money
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This spring, there were 1.7 million fewer college students, both undergraduate and graduate, than back in 2011 - a decline of 9 percent. That's according to the National Student Clearinghouse. And because private colleges and universities are losing students, they're having to innovate to find new ways to make money. Cardiff Garcia and Sally Herships of the Indicator from Planet Money have the story.
SALLY HERSHIPS, BYLINE: Colleges and universities have a secret. Ivies aside, it's not as hard as they want you to think to get in.
JON MARCUS: I see this in my own family. The stress that high school students are put under in the belief that they can't get in anywhere isn't true.
CARDIFF GARCIA, BYLINE: Jon Marcus is the editor of the Hechinger Report. He says that many schools are so desperate to fill seats that they're going to cut you a deal. They're going to offer you a tuition discount. The average school now puts 49 percent of its revenue towards financial aid.
MARCUS: If you were a private business and you had to give back 50 percent of your revenue in discounts, you'd be out of business.
HERSHIPS: So schools are being forced to innovate, like Niagara University located at the beautiful Niagara Falls.
MARCUS: Very busy place in the summer when the college isn't open, so Niagara University this summer put its dorms on Airbnb for $129 a night and made a little bit of money out of it. And in charge of this - put a bunch of hospitality students...
GARCIA: Strategy No. 1, entrepreneurship. The hospitality students get academic credit, and the school makes some money. Then there's strategy No. 2, tapping into brand equity.
MARCUS: There are 48 colleges and universities that have licensed their logos - this is my favorite - for caskets. So if you are really, really loyal, you can be buried in a casket with its logo on it.
HERSHIPS: Luckily, there is another strategy - maximizing profits. Schools are trying to fill up the empty seats in their classes - not for credit, of course, except for the school's bank account.
GARCIA: And this is similar to strategy No. 4, growing their offerings.
MARCUS: As they have seen their enrollment decline, a lot of colleges and universities have decided that the best way to enroll more students is to offer more stuff.
HERSHIPS: This is an area of massive growth. Schools are offering new programs like the certificate. You can get a certificate in public relations or graphic design, but certificates are not traditional college diplomas.
GARCIA: They're also not certifications, which is what doctors get when they are board certified or what you need to become a CPA, a certified public accountant.
HERSHIPS: Then there are new degrees.
MARCUS: From 2012 until now, colleges and universities collectively have added - and this is an extraordinary number - 41,446 new degree or certificate programs.
HERSHIPS: If you offer a hot new degree like cybersecurity, you could attract new students. But then there are other degrees, like casino management.
MARCUS: There have been 15 new casino management majors instituted at colleges and universities around the country. Those 15 programs in casino management collectively graduated last year 34 students.
HERSHIPS: Why are schools so bad at this?
MARCUS: Yeah, look, I'm not a business person, but neither are they. And I'll tell you as a lay person who covers this stuff, you're right. Colleges are really bad at this. They've never really been subject to market forces, and they're not entrepreneurial by nature.
HERSHIPS: But they are now. They're innovating.
GARCIA: Not enough to impact tuition, but I guess maybe if we all started buying branded caskets. Sally, you first. Cardiff Garcia.
HERSHIPS: Sally Herships, NPR News.
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