COLLEGE TUITION AND ENROLLMENT

Direct Relationship Between The Increase In College Tuition And A Decrease In Enrolment

Direct Relationship Between The Increase In College Tuition And A Decrease In Enrolment

Introduction

The increase in college tuition is directly proportional to the decrease in the enrolment. Establishing tuition rates at institutions of higher learning is always of fundamental strategic importance to college administrators who are suffering adverse financial effects from reduced allocations from external sources and increased educational and facility costs. Innovative reactions to these environmental conditions are needed to avoid institutional decline.

Hypothesis

This research paper explores the relationship between the increase in college tuition and a decrease in enrolment.

Research Question

How does increase in college tuition result in decrease in the enrollment?

What is the relationship between the college tuition and the enrollment?

Literature Review

Colleges have responded by becoming more sophisticated in their use of tuition pricing as a positioning device.

Jackson and Weathersby evaluated seven "price sensitivity of demand" studies that followed Ostheimer's pioneering work of estimating higher education demand among potential enrolees. Results showed that cost to the student is a significant variable with a negative impact, but the magnitude of the price effect was found to be very small. Other review articles and individual studies confirm this finding.

Human resource Management

Most of these studies were based upon groups of institutions from national data bases. Only a few studies have investigated the demand for education at particular institutions. None dealt with the retention effect of various tuition increases on current students. This becomes difficult for HR managers to make the planning of management of college students.

SWOT Analysis

Strength

They have considered the effects of students' ability to pay, institutional student aid, and expenditure plans on enrolment rates. However, no researcher has developed a tuition pricing model based on students' willingness to pay. Such a model would assist college decision makers in establishing tuition rates.

Weakness

All tuition pricing models should include cost and revenue inputs so that administrators can evaluate prices based on projected net earnings. Cost reductions and revenue enhancements are needed to remain solvent. Both options should be investigated as opportunities for increasing net earnings from the current student population. In this article we focus on the revenue enhancement option.

Opportunities

Increasing the tuition rate is one among many revenue enhancing options. However, this tactic raises the question of how current students will respond to a higher tuition rate if there is not an equal increase in their financial aid. ...