When is a college acceptance letter not a college acceptance letter? When a school suddenly realizes that it has 800 more freshmen than it knows what to do with. This is what happened last month at the University of California, Irvine, which—in an effort to reduce that number—started rescinding offers of admissions to kids who had not kept their GPA high enough or who had failed to submit a final high school transcript by the deadline.
The first group of students was not very significant and, of course, they had only themselves to blame. But among the second group, there was an uproar. Sending a final transcript was a mere formality and, at any rate, it was the high schools’ responsibility to send it in. As an editorial in the Los Angeles Times noted, “Failure to meet the deadline for a single document out of the reams of paper demanded during the admissions process calls for a little proportionality on the part of the university.” And eventually the school’s president relented.
The real question is not who came up with this dumb solution to what will be the school’s overcrowding problem this fall. It’s how the admissions office could have so vastly underestimated UC Irvine’s “yield,” that is, the number of accepted freshmen who decided to enroll.
There are a lot of factors that go into a school’s yield rate, starting with the question of which students a school admits in the first place. Some schools don’t want to admit too many kids who really won’t come. That’s why they make students write them love letters, sorry, admissions essays that explain how much they adore that specific college, instead of using a common application or a more generic essay.
But the real factor in determining a yield rate is what other schools a student might be considering, and here schools like UC Irvine—public universities that offer students a decent education at a lower cost—are increasingly at an advantage. According to College Scorecard, a website developed by the Department of Education, students at UC Irvine are paying an average of $12,771 a year in tuition, well below the national average of $16,127. Meanwhile, graduates earn an average starting salary of $54,500, well above the national average of $33,500. This is what we call more bang for the buck.
Part of this difference is due to the fact that many students are paying in-state tuition. And some of the school’s most popular majors—biology and economics—are likely to net higher paying jobs for graduates. Nevertheless, if you compare a school like UC Irvine to, say, Boston University, which holds the same U.S. News ranking—39th among national universities—you’ll see a clear difference. Boston University students pay an average of $34,592 a year for their education and earn $59,500 upon graduating. The BU name clearly adds something to students’ success, but families may start to question whether that luster is enough to justify a much higher price tag. The same could be said about Tulane, also tied for 39th place, whose average cost is $34,740 and average starting salary is $52,900.
“There is a race towards high-quality, low-cost schools,” says Richard Vedder, who heads the Center for College Affordability and Productivity. There will always be a market for expensive private schools at the very top. The name will always be worth something, there will always be a deep-enough bench of families willing to pay full price, and for the rest the schools will have a big enough endowment to subsidize tuition and housing. But for schools in the second and particularly the third tier, parents and students increasingly cannot see the point.
Which is why many of these schools have been struggling in recent years. According to a recent study by the National Association of College and University Business Officers, “The estimated average institutional tuition discount rate for first-time, full-time freshmen at small institutions was 50.9 percent in 2016-17.” That means colleges are getting less than half of the tuition they want. And it’s not only that net tuition is actually falling once you account for inflation; many of these schools are starting to face a declining student population.
As demographic researchers at the University of Virginia noted on their website StatChat, “Enrollment peaked in 2011. In July of 2011, there were about 18.1 million people in the prime college years of 18-21. In June of 2014, that number was down to 17.4 million—nearly 700,000 fewer young people. . . . Not only are other options opening up for high school grads, but there are also just fewer warm bodies to go around.”
So small private schools are closing. Saint Joseph’s College, a 900-student school in Indiana, announced in the spring that it would close this year, the result of “dwindling financial resources.” Vermont’s Burlington College closed last year. And other colleges are having to tighten their belts. Northland College in Wisconsin announced an across-the-board 7.5 percent pay cut for faculty and staff. Creighton University in Nebraska just cut 60 non-faculty positions.
This spring a few colleges started to offer students higher amounts of financial aid after the May 1 deadline, when they may have already committed to another school. This is considered a no-no among admissions officers, but some colleges are getting desperate enough to bargain. Unfortunately for these institutions, even lowering tuition further may not be enough to get students to choose them. As Vedder notes, “there is a flight from lower-quality schools—both low-cost public and high-cost privates. Financial returns for college investment are increasingly seen as becoming very low at the low-quality schools. A college diploma is no longer enough: You need a quality diploma.”
The drive toward universal higher education has had foreseeable consequences. When everyone has a college degree, a college degree is not worth what it once was. But for the schools that can actually teach kids something useful without raising tuition through the roof—well, they may want to consider adding another freshman dorm or two.D
Naomi Schaefer Riley, a senior fellow at the Independent Women’s Forum, is the author of The New Trail of Tears: How Washington Is Destroying American Indians.
