Private Institutions Steal Market Share from the Publics

Jan 21, 2009

A couple of weeks ago I read an interesting article from Inside Higher Ed about College Affordability. This led me to investigate the work of the Delta Project, a non-profit organization examining the costs and accountability of higher education. While I am still digesting many of the reports on the Delta Project website, one table showing enrollment market share by Carnegie Classification jumped out at me.

The authors of the study note that there is a shift in market share toward private institutions during a five year period from 2002 – 2006. So why did such a shift take place?

According to the Delta Project:

  • At public research universities, nearly all of the revenues from student tuition increases from 2002 to 2006 (92 percent) were used to offset revenue losses from other sources, primarily state appropriations. At public master's institutions and community colleges, all of the revenues from increased tuition during this period replaced losses from other sources.
  • At private colleges and universities, tuition increases fueled increased spending. Nearly three-quarters of educational spending increases at private research universities from 2002 to 2006 can be linked to increased tuition.

Thus, the argument is that private insitutions are providing greater value for the dollar as they increase services with revenues from tuition dollars, while public institutions are only modestly improving services as they are forced to use tuition revenues to offset declining state revenues.

While I have not yet read the entire study, I'm intrigued by this proposition. Yet, I can't help but wonder if there are other forces at work that the authors may or may not have considered.

What are the macro-economic forces at work during this time? How do increases in adult enrollment factor in to the equation? Are helicopter parents more likely to send their children to private institutions than previous generations of parents?

These are some of the critical questions that I'll have in the back of my mind as I read through the rest of the report.


Category: Blog, Higher Education