Tuition Revenue Growth at U.S. Universities Slowest in a Decade

Jim Liebelt | Senior Writer, Editor and Researcher for the HomeWord Center for Youth and Family at Azusa Pacific University | Wednesday, December 10, 2014

Tuition Revenue Growth at U.S. Universities Slowest in a Decade

*The following is excerpted from an online article from Bloomberg.

Revenue that U.S. colleges and universities collect from tuition is growing at the slowest rate in a decade, according to Moody’s Investors Service.

Public universities expect a 1.9 percent increase in net tuition revenue while private nonprofit schools are forecasting average growth of 2.7 percent this academic year, Moody's said in its annual report. The sluggish growth is the result of smaller freshmen classes combined with the public's greater scrutiny of the cost of going to college, Moody's said.

"A significant and growing number of public and private universities are experiencing notable challenges," Moody's wrote.

Many universities limited tuition increases this year while further boosting discounts they offered to attract students, Moody’s said. A quarter of public and private colleges are projecting declines in net tuition this academic year, it said in the report, whose results were derived from 170 schools that responded to the survey.

The weakness in tuition revenue is particularly intense at schools located in the Midwest and Northeast, where the pool of graduating high school students has been declining for several years, Moody’s said. Many public universities also face legislative mandates to hold tuition flat for in-state students, it said.

Source: Bloomberg