During Pandemic, 61% Of Colleges Saw Tuition Revenue Decline, According To New Report

During the initial part of the Covid-19 pandemic, 61% of higher education institutions in the U.S. saw their net tuition revenue decline. That’s one of the key findings of a new analysis conducted by the Chronicle of Higher Education, a leading publication covering the higher education sector.

Net tuition revenue is the amount of tuition dollars a college collects after subtracting the institutional financial aid and other allowances it gives to students. It’s the largest source of revenue for private four-year colleges, and it makes up $1 of every $5 in revenue received at public four-year institutions, according to the Chronicle analysis.

The study is based on data from the Integrated Postsecondary Education Data System (IPEDS), which the Chronicle gathered to examine net-tuition revenue from 2019 to 2021 at 3,400 degree-granting institutions that are eligible to participate in Title IV financial-aid programs.

The analysis also includes a searchable table that provides tuition revenue data for a smaller set of colleges - those with enrollments over 500 students and with tuition revenue greater than $500,000.

For example, a search of the Ivy League institutions reveals that Princeton University sustained the largest loss of net tuition revenue (-21%), followed by Harvard (-18%), Yale and Brown (-11% each) and Columbia (-6%). Cornell University saw a 3% increase, and Dartmouth College and the University of Pennsylvania each had a 1% net tuition revenue increase.

Most colleges saw their net tuition revenue drop during this period, but the declines were felt most often at two-year institutions, where more than 70% saw tuition revenue decreases. In contrast, 60% of public colleges and 58% of private colleges suffered drop-offs in their net-tuition revenue.

Those revenue losses roughly correspond to the enrollment declines experienced by colleges and universities during the pandemic years. According to estimates from the National Student Clearinghouse Research Center, total enrollment at degree-granting institutions, counting both undergraduate and graduate students, decreased between 2019 and 2022 by about 1.11 million students, and it dropped from 19,949,828 to 18,155,619 in the five years between 2017 and 2022, a 9% decline.

What’s that equate to in student headcount? About 1.8 million fewer students during a period that stretches across the two years before the Covid-19 pandemic through the three years when it was at its worst. Even with a modest bounce back in new freshmen enrollments in fall, 2022, total higher education enrollment fell every year during that five-year span.

From 2020 to 2021, two-year colleges saw a 6.3% decline in net tuition revenue; four-year private nonprofits had a 2.2% decrease, and public four-year schools had a 1.6% loss. The only institutions to see an increase across those two years were in the four-year for-profit sector, with an 8% gain.

Almost two-thirds of highly residential campuses had decreases in net tuition revenue, compared to 62% of primarily residential campuses, and 48% of nonresidential institutions.

Selectivity in admissions did not make a big difference. For colleges identified as more selective in their admissions by the Carnegie classification 55% had a decrease in revenue from tuition, compared to 62% of schools classified as selective, and 59% classified as inclusive institutions.