Education Technology Prediction for 2021 — An Educated Buyer

In the world of the COVID-19 pandemic, students shopping for higher education options have become more savvy out of necessity. At SightLine, we believe there will be a reckoning that many students will not continue to pay high tuition prices. We foresee a divergent market between high cost and more value-based universities.

There will always be a market for perceived elite institutions with high sticker prices, no matter what the discount rate is. But we are seeing a trend of mid- to even high-caliber institutions that have had declining student yield rates over the past decade. These institutions have increased their published prices annually, as have most institutions, to maintain a prestigious image. The discount rates at these institutions are remarkably high, so very few students pay full price. But students have a hard time understanding award letters, going through the FAFSA process, and making final enrollment decisions.

At SightLine, we predict that a new student shopper will emerge that will prefer to see sticker prices, or published tuition rates, that are closer to what they will pay to attend. A recent example of this is SNHU creating a $10K per year bachelor’s degree. Students paid a $14,610 net price on average to attend 4-year private institutions in 2019 which is not far off from SNHU’s new published price. So, this comes down to a marketing question: Will students be drawn to no-haggle pricing where the published price is much closer to the net price?

We believe that the data is available to answer this question as well as many other university market questions arising because of the COVID dynamic. Universities will be taking a much closer look at where they sit in the market relative to their top competitors. They will be keeping a close eye on institutions that have made changes to their pricing because of the pandemic. And they will be looking for niche markets of students to serve as student needs and expectations are diversifying.

Over the past few months, SightLine has set out to address this challenge in higher-ed. We have been working with various Midwest institutions to assess their current market position, identify whether adjustments in published price or net price will impact their yield rates, and identify new markets where they may be more competitive. This is a relatively fast and affordable analysis that is performed with readily available IPEDS and National Student Clearinghouse data. It lays the foundation for larger pricing and discount rate discussions at the institution.

This analysis also paints a clear picture for the university Board of Directors as to where the institution currently sits relative to top competitors. This is quantified through student caliber, pricing, enrollment yield rates, and graduation rates or student success as well as assessing long term trends in pricing and yield rates. Universities need to know how sustainable, or unstainable, their long-term strategies are. This clarity and directness are critical to making the tough decisions that will be made out of necessity throughout 2021.

Originally published at https://sightlinedata.com.