Tuition revenue forecast shows steeper drop at private schools

Lower overall enrollment, fewer international students and financial aid increases are all contributing to fiscal 2021 declines
By: | October 30, 2020
Post-COVID, undergraduate enrollment at private schools will fall by 4%, compared to 3% at public institutions, according to a Moody's survey. (GettyImages/FatCamera)Post-COVID, undergraduate enrollment at private schools will fall by 4%, compared to 3% at public institutions, according to a Moody's survey. (GettyImages/FatCamera)

Tuition revenue will drop 3.3% at private colleges and universities and 0.9% at public institutions due, in part, to enrollment declines caused by COVID, according to Moody’s annual higher ed survey.

Lower overall enrollment, fewer international students and financial aid increases are all contributing to the fiscal 2021 declines, according to Moody’s.

Lower enrollment and higher discount rates will cause tuition revenue to fall at nearly three-quarters of the private institutions surveyed. The median first-year discount rate at private universities grew to 55%, Moody’s reports.

Approximately 60% of the public universities in the survey expected revenue decreases that will be driven by pricing constraints, affordability efforts and weaker enrollment.


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The survey found that undergraduate enrollment at private schools will fall by 4%, compared to 3% at public institutions.

Revenue declines, however, will be more severe at smaller private and public colleges and universities.

In fact, revenue is forecast to be flat at comprehensive public universities in fiscal 2021. Moderate- and small-sized public universities project 2% and 2.8% median declines, Moody’s found.

At private schools, 87% of small institutions expect a decline competed to 74% and 64% of moderate-sized and comprehensive private universities.

Enrollment drops could last past COVID

More than 30% of the higher ed leaders polled by investment firm NEPC said enrollment at their school had declined by 5% to 10%. However, 15% of the administrations reported enrollment growth.

Nearly two-thirds of leaders expected spending to decline, while 27% said spending would increase.

The leaders also ranked the following COVID-era revenue decrease, starting with the most impactful: state and federal funding, revenue from athletic programs or other non-tuition revenue streams, fundraising, tuition and housing.


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Finally, 44% of the leaders expected enrollment declines to continue after COVID is no longer an immediate threat.

Highly selective and flagship research universities will weather the COVID disruptions more smoothly because of brand reputation and revenue diversity, says an endowment analysis by Fitch Ratings.

The outlook is also brighter at smaller, rural campuses that maintained or grew enrollment. The schools benefitted from the perceived safety of their campuses and the institutional trust of their students, according to Fitch.


UB’s coronavirus page offers complete coverage of the impacts on higher ed.