The Money Behind College Applications

Last Friday, the NY Times published the first in a series of collaborative articles with the Chronicle of Higher Education that explores the extraordinary growth in the number of college applications.  It probably comes as no surprise that today’s students are applying to a greater number of colleges than their peers from a few decades ago, especially with the introduction of “standard” college applications that allow students to fill out one application and submit it to multiple schools.  The percentage of students applying to 6 or more colleges has increased from just 16% in 1989 to 33% today.

This increase in college applications can also be attributed to the leveling effect of the Internet where previously obscure schools are becoming better known and where search tools are helping students identify with and apply to a growing number of institutions.  In turn, colleges and universities have also increased their marketing efforts to prospective students…just ask any high school sophomore after taking the Pre-SATs (PSATs) or Pre-ACTs when they start getting bombarded by glossy flyers from schools across the country.  Wondering how these colleges get the names of the best test takers?  College Board, the non-profit educational group that administers the SAT and PSAT sells some 80,000,000 names annually to over 1,200 different school at $0.32/each, grossing over $25M annually.  Not a bad revenue stream.

One of the most interesting arguments addressed in the article was how many applications are actually required to provide an accomplished and diverse class?  Does Stanford really need to advertise when they already receive 32,022 applications for under 2,000 spots?  Admissions counselors are quick to point out that if they aren’t proactive with recruiting in underprivileged communities then they might miss some very bright students who would never think of applying to a world class school.  After all, this is an important part of the diversity these schools try and promulgate.

However, there is also a business imperative that was completely glossed over (disappointingly) in this article.  College applications have become a big money industry.  Those 32,022 applications at Stanford brought in almost $2.9M in applications fees.  Brown made over $2.2M on its 30,135 applicants, while the University of Chicago earned almost  $1.5M.  At the top of the heap is UCLA, whose 57,760 applicants brought in nearly $3.5M!

As much as these colleges say they need to broaden their recruiting net for the sake of diversity, they have also discovered that getting students to apply – even those with no shot at being accepted – is a great way to make some extras $$.  Alums of increasingly selective schools have been completely supportive of these measures as they feel it increases the value of their degree.  In 2004, the University of Chicago accepted nearly 40 percent of its applicants.  By 2010, this number was just 18 percent.

Of course, these tactics come at a price.  For one, some schools are having a difficult time determining just how many students they need to accept to fill classes.  Tulane, one of most aggressive marketers in all of higher education received over 43,000 applications last year.  Of the 10,000 students it accepted, only 16 percent ended up enrolling.

There is also the concern that in introducing “common” college applications, some schools are losing their niche.  Isn’t it better for a school to market itself to a particular type of student, rather than try to be all things to all people?

 

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