We hear a lot about list tuition, but what colleges cost the most per student ON AVERAGE?
While news articles on high-end college prices usually focus on full stated Cost of Attendance (COA), the more relevant issue pertaining to undergrad program revenue generation and the overall student body is how much the average student pays to attend. Because of discounting and other aid, we of course know that the stated COA is not a good measure of the average price a program charges. To our knowledge, the highest announced COA in 2021 is the University of Chicago, which asks for $81,531 from its highest paying students but does not top the list of highest student spend. And we know it can’t be measured by Net Price because of the significant number of students excluded from the calculation, something which especially affects reporting by expensive schools, with their large share of well-heeled students paying full prices. (See the table in this post showing just how illusory are highly-selective college Net Prices.)
Average Net Cost clears many of the metrics’ flaws away and permits ranking of which colleges generate the highest average net spending by their students. Our projection of the most expensive school in the US came as a bit of a surprise: Wake Forest, at $62,867. First the Top 20 and then some comments:
The measure we use here, Net Cost, presents student spending on undergraduate programs as it is in commercial transactions outside of higher education. It represents a full-time student’s cost of attending college including: tuition, room & board, fees and estimates of supplies less institutional aid of all kinds (including need-based and merit), and less federal and state/local aid. Loans and other repayable amounts are excluded and do not reduce the cost. Room and board charges used are on-campus costs for residential colleges; for students attending non-residential institutions, the college’s own estimate of such off-campus costs is mostly used. Total average net cost for all students averages a college’s in- and out-of-state costs in proportion to the student body’s residence. Broadening the Net Price metric to include more students, Net Cost differs from the Net Price figure self-reported by colleges to the NCES because it is comprehensive and covers all first-year students, including the over 40% not covered by Net Price calculations.
The 20 can be grouped into several categories.
The Glamorous Triad: Previously, we have pointed to four private schools as being among the largest US undergraduate programs by revenue: NYU, Cornell, Boston University and USC. Benefitting from their location in glamorous global cities, three of those schools show up here again with high average pricing. By tuition revenue, NYU is the largest program in the US and manages to both enroll the largest number of students on our list and also to charge close to the most. The CTAS algorithm calculating these projections takes into account individual college data and economic data but intentionally does not reflect real-time news, such as NYU seeing record application numbers after going test optional. So this 2021 projection could be viewed as unduly pessimistic. As you will see in the table farther down, NYU charged an Average Net Cost of $60,413 in 2018/19 and now has even more demand tailwind on its side. We wouldn’t be surprised to see NYU top out and eventually report figures showing it to be the most expensive US college in 2021/22 when the dust settles. (Wake Forest has been test optional the last few application cycles so it does not benefit from this new tailwind.)
Mid-size Success Stories: The top 20 list also includes a set of mid-size private schools across the country, each with different market positions. Washington University flies a bit under the radar but its reported figures show strong enrollment and demand in the last half decade, allowing the school to enjoy a positive feedback loop: pushing through above average price increases while simultaneously reducing its already-low admissions rates and increasing its yield. The precarious demographic and financial situation of a flotilla of small private colleges in the Great Plains may bolster Wash U’s strong position in coming years.
Santa Clara is another interesting business success story. Taking advantage of the fact that California state schools take in exceptionally few out-of-state students (5% of the state’s total undergraduates), it enrolls approximately 40% of its students from out-of-state. Especially popular with other western states, with sizable recruiting in Washington, Oregon and Hawaii, Santa Clara also attracts students from across the country, with Illinois and Colorado well represented. If you want to live in the Bay Area and be close to the Silicon Valley scene, applying there is a much better bet than the big California public schools, such as UC-Berkeley, with their punishingly small number of out-of-state slots.
Our most expensive school, Wake Forest, has in some ways a similar profile as Santa Clara, although it is more selective. Sitting in the booming Carolina Research Triangle, it offers entree into a vibrant economic area and has used its various attractions to recruit successfully across the nation, with significant out-of-state enrollment not just from neighboring states but from the northeast – Massachusetts, New York and New Jersey – and even from California. Wake Forest’s success comes across multiple dimensions. It has raised prices far faster than the national average (increasing its Average Net Cost from approximately $39,000 in 2009 to the current figure), has become more selective (down to a 29% admissions rate in the 2018 cycle) and is registering a higher yield, all the while increasing its overall undergraduate body size by a moderate amount.
Schools like Tufts, Boston College, Georgetown and Brown, the sole Ivy League appearing, round out this list. All parlay specific strengths into market success.
Small Arts Schools: RISD (Rhode Island School of Design) routinely charges at the very top of the Net Cost distribution, but it is only one of several small arts-focussed institutions that provide pricy but very desirable arts centered education for their niche audience. New York’s School of Virtual Arts, the Berklee School of Music and CalArts all make our Top 20 list, but other schools, such as the Pratt Institute in Brooklyn and the Manhattan School of Music, narrowly missed the Top 20 list.
Other members of our list include a brace of small private California colleges (Pitzer and Harvey Mudd), Bucknell and the New School in Manhattan.
The Top 20 in 2018/19: To allay any concerns that the table above only consists of projections, the equivalent table for 2018/19 can be found below. Average Net Cost is relatively easy to calculate for an institution with solid institutional reporting and, though the metric does suffer from some of the limitations of IPEDS data, the figures below are exactly comparable to the 2021 projections and feature many of the same cast of characters, though with a few interesting shifts.
Of course, the Net Cost paid by individual college students falls along a curve dictated by family finances, academics and demographics. The schools listed work with different curves and prioritize different objectives. But a school’s Average Net Cost illustrates market strength and revenue-generating ability. While many of the colleges on the list are academically distinguished, names such as Harvard, Yale, Princeton and Stanford, with their endowment-fueled need-blind standards, do not appear. There’s no doubt that Harvard (with a projected ‘21/22 Average Net Cost of $44,863) could significantly raise its prices if it changed its philosophy, but it and these other three schools limit their undergraduate revenues to further their overall organizational mission and long-term reputation. The Top 20 shown here illustrates schools pursuing a different objective and more accurately presents average student spending, undistorted by confusing college price discrimination.
Also read this piece at our Substack CTAS Higher Ed Business blog.