Published by Forbes
Climbing walls, omelete bars, lazy rivers, condo-style dormitories—campus perks are often blamed for the rising cost of four-year, residential college in the United States. For decades, colleges have engaged in an amenities arms race—advertising free laptops and state-of-the-art gyms to woo prospective students.
A survey of high school students released Monday shows many still want these amenities and are willing to pay (and borrow) for them. That’s despite all the publicity about how Gen Z’s elders have been burdened with $1.75 trillion in student debt.
In February, Art & Science Group, a higher education consulting and research firm, conducted online interviews with 786 U.S. high school seniors who plan to enroll full-time at a four-year college or university this coming fall. Asked whether, all academic factors being equal, they would prefer an institution that was less expensive with fewer amenities and services, only 39 percent of student respondents said yes. A greater share—44 percent—said they would prefer a more expensive, academically-equal school if it had more amenities and services. Moreover, the students’ top college choices during the application process tilted even more heavily toward high-amenity schools.
“Concerns about the rising costs of higher education are real. The impact on families—especially starting out from lower income positions—is real. But broadly, we haven’t yet hit a tipping point,” said David Strauss, a principal at Art & Science Group and co-author of the report. “There’s a significant swath of the media that says higher education is pushing something on people that they don’t want or that isn’t wise for them, and yet, the main market is telling us ‘Yeah, but we want more and are therefore willing to pay more for it.’”
Art & Science Group didn’t poll the parents of the students. So it’s unclear what role the teens’ relative price insensitivity may play in family discussions as the traditional May 1 deadline for seniors to commit to a single college approaches.
The seniors weren’t totally oblivious to financial concerns. Fifty-five percent of the respondents said they had some concerns about their ability to afford college, and an additional 22 percent of students said they had major concerns about it. Black, Hispanic and first-generation college students more often said they had major concerns about college affordability.
Yet that concern wasn’t fully reflected in the schools the seniors chose to apply to—or those that represented their top choices. The survey asked students to rate the colleges in their “choice set”—where they had at least a shot at gaining admittance—based on the level of services and amenities they provide: a high level, medium level, or low level. (The survey defined amenities as non-essential features and services, such as quality dining halls, residence halls, and student life facilities; athletic facilities; a range of extracurricular offerings; and various types of counseling and advising.)
Of the students’ top choice schools, 58 percent were ranked as having a high level of amenities, while only 4 percent were ranked as low level. Even among the students’ safety schools (meaning those they thought sure they’d be admitted to), only a fifth of colleges ranked low on amenities. To hammer the point home: when asked to rate their top picks on a 10-point scale, students gave highly resourced institutions an average score of 9.4, while medium and low-resourced colleges received an 8.7 and 7.8, respectively.
It is clear from the survey results that most students are at least somewhat concerned about the cost of college—as well they should be. In 2021, the average sticker price for tuition, fees, room and board at private four-year colleges was $51,690 annually, up from $40,670 (in inflation adjusted dollars) in 2006, according to a recent College Board report. The average list price for public, four-year colleges was $22,690 in 2001, up from $17,120 in 2006.
Average net price—the total students and families pay out of pocket after institutional and federal grants are taken into account—has increased more slowly. At public colleges, the average inflation-adjusted net price rose from $12,760 in 2006 to $14,590 in 2021. At private colleges, net price increased from $27,460 in 2006 to $28,610 in 2021.
The authors also wondered whether students would still think highly of their top choice schools if they were less resourced and less expensive. To get at this, respondents were asked to rate their first and second-choice schools on a 10-point scale, assuming the institutions lowered amenities and cost. Across the board, ratings went down. High amenity institutions, which had received an average rating of 9.4, scored a 7.2. Medium amenity institutions dropped from an 8.7 to a 7.6.
“If you take away some of the amenities, the kids become less and less attracted to the institution,” Strauss said. “The market has not yet been interested enough in paying less that it would [also] settle to have a lesser experience for lower costs.”
Is there a limit to further cost increases? Maybe. To get at that answer, Art & Science asked students to rate their first and second choice schools again, this time assuming the institutions raised the level of amenities and cost. Students gave them consistently lower scores, although the high amenity schools still scored higher than medium amenity schools.
Six in 10 respondents to the survey were female and six in 10 were white, but responses were weighted by income, race, region and gender to represent the larger college-going population. The survey doesn’t reflect the desires of adult, online and other non-traditional students, who often don’t utilize the same on-campus resources that residential students do.
“Society has turned to these institutions to have a broader and broader role in the lives of young people,” Strauss said. “And not only is it lazy rivers, but it’s also increasing demand for mental and emotional health services. It’s how nice the dorms are. It’s all of these things that we’re turning to institutions to provide, and the market says ‘I want it and I’m willing to pay more for it.’”