Why Colleges Need to Rethink Traditional Business Models

Is it possible to maintain a business when the cost of your goods is increasingly out of reach? That’s the question author and economist Lucie Lapovsky poses in a recent article in Forbes. While the price of secondary education soars, demographic shifts in the country mean that fewer high school graduates are available to compete for expensive slots.
The numbers are staggering. Private institutions have increased tuition by a whopping 54% over the last 10 years, but the tuition discount rate is close to 50% for new students, essentially leaving profits flat. The situation at public colleges isn’t any better—tuition has increased 62% over the past decade, and state governments appear unwilling to offer additional support.
Lapovsy points out that some institutions are seeing better financial returns by creating online degrees and specialized discounts for students who work full-time. But will innovative new thinking arrive in time to give opportunities to America’s newest crop of postsecondary students?