Cost is the #1 Reason Students Forgo First-Choice Colleges

MBA Blog / 27th March 2017

The most common reason that admitted students—regardless of family income, SAT score, and minority status—forgo first-choice colleges is the cost of attendance, according to a survey released today by Royall & Company, a division of EAB. 

Eleven percent of respondents in the survey said “no” to their first-choice school.  The leading cause that students cited was cost; nineteen percent pointed to cost of attendance while just nine percent of students cited campus environment, the next most common reason. 

Moreover, when cost of attendance is combined with other price-related considerations (perceived value, financial aid, merit-based scholarships) that students cited to explain their decision not to attend their first-choice college, the number jumps to 40 percent of students citing cost-related reasons for forgoing their first-choice school.

“The survey findings suggest that, in many cases, students choose less prestigious schools for reasons related to cost,” said Peter Farrell, managing director at Royall & Company.  “These results affirm a suspicion that many enrollment professionals have had since the Great Recession—that cost is a driving factor in students’ college decision-making.”

Even students from high-income families cited cost as a reason to turn down their first-choice school.  Forty percent of students from families with the highest incomes—families who are expected to contribute more than $40,000 for one year of college—said cost-related reasons were the top factor in their decision not to attend their first-choice college.  Campus environment, the next most common reason students in this income category gave for forgoing a first-choice college, swayed just 11 percent of students.   

The trend holds true when controlling for SAT score and minority status as well.  Forty-two percent of students with SAT scores greater than 1,200 opted out of their first-choice school because of cost-related reasons and 39 percent of students with SAT scores below 1,200 forwent their first-choice school for cost-related reasons.  Similarly, 43 percent of minority students forwent their first-choice school for cost-related reasons, and 39 percent of non-minority students said they opted out of their first-choice school for cost-related reasons.   

One possible reason so many students are deterred from their first-choice college by cost: Thirty percent of students found a school more expensive than expected, and almost half of those students decided not to go to that school for cost-related reasons.

Communicating “Return on Education”

“While cost is a primary driver of college choice for students, it is also a variable that is really hard for colleges and universities to address, in light of shrinking state budgets and the increasing number of postsecondary students who require intense support to succeed,” Farrell continued.  “So instead, many colleges and universities are focused on communicating why their institution is worth the cost, along with why it’s a student’s best fit and how it’s different than other institutions.”

Luther College in Iowa, a private liberal arts school in the Midwest, is overcoming that challenge by focusing its communications on post-graduate outcomes, including a 99.4% employment rate, high average alumni salaries, and specific alumni success stories—not its bucolic setting.

“It is our top priority to make sure students know what they should expect to get out of a Luther College education,” said Scot Schaeffer, vice president for enrollment management at Luther College.  “And the results we’ve seen prove that prospective students are extremely interested in outcomes.  We continue to highlight students’ career success in our communications and on our website and are proud to report an 11 percent increase in applications over last year.”  

This analysis came from 6,121 students who chose to forgo their first-choice college, which is a subset of a larger Royall & Company survey that reflects input from 54,810 students who were admitted to the class of 2016 at one of 92 member institutions.  The vast majority of institutions that participated in the survey are not highly-selective.  The findings related to family income and college decision making are based on an analysis of a further subset of the sample (1,104 students) for whom financial aid information was available.  

For more information on the factors that influence how students choose schools, visit the Royall & Company Enrollment Blog.

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