March 13, 2014

HIGHER EDUCATION BUBBLE UPDATE: Schools Trying Everything — Except Cutting Costs.

With enrollments down and tuition peaking, many colleges are looking everywhere for way to enhance their revenue streams. A new piece in the New York Times describes the rise of “bridge programs,” which are essentially third-party companies hired by colleges to recruit foreign students to study in American schools and prepare them for a foreign educational system.

The purpose of these programs is twofold: There is an abundance of talented foreign students eager to study in the U.S., but most have only heard of the big-name schools, but there aren’t a lot of spots open. Enter bridge programs, which steer foreign students toward lesser-known schools and offer them crash courses in the peculiarities of the American learning environment.

The second purpose of these programs—boosting applications and enrollment—is of more interest to the universities.

They bring in money from foreigners who pay full freight. But that’s a stop-gap solution:

We’ve long speculated that schools will eventually be forced to make painful decisions about cutting administrative overhead and lowering prices, as American students become more price conscious. There are even signs that this is finally beginning to happen. But schools are also trying to put off the need to make tough choices as long as possible, and bridge programs, by drawing in more students willing to pay full price, are a way of doing this.

All is proceeding as I have foreseen.