| College affordability has become an increasing concern for American private colleges and universities, as well as for families, due to the increasing gap between college prices, available subsidies and family resources. In response, private higher educational institutions have adopted various strategies to enhance institutional enrollments and revenues. Specifically, this study examined the impact of institutional prestige, pricing strategies and affordability strategies used by selected American private higher educational institutions. A price, prestige and affordability model was developed to predict first-year, full-time enrollment and total net tuition revenues.;Data sources for this investigation included: (a) the College Board's compilation of the Common Data Set (CDS), (b) its Annual Survey of Colleges (ASC), and (c) selected data from the U.S. News and World Report's college rankings. The study focused on specific institutional data for the 1999–2000 academic year from private colleges and universities, classified as Baccalaureate I (BA I) and Baccalaureate II (BA II) institutions by the Carnegie Commission. This group of institutions was selected because of their similarities in terms of mission, academic objectives, enrollment size and control. Additional institutional characteristics were compared and contrasted. In particular, comparisons of prestige, pricing and affordability strategy variables were made. A two-part, three-step multivariate regression analysis was used to determine the impact of prestige, pricing and affordability strategies. The three-step regression analysis was used to test the price, prestige and affordability model developed in this study.;Overall, the price, prestige and affordability model worked well in predicting first-year student enrollment and total net tuition revenue at the more selective BA I institutions. The model's predictive power was not as strong for the less selective BA II institutions as it was for BA I institutions, though it was more useful for predicting total net tuition revenue than for first-year enrollment. Both groups of institutions used need-based and non-need-based aid as pricing strategies; however, the more selective colleges made greater use of need-based aid, and the less selective colleges relied more on non-need-based assistance. While price, prestige and affordability were important factors for predicting first-year student enrollment and total net tuition revenue at more selective colleges, college affordability was the most important factor in predicting total net tuition revenue at less selective colleges. |
