There is only one recommended read this week, because it is dense with important statistics and implications for the K12 ecosystem…

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“It’s Affordability, Stupid,” by Jeff Selingo, in the NEXT e-newsletter

“The growing affordability gap in higher ed has happened in a good economy. Seems like we’re one recession away from a real crisis.”

Why does this matter to the future of learning?

Selingo goes on to say:

• Today, about 28% of students pay full sticker price of a college; in 2006-7, about 39% did.

• Net-tuition revenue (cash left over after giving out financial aid)—is essentially flat or declining at 75% of public colleges and 60% of private colleges.

And if you think it’s bad for the colleges, think about it from the point of view of the families:

• The economic recovery of the past decade has meant barely keeping up for most families.

• More students are “gapped” in their financial-aid packages, as family incomes stay flat and college prices rise. Gapping is what happens when an aid formula tells families what they’re expected to pay for college, but an institution gives them less—in some cases, a lot less.

  • $11,000: average gap at public colleges, up from $6,500 in 2008.

  • $16,000: average gap at private colleges, up from $11,000 in 2008.

As we have often said, these trends are leading indicators for K12 independent schools. How long before some families begin to “satisfice” on K12 so that they can afford college?

And if even 5-10% of your families defect to low- or no-cost alternatives so that they can afford college, and if demographics are shrinking in most places, are you prepared for a lower-revenue future?

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