Breaking the Habit of Overpricing & Over-discounting Tuition
Blog Recap:
In this episode, Shiro sat down with Emily Coleman, an enrollment management expert with over two decades of experience in higher education. Emily, who started her career at Syracuse and now co-runs HAI Analytics, dropped some serious knowledge bombs about a pretty hot topic: overpricing and over-discounting tuition in higher ed. If you missed the episode, here’s a quick recap.
Emily kicked things off by sharing her love for the intellectual atmosphere of college campuses. Most recently, she’s visited Marquette University and resonated with the vibe there. When asked about her background, Emily dove into her journey from Syracuse where she built predictive models to her current gig at HAI. Her firm helps colleges with everything from financial aid optimization to strategic enrollment management.
The Overpricing and Over-discounting Dilemma
Now, diving into the heart of the episode: the perplexing issue of skyrocketing tuition costs and hefty discounts at private institutions. Emily highlighted a staggering stat: the average tuition discount rate for private institutions hovers around 56%. That means students are paying less than half of the listed sticker price. But here’s the kicker—this trend is incredibly harmful.
She explained how this practice alienates potential students, especially those from first-generation or lower-income backgrounds. Many students see the high costs and discounting process as a sign that college is unaffordable, even when it might actually be within their reach with financial aid.
How Did We Get Here?
Emily traced back the problem to the ever-increasing amenities race. As schools tried to outdo each other with new gyms, fancy dorms, and state-of-the-art facilities, tuitions kept climbing. Even institutions that couldn’t afford these upgrades felt pressured to compete, leading to unrealistic budgets and unsustainable financial models.
The Demand Impact
On the demand side, she painted a dire picture. With the population of college-going students shrinking, the competition among schools has intensified. Higher tuition and discount rates have unfortunately narrowed the applicant pool, especially squeezing out middle-income families who don’t qualify for substantial need-based aid but still find the sticker price daunting.
The Data-Driven Solution
Emily also shone a light on her role at HAI Analytics. When a new client comes on board, they dig deep into data—everything from applicant demographics to financial aid impacts. They build comprehensive models to help schools understand the independent effects of various factors on student enrollment. She stressed the importance of breaking down silos within institutions to foster better planning and realistic goal-setting.
In closing, it was clear: the road to solving the overpricing and over-discounting conundrum is a challenging one, but solutions lie in data-driven strategies and long-term planning.
You can follow Emily and her work at HAI Analytics on their website, or connect with her directly via email or LinkedIn.
Read the transcription
Ryan Morabito [00:00:00]:
Welcome to the Higher Ed Demand Gen podcast, helping higher education marketing leaders share knowledge about learning, strategies, and tactics that are relevant today. See what you can learn today by listening to one of our episodes.
Shiro [00:00:16]:
Hello, everyone. Welcome to the Higher Ed Demand Gen podcast hosted by Concept 3 d. If you like our content, please follow and subscribe to us on Spotify, Apple, and Google. My name is Shiro Hattori, and I will be your host today. And today, I’m really excited to talk about why we should break the habit of overpricing and over discounting tuition. For the conversation, I have Emily Coleman joining us today. She is an enrollment management expert starting her career at Syracuse and eventually cofounding HAI Analytics. Emily, welcome to the show.
Emily Coleman [00:00:52]:
Thanks so much for having me, Shiro.
Shiro [00:00:55]:
It’s great to have you here, and I do ask all my guests this. Please tell us what you love about higher ed, Emily.
Emily Coleman [00:01:01]:
Oh, there are so many things I love about higher ed. You know, I love just kind of the atmosphere on a college campus and that everybody is sort of passionate about what they’re doing, and you have people doing drastically different things in terms of professors in different departments. So I loved being on a college campus and kind of working with Syracuse. But now I get to be on lots of different college campuses. So, I think it’s just the intellectual atmosphere I really, really love.
Shiro [00:01:35]:
Fantastic. Do you recall which campus you were most recently on?
Emily Coleman [00:01:39]:
Yes. Marquette University, I was most recently on just a couple of weeks ago.
Shiro [00:01:44]:
That’s awesome. That’s great. Yeah. I don’t get the opport I love going to campuses too. It’s, like, one of my favorite things, and I’m a CU Buff, a CU University of Colorado alum. And so I I tend to go there, but I always love checking out other campuses. It’s such a beautiful feeling.
Emily Coleman [00:01:59]:
Yep. It is. It’s Well,
Shiro [00:02:01]:
let’s jump in. Can you tell us a little bit about your background and your current role today?
Emily Coleman [00:02:06]:
Sure. So I have a PhD in social psychology, and, when I finished grad school, I wanted to use kind of the statistics portion of my degree. I had never heard of enrollment management. I kind of happened into this job at Syracuse through a friend of a friend. I was hired to build their predictive models of retention, of yield, and I loved it. And I loved, you know, being on a college campus and, I was there for 12 years and then I left there, and went to work at another higher ed consulting company. We did a lot of financial aid optimization, helping schools figure out, you know, how to be strategic with both admissions and financial aid planning. And I did that for several years.
Emily Coleman [00:02:56]:
And then in 2018, left with a colleague and cofounded HAI. We also are a higher ed consulting company. We’re sort of full service. We do a lot of predictive modeling, for every stage of the student life cycle. We do do a lot of financial aid optimization, strategic planning, working with schools to, you know, figure out how they can meet their goals.
Shiro [00:03:25]:
Amazing. I had I did have one question about strategic planning. Like, one thing I talk about on this show a lot is getting a marketing seat at the table more, at the strategic planning level. Is that something you’re seeing with your customers, or do you believe it’s a need in the industry?
Emily Coleman [00:03:43]:
There’s a lot of variation. I think we definitely, you know, with some partners that we work with, that that is very much a part of kind of the enrollment management team. And then in other instances, it isn’t as much in in I totally agree with you. It really does need to be. A lot of times what we are brought in to look at is how a school can better use their financial aid dollars to hit their goals. And that is, you know, sort of a shorter term fix. I mean, it can be long term, but it can kind of work quickly. But without that, you know, building the brand and the marketing and all of that other stuff, you just get into this process where you’re just sort of chasing your tail all the time trying to kind of catch up.
Emily Coleman [00:04:39]:
And so I I think it has moved a lot in the right direction, but certainly still a ways to go.
Shiro [00:04:46]:
That’s good to hear that there’s some progress being made. And I I know in in this call today, like, we I talk about the importance of marketing a lot because I I feel like marketing does feel the pressure that, you know, a lot of enrollment goals do weigh on them in in hitting their goals, and you need a seat at the table if you’re gonna make impact there. But I am excited because what we’ll get to talk about the other part, which I believe is the big elephant in the room, which is around, pricing and and finances, and so I’m I’m glad we’ll get to talk about that. But but first, I’m curious in 2018 when you launched HAI, like, how are you feeling in that moment founding, finding this business and company with your cofounder?
Emily Coleman [00:05:32]:
I was excited. I think I probably was not as nervous as I should have been, but, you know, I’m sort of optimistic, and we felt like we had, you know, a service to offer the market that wasn’t being offered. It was sort of a void that we saw. So we were excited to kind of, you know, get out there and and start to offer that and certainly didn’t know all of the little, you know, bumps in the road that come with starting a company that have nothing to do with the work that we do. It’s more just kind of the logistical side of things. But, I was excited about it then. I have no regrets. I, you know, still think it’s the best thing that I’ve ever done.
Emily Coleman [00:06:17]:
It’s super challenging, but I love that. I you know, it’s never boring. They’re kinda always trying to figure something out. We’re a small company. So so, yeah, I guess just excitement.
Shiro [00:06:29]:
That’s that’s great to hear. And I I know we were just speaking about Jamie Hunt, who was, my guest on the 100th episode. She did something similar, not in enrollment management, but in in, marketing. Right? She left her role and started her own boutique agency as of now. I know Nikki Sumstrom, who’s, was at Michigan and also at University of Indiana, started her own boutique agency as well. And so I know there’s a lot of need for help in higher ed marketing, enrollment marketing, so it it’s great to see this trend. Awesome. Well, let’s let’s talk about one of the things you are passionate about.
Shiro [00:07:05]:
I know that you’ve been working in or adjacent to higher ed for 20 plus years, and tell me about your burning topic around, overpricing and over discounting.
Emily Coleman [00:07:15]:
So, you know, it’s it’s a very complicated subject, and I don’t wanna sort of oversimplify things. But, we have seen the cost of college, particularly for private institutions, just skyrocket over the last 30 years. And with that increase, there has been an increase in the discount rate. So just like when you go to buy a car, when you go to college, you often are not paying the sticker price. You’re paying some some sort of discounted price and the level of that discount depends on a lot of different things. What your family’s financial need is, sometimes what your, you know, academic credentials are. But it it you know, we’re at the point now where the latest number for private institutions is that the average tuition discount rate is 56%. So that means if you take all of the private institutions on average, people are paying 44% of what that kind of sticker price is or what the listed price is.
Emily Coleman [00:08:28]:
And, you know, this is problematic for all sorts of reasons. One is that there are certain populations for sure that don’t know this, and that’s, you know, that’s something that we talk with a lot of our clients about is how do you get that, information to students who maybe are 1st generation, who, you know, are in lower resourced communities or high schools where there isn’t anyone there to kind of tell them that this is how it works. So I think schools are losing out on, a whole group of students before they even get into sort of the very top of the funnel at the inquiry stage because they see that cost to think there’s no way that I could possibly do that. So the other thing that happens is that, as well, let me let me back up for one second and talk a little bit about how I think that we got to this place because it isn’t like you go to a college campus and everyone who works there is a billionaire. This isn’t, you know, a a big for profit industry and yet the the cost to attend college is has gotten so high. And part of the reason that I think that happened is there was kind of this wave of, you know, the economy was good and parents sending their kids to college wanted, they wanted all the amenities, you know, they wanted air conditioning and brand new gyms and new dorms and all of these things that make sense. I mean, you’re paying for this, you know, you want the best for your child or for yourself. But what happened is there was kind of this culture to compete with that.
Emily Coleman [00:10:18]:
So there were the schools that, you know, could afford to make those renovations and upgrades, and just continue on. And then there are the schools that felt like they needed to do that in order to compete, but, you know, didn’t necessarily have resources. So you end up needing to sort of, you know, it’s kind of backwards in terms of what’s driving the budget. The budget isn’t being driven by what can we reasonably expect to bring in. It’s more, you know, this is kind of what this costs. And so now we need this is what we need to bring in in order to support this. So that, you know, that has been a big problem and as we see the discount rate, you know, every year, it’s another 2 percentage points higher. So eventually, that is unsustainable.
Emily Coleman [00:11:10]:
So if you get to where you have an 85% discount rate, which many schools do, believe it or not, you know, eventually eventually, you get to that 100% and then, you know, there’s just no revenue. So so, you know, it is, as I said, sort of it’s complicated. It takes kind of that long term investment and that long term planning. Schools don’t always have the luxury of doing that. There are more and more colleges competing for fewer and fewer students. So it’s it’s kind of this perfect storm of, you know, it’s it’s almost like the housing bubble where, you know, it just keeps growing and growing and it has to burst at some point. And when it does, there are gonna be, you know, people who lose in that and schools that lose. And, we’re starting to see some of that.
Emily Coleman [00:12:06]:
I mean, you see kind of every week another small private institution announcing that it’s closing or merging. So there really is we’re starting to see the tide turn in terms of what’s sustainable in the market.
Shiro [00:12:20]:
I had just one clarifying question, which was, I believe, like, the percentages that we’re we’re speaking to right now are specific to private institutions and schools.
Emily Coleman [00:12:28]:
Is
Shiro [00:12:28]:
that right? Cool.
Emily Coleman [00:12:29]:
That that is true. Yes. And the discount so public institutions discount as well, because they start at a lower base. The discount rates aren’t as high. But, yes, what what I’m referring to are private institutions and what a lot of people don’t realize is that, students who are from, you know, disadvantaged backgrounds, very low income, it can actually be less expensive for them to attend a private institution than it is to attend public institution.
Shiro [00:13:02]:
Mhmm.
Emily Coleman [00:13:03]:
Because we’ve worked so hard to, you know, to create resources for these students and there’s federal funding, there’s state funding. So all kind of good things. But where we’re seeing really the, the squeeze is in the middle. So you have the highest income families are able to pay. They’re willing to pay. Higher education still has an incredible return on investment. So I don’t wanna make it sound at all like it’s not worth it. It absolutely is, and, you know, people can see that.
Emily Coleman [00:13:39]:
So you’ve you’ve got kind of the higher income that are able to pay. The lower income are getting all of this financial aid. Mhmm. But then you sort of have this middle band of middle income families where, they’re not qualifying for need based aid from the institutions, but, you know, they can’t afford kind of the big sticker price. So that’s really where we’re seeing, you know, we’re seeing the pain being felt. And a lot of institutions, private institutions now kinda have this u shaped distribution of, family incomes where they have, a lot of students at the lowest end and a lot of students at the highest end and not as many in the middle, which is, you know, unfortunate. I mean, I think just sort of the it’s been the American way to kind of bolster the middle class and and help people move upward socially. Right.
Emily Coleman [00:14:33]:
So it’s unfortunate that this is now kind of happening.
Shiro [00:14:37]:
Yeah. And everything I’m reading, I I know we’re we’re taking these things, like, super broad, but, also, I’ve heard, like, you know, mid middle class, especially, like, upper middle class is is shrinking. Right? And you’re getting more, like, low end of middle class now, with globalization and everything. And so, like, if less of those students are also going to college, it’s just gonna compound over time and create more disparity. Right? Yep. That’s my assumption. So Yeah. That’s a really good point.
Shiro [00:15:02]:
And then I was trying to visualize, like, these numbers around you said in private schools, students typically pay 46% of sticker price. I believe you pulled a statistic for me, which was in the last 10 years, the percentage of students that received discounting grew from 80 to 91% in private institutions and schools. So I’m just trying to imagine, like, walking into any retail store, and, like, 90% of the products are on sale. Like, it just doesn’t look good. And I know the process the sticker price doesn’t show, like, a big red minus 54%, like, when you go to the website. But, you know, just just trying to picture what this looks like. It’s it’s not good. Right? Like, that’s there’s no the business of having almost everything on sale, like, usually doesn’t work for the favor of the business when you look at, like, retail or
Emily Coleman [00:15:51]:
Absolutely.
Shiro [00:15:51]:
Traditional business industries. So I I can’t imagine it’s it’s good for higher ed either.
Emily Coleman [00:15:56]:
No. Definitely not. And and so there has been this movement toward kind of tuition resets where, you know, instead of charging everyone 44% of the you know, but saying we’re charging this, let’s just lower the tuition down to whatever that 44% mark is. And that has mixed results. I mean, it’s the kind of thing that I, you know, am passionate about wanting that sort of thing to work. I feel like that’s what we need. We need everyone to sort of agree on this. But it hasn’t you know, it’s those first brave kind of schools that go out and do that that sometimes it has backfired because families will think, you know, okay.
Emily Coleman [00:16:40]:
Well, why are they all of a sudden there? You know, they’ve cut their tuition in half. Something must be wrong. They must feel like it’s not worth the investment. So it is a it is a very tricky situation that higher ed institutions are in now.
Shiro [00:16:54]:
Gotcha. And then I’m I’m just trying to think of more from the student and maybe the supporting family or constituent perspective. How do you think this process of, you know, overpricing with the sticker price and discounting affects student demand, especially, like, in the private, institution sector where this is a a bigger, issue? Like, how do you think it fixed in the damn hand?
Emily Coleman [00:17:18]:
That’s, I mean, that’s a really good question. I think that, you know, we have been seeing and we will continue to see the population of college going students is shrinking, so schools are competing for fewer students. And I think that, you know, again with the demand, it’s kind of the the highest income families get it. And they, you know, they can kind of make a decision about what what is worth the investment. Hopefully, the lower income families are getting some sort of support in the community if the parents haven’t been to college themselves, to sort of educate them about what’s possible. But but it’s that it’s the middle the middle class that’s kind of saying, we can’t even, you know, they’re they’re not even looking anymore at private institutions. They’re, you know, going to public institutions, which is fine. I mean, you can get I’m a big believer that, you get out of an education what you put into it, and I don’t think that there’s any school where, you know, you if you put your all into it, you’re not gonna gain from that.
Emily Coleman [00:18:29]:
So I I don’t mean to disparage private institutions, but it is kind of disrupting the balance of, just, you know, freedom to kind of choose your own path, basically.
Shiro [00:18:43]:
Gotcha. Thank you for explaining that in detail. Shifting gears a little bit more towards the positive lens, which is, right, you cofounded HAI Analytics, and you’ve been in business for a few years now, and you’ve worked with many partners and clients. So, Emily, what what specifics do you look at, when you, you know, first get a client and you’re like, hey. How do I zone in on the the place where I need to fix or, look at some data? Like, where what’s your process for starting? And if you have any examples, that’d be really helpful.
Emily Coleman [00:19:16]:
Sure. Yeah. So the first thing that we do is we gather as much data as we can, for, you know, some period of history like the past 3 years. So starting at like the very top of the funnel when students first identify themselves to an institution or an institution identifies a student that they wanna recruit. We’re looking at, you know, what are the, what are the demographics of that pool? How many people are in that pool? What is their conversion to applicant? And then, you know, following it down out of the students who are admitted, what percentage enroll? We’re taking, you know, it’s really like 100 and 100 of variables and we’re building statistical models that look at the independent effects of every variable that has a significant impact on whatever the behavior is. So let’s say it’s enrollment. So if we’re looking at all of the application and financial aid factors, we’re looking at, you know, how much does GPA account for students likelihood to enroll at a given institution and how much does financial aid or family income or, you know, there are all sorts of demographics, and that’s where we’re kind of building the plan. And oftentimes, you know, unfortunately, we still I saw this when I first started in higher ed and it still is the case today that a lot of institutions were kind of too siloed.
Emily Coleman [00:20:49]:
So, you know, the financial aid office is operating in in one space and admissions is in another and retention is in another and there isn’t enough kind of communication happening there. But where it works best is for the schools that see the relationship between all of these different factors and are open minded to, you know, like you said, okay. We wanna grow our enrollment by 10%. Is that a situation where increasing the discount rate is the best way to achieve that? Or, you know, do you need to get more applicants in the funnel? Do you need to get more inquiries into the top of the funnel? So I think what we do is a combination of, you know, some some complex statistical analyses and also some much simpler descriptive analyses where we’re looking at, okay. You know, I I remember with one particular client once they had an enrollment goal in a particular program and that enrollment goal was higher than the inquiries for that program, was higher than the applicants for that program. So Mhmm. No amount of financial aid is gonna produce, you know, people who don’t exist. So in those cases, we have to say, okay.
Emily Coleman [00:22:12]:
This is a bigger problem. It’s not always a problem that we address. We’re not, you know, marketing people. But we can we’re good at using the data to identify what needs to be fixed here. What’s possible? Sometimes schools will set enrollment targets or revenue targets that just aren’t possible. So it’s a matter of having that conversation. But I mean, we work with some some really great smart partners who get it and, they’re not, you know, they’re they’re sort of they’re not putting all their eggs in one basket, or they’re not looking to us to solve all of the issues. They understand that it has to be recruiting and marketing and, you know, just investment in programs and buildings and and all of that to bring in the the students.
Shiro [00:23:02]:
That’s fantastic. And this actually makes me think of a conversation I had with it might have been Syracuse, actually. I gotta look back, but, it was around the I think the episode was called, like, the depth of the inquiry and how a lot of students are now just like the buyer journey for commerce Mhmm. Is that a lot of students do a lot more information searching ahead of time. So they’re not like, they don’t know the they’re not used to the typical process of, you know, I submit an inquiry and then an admissions officer counselor reaches out to me, and then we have this conversation. And then I submit an application. They get hit by TikTok and Instagram ads. They find out about institution.
Shiro [00:23:49]:
They look at their website and program selector. They’re interested. They might watch some YouTube videos, listen to a podcast about a student story. The journey is very complex, but they’ve done all these things to gather information
Emily Coleman [00:24:01]:
Yeah.
Shiro [00:24:01]:
And they just submit an application Yeah. Straight away. Is that a trend you’re seeing with your clients as well, just less inquiries and just straight to
Emily Coleman [00:24:10]:
application? Absolutely. So they they’re called stealth applicants, basically, and it’s the people who you don’t know about until they apply. And that has grown. I mean, I remember when I started, it was maybe 5% of the applicant pool. And for many schools, it’s now more than 50% of their applicant pool are people who they they don’t know about and they don’t have that ability to kind of communicate with them. And so it does and, you know, that’s where my expertise is very limited. It it, requires schools to kind of reach students where they are and be very creative about kind of, you know, their websites and optimizing search engines and, you know, looking at digital advertising. All of that stuff that many of our clients work with, smart folks who help them with that.
Emily Coleman [00:25:05]:
But, it is yeah. It’s it’s one of the many things that makes enrollment managers’ lives more difficult every year.
Shiro [00:25:15]:
Always changing. Yep. Probably changing faster than ever. Yep. All the this has been great. And I did I did just look up it was Mike Skelenz, and I he was at Syracuse at the time I interviewed him, director of the strat marketing strategy for Okay.
Emily Coleman [00:25:29]:
So Alright. Might have been after my time.
Shiro [00:25:31]:
Yeah. My memory serves me yeah. I think he was I think I interviewed him, like, a year and a half ago, and he was somewhat new to the position. Okay. I can’t remember exactly. But yeah. Well, this has been great. Thanks so much for all of the knowledge, Jared, and, you know, talking about pricing because it’s very hard to talk about in this industry.
Shiro [00:25:51]:
I’m wondering where our listeners can, follow-up with you and learn more about what you’re up to or what HAI is up to.
Emily Coleman [00:25:57]:
Yeah. Definitely. So our website is haianalytics.com. You know, we have contact forms there. People are welcome to email me at ecoleman@haianalytics.com, or reach out to me on LinkedIn. Yeah. We’d we’d love to hear from folks.
