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The cost of college for students increased by more than 25% in the last 10 years.1 Colleges and universities turned to this lever to counter cuts to higher education funding, declining enrollments and a rise in other expenses at institutions. In response, students/consumers have underscored the need to improve the affordability of higher education. Meanwhile, institutions continued to demonstrate an overreliance on increasing revenue and countering costs with tuition increases.

The COVID-19 pandemic has only brought the ineffectiveness of this lever to the forefront. However, even before COVID, colleges and universities (both public and private) were largely operating with structural deficits. That is, operating expenses were regularly exceeding operating revenues – often by a substantial margin – and are heavily reliant on non-operating revenues to balance the budget each year. In short, the old normal had already become challenging, even pre-pandemic.

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