The Theory Of Supply and Demand in College Admissions
Why do you need to understand the basics of supply and demand in higher education? Because paying for college is like paying for any other service or product in your life.Higher education is a business, with it’s own marketplace, that abide (somewhat) by the basic principles you may have learned in economics. The sooner you recognize this, the sooner you can start targeting schools most likely to provide the most generous merit aid.
Colleges in high demand have so many students applying, they can be more selective about who they accept. The fact that these schools are in such high demand means they don’t have to offer any incentive for students to attend. In fact, they can charge more for students just to apply! If nothing else, consider how a college who receives so many applications from top-notch students would even aware merit scholarships when everyone is so obviously qualified? So, as acceptance rates decrease, the cost of a college increases. However, colleges that don’t have the same flow of applications from qualified students, have to offer financial incentives for them to attend. Among the 81 colleges that accept less than 40% of students, only 2 provide 90% or more of freshman with institutional aid. And a large number of these 81 schools give institutional aid to less than 50% of freshman; but the vast majority of that money is actually need-based aid NOT merit aid.
Bottom line: If you want to pay less for college, you need to start shopping at schools who have less demand, where you may not recognize the name, and they have higher acceptance rates — which are all not such bad things! It also doesn’t mean you’ll get a less than quality education.