While inflation is likely to slowly acclimate parents to higher college prices, Noel-Levitz found a comparatively short supply of students who can afford the highest sticker prices. In 2009, only about 147,000 of the more than 2 million college freshmen came from families earning more than $250,000 a year, Noel-Levitz estimates. Some of those were indifferent students, of course. And many, if not most, went to public colleges. But most of the approximately 1,500 private, non-profit colleges need several hundred full-paying freshmen each year to fund their operations. That means hundreds of private colleges are chasing after the same few thousand applicants who have good grades and rich parents.
Many colleges are trying to make up for the shrinking number of Americans willing to pay their rising prices by recruiting wealthy students in Asia, the Middle East and South America. But the globalization of the education market cuts both ways. American students could put additional downward pricing pressure on American colleges by voting with their feet and studying at well-regarded, lower cost universities in Canada, Europe or Asia, says Ohio University economist Richard Vedder.
[Find highly ranked colleges overseas that charge little or no tuition.]
While the Ivies and other exclusive colleges will likely always be in high demand, Vedder predicts parents will increasingly balk at expensive price tags from colleges that lack elite reputations or rankings. He adds: "It is going to be harder to fill seats in those schools."
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