What Do Students Really Value in a College?

by James A. Bacon

An ongoing debate about the economics of higher education is the degree to which students value their education as an investment (a way to get a better job and generate higher income) and to which they view it as a consumer good (four years of parties and good times). The question is of more than academic interest because it gets to the heart of affordability and access. Acting on the conviction that students value the non-academic side of the college experience, higher ed institutions invest in athletic programs, swanky student unions, and other amenities to aid in student recruitment. But these programs and amenities have costs, which are reflected in higher tuition, fees, and charges for room and board — which discourage recruitment.

A new study, based on the preferences of University of Arizona students, has put some numbers on college students’ Willingness to Pay (WTP) for college-related activities before and after the COVID-19 epidemic. The authors found students willing to pay only a small premium — about 4.2% of average net costs — for in-person instruction as opposed to a remote format. Students place a bigger premium on on-campus social activities — about 8.1% of the average annual net cost of attendance.

“The WTP for in-person instruction appears relatively small, which suggests that many students perceive remote classes as a reasonably good substitute for in-person classes,” write the authors of “Estimating Students’ Valuation for College Experiences.”

That finding should send a frisson of fear down the spines of every college president in Virginia (except perhaps Liberty University and Old Dominion University, which have established major distance-learning programs). As much as faculty members believe that in-person learning is a tremendous educational value-add, their customers — students — view it as a marginal benefit. With every public university in Virginia shifting most classes online during the COVID epidemic, distance learning has acquired far greater legitimacy as a learning option than it had pre-COVID.

What, then, is the competitive advantage of traditional college campuses? It is the ability of students to interact not with their professors but with one another. First and foremost, colleges are mating markets. Secondly, they offer amenities geared to their interests, be they football and basketball games, intramural sports, art flicks, political speakers, student clubs, parties, wilder parties, and opportunities for drunken hookups. Those same amenities are available in any major metropolitan area, but they are not as readily at hand, hence students are willing to pay an 8% premium on average.

I foresee two dilemmas for college presidents and governing bodies. The first is than an 8% premium is not much of a premium. Two or three years of jacking up tuition, fees, room, and board can gobble up that premium in an institutional blink of the eye. Their cost structure is much higher than that of online programs, but traditional colleges can price their degree programs only marginally higher.

The second problem is that different students have different willingness to pay. Lower-income students place significantly less value on college as a consumer good. One reason, theorize the authors, is that lower-income students tend to work more hours. The more they work, the less leisure time they have; the less leisure time they have, the less opportunity they have to enjoy the amenities they are paying for. There may be cultural factors at work as well. A student whose parents belonged to fraternities or sororities is more likely, for example, to value the presence of Greek organizations on campus than a first-generation student.

Students at universities with elite brands — the University of Virginia, the College of William & Mary, possibly Virginia Tech — may have different preference profiles than the University of Arizona. But less prestigious institutions likely have similar preferences. Their governing bodies would be well advised to take a look at their value proposition in the post-COVID era.

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19 responses to “What Do Students Really Value in a College?”

  1. LarrytheG Avatar

    Doesn’t this indicate that the “college experience” is not as sought-after with younger folks as it was for the older generation?

    I know some older folks highly value their time on campus but I do wonder if at the end of the day – anyone , any employer, knows if an job applicant got their degree at UVA online or on-campus and if so, what difference it makes.

    Sounds like to me that young people value the degree most of all and that the on-campus experience is receding as a sought-after thing.

    1. Dick Hall-Sizemore Avatar
      Dick Hall-Sizemore

      The reality does not bear out this speculation. Applications for admission to Virginia colleges and universities next fall have increased significantly. https://www.wvtf.org/post/surprising-year-college-applications#stream/0

      1. The rising number of applications can mean one of two things: (1) more people are applying, or (2) people are applying to more colleges. I’ve seen abundant evidence that the second scenario is what’s happening.

        1. Dick Hall-Sizemore Avatar
          Dick Hall-Sizemore

          Either way, it does not seem that “the on-campus experience is receding as a sought-after thing.”

        2. Nancy Naive Avatar
          Nancy Naive

          Probably the third option. Covid unemployment rose only 1% nationally among college graduates.

  2. I love this: “The WTP for in-person instruction appears relatively small, which suggests that many students perceive remote classes as a reasonably good substitute for in-person classes,”meaning I can teach from OBX in September and Hilton Head in May!!!!! Right On!!!!

    1. Nancy Naive Avatar
      Nancy Naive

      Great! So you want to WORK in paradise?

      1. Nope – I’m in paradise. No ‘squitos, always a breeze, ACC B-ball, great tailgating, and great white tail hunting — just need my required time of…”….my toes in the water, ass in the sand
        Not a worry in the world, a cold beer in my hand
        Life is good today, life is good today”

        1. Nancy Naive Avatar
          Nancy Naive

          I’m more of a “knee-deep in the water somewhere” kinda guy.

        2. DJRippert Avatar

          Adiós and vaya con Dios
          Going home now to stay
          The senoritas don’t care-o when there’s no dinero
          Yeah, I got no money to stay

          And put my ass in a lawn chair
          Toes in the clay
          Not a worry in the world a PBR on the way
          Life is good today

  3. DJRippert Avatar

    Once upon a time there were a lot of professional musicians. The only way the public could hear music was to play it yourself or go to a venue and listen. Then came technology. Artists could be recorded. Fewer professional musicians and a “winner take all” type of system evolved. The few that succeeded became as rich as kings.

    Once you can stream a professor why do we need tens of thousands of professors? Aren’t most undergraduate classes taught in a large forum by professors with teaching assistants answering the students’ questions in smaller “workshops”? Why does the Commonwealth of Virginia need hundreds (thousands?) of tenured English professors when just a handful can teach the classes with grad students and TA’s providing individualized support yo students on campus?

    1. Nancy Naive Avatar
      Nancy Naive

      The pure capitalist objective – maximum productivity with minimum effort.

      I’m sure however, the local venues (come June or so) will still be packed with those listeners for live performances of “The Great but Unknown”.

      1. DJRippert Avatar

        More technology than capitalism. But if your customers (the students) don’t assign much value to the product you provide and there is a well established technological alternative, well …

        1. Nancy Naive Avatar
          Nancy Naive

          DeVry, Phoenix, TrumpYou, …

  4. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    I really do worry about this trend. For all its faults, an in-person college experience has a great benefit for an individual and society in general. It is much easier to inculcate critical thinking through personal interaction and debate than through nonpersonal means (Plato realized this; hence, the Socratic method). That benefits the individual student and society at large. Another advantage of the in-person experience is the exposure to students from a wide range of backgrounds and mindsets.(Of course, that is not so much an advantage at places like Liberty
    University, which purposely tends to attract people with the same
    mindset.) I took an on-line course this fall and I know nothing about the other students in my class. That was one of the dissatisfying aspects of the course.

    We are already moving too much toward an insular society, in which folks sit in their homes and have contact, through social media, primarily with folks who think the same way they do (the familiar echo chamber). On-line instruction will only exacerbate this trend.

  5. Nancy Naive Avatar
    Nancy Naive

    Actually, as I remember back to those years, I generally walked away from lectures with ideas that we would discuss in the student center and expand on in the library study groups.

    I wonder where the “learning” really takes place?

    Without the peer group what learning will occur? I mean, look what crap Americans believe given just self-learning from the internet now.

  6. Nancy Naive Avatar
    Nancy Naive

    One advantage of internet based learning over the old fashion self-taught from books approach, which we of the previous generations might have used, is at least they will learn the correct pronunciation of names and jargon.

    “Lebesgue integral”. Go ahead, give it a crack.

  7. LarrytheG Avatar

    There are a variety of ways to obtain a higher education these days but clearly the most costly is 4 years on campus.

    Before COVID19 – the big thing was MOOC, even got the head of UVA canned (for a bit).

    On campus actually does provide additional “education” and perhaps not unlike traditional boarding schools where the ability to learn to socialize is pretty important for some occupations.

    It’s not the only way though and I think COVID has further validated that online is legitimate and does educate also, without the expense of room & board if that is already in hand for someone.

    It also allows kids all over Virginia to “attend” UVA and get a degree from UVA , perhaps with some on-campus but not 4 full years worth.

    Our big problem is that even with the supposed wise counsel of parents, too many kids make terrible financial decisions with regard to college debt and I have to say that some college “traditions” are not that wonderful anyhow given some of the excesses that seem to always be present.

    Bottom Line – COVID helped to validate online and am not going to be surprised to see become a major focus. I can see a “try UVA for a year or two then come on campus for your last 2 years” option.

  8. Howard Bergman Avatar
    Howard Bergman

    Students want three things from their university:
    1. A strong brand name on their resume
    2. A strong network of alumni for support in the workplace at the beginning of their careers
    3. A strong network of classmates for support in the workplace later in their careers.

    Only number 3 requires an in-person experience.

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