Are Enrollment Rates Really That Bad? Student Housing Experts Weigh In

College enrollment has picked up some scary headlines lately. But Virtus Real Estate Capital acquisitions director Kevin White tells us it's a lazy man's game to make blanket statements about enrollment rates. Kevin and Core Spaces director of acquisitions Brian Thompson shared their thoughts on enrollment rates prior to our Austin University Development and Student Housing event tomorrow.

Since the crash in 2008, state spending for public higher education has been cut by 17%. Tuition has risen by 33% since that time. That's right, the cost of public college has gone up by one-third in less than a decade, according to the Center on Budget and Policy Priorities.

Given the facts, it's a business move for colleges to accept more out-of-state students. And these kids need housing, Brian tells us. They're not local and certainly not commuters, and usually have more money to spend on premium student housing.

This summer, the New York Times reported that the University of California system, and others, gave favorable admission treatment to out-of-state and foreign students who would pay higher tuition.

Kevin (here at a charity golf tournament benefiting Boys and Girls Club of Austin) says it's because schools, particularly SEC schools, have done a great job recruiting students from states with growing high school graduates and not enough capacity in their respective schools. These colleges are selling an SEC experience at a Tier 1 school for kids who can't get into their own state schools or don't want to go.

62% of freshmen at the University of Alabama come from out of state, according to the National Center for Education Statistics. 55% of University of Mississippi freshmen and 47% of University of Arkansas freshmen pay out-of-state tuition. Many SEC schools hover just under 40% for out-of-state freshmen. 

And despite the headlines about decreasing enrollment, both Kevin and Brian feel optimistic about the future.

Public schools are doing fine, Brian (here with his niece) says. The negative enrollment can be seen in private and online schools, not at state flagship institutions. And while there's a lag in enrollments right now, high school graduation rates are rising, and elementary and secondary levels look solid. Over the next five to 10 years, Brian and Core are expecting growth to accelerate.

Those increased high school graduation rates place kids at public institutions, where Virtus is focused. Kevin says Virtus still believes that Tier 1 flagship universities provide the best return on investment from the education perspective.

Hear more from Brian, Kevin and other student housing insiders at our Austin University Development and Student Housing event tomorrow. Sign up here.