<p>No questions Holy Cross is in a comparably solid position at current.</p>
<p>Here is the issue the school (and other smaller private schools) will face. If (post the crisis), the school has $150K in endowment per student and uses 5% of the endowment per year to fund education/aid – this implies an average subsidy of $6K per student. Assuming 60% of students get aid – that is $10K in aid per student on an average tuition bill of $35K-$40K.</p>
<p>The problem is that it costs much more than $35K-$40K to educate a student (estimates I have received from folks involved with this are in the $60K+ range). In recent years, all schools have rapidly increased the “list” price to address this issue (or at least narrow the gap). This has been achievable in as enviroment with rapidly increasing applications and a robust stock market. This has obviously changed. Are average tuition increases of 7%+ likely in the future? Can a school like HC sustain its commitment to need blind admission if this is the case?</p>
<p>Other schools are adapting different models to address this trend. The focus on pre-professional programs (i.e., business) allows schools to develop revenue streams from graduate programs. Some schools are emphasizing on line education as an efficient way to deliver education (and fund other programs).</p>
<p>Time will tell how if small liberal arts college like HC can maintain its current approach without a substantial increase in its endowment. On its face, looks challenging.</p>