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Feeling Cost Pressure, Colleges Try Marketing Gimmicks

Go to college for seven semesters and get your last semester free!

As Americans begin to question the value of college degrees, universities are beginning to experiment with these kinds of marketing gimmicks to attract cost-sensitive students. According to the WSJ, the deals run the gamut: all the way from a modest $2,500 application rebate, to a fifth-year of study, free of charge. Spring Arbor University in Michigan is even offering to subsidize students after graduation if their jobs pay them less than $37,000 annually.

The marketing push, most common among mid-tier schools, comes as private universities compete over a shrinking pool of potential college students:

Nationwide, the number of graduating high-school seniors this year is expected to decline to 3.32 million from a projected all-time high of 3.41 million during the 2010-11 school year, according to the Western Interstate Commission for Higher Education. And fewer college-bound seniors are choosing private four-year schools: Between 2006 and 2011, the percentage of students at those schools dropped to 20% from 22%, according to the College Board Advocacy and Policy Center.

This is another sign that the higher ed bubble—fueled in part by federal subsidies, university administrative bloat, and an overvaluation of college degrees—may finally be beginning to deflate. There are fewer college-bound students these days, and they and their parents are responding to growing debt burdens and rising tuition by becoming more cost conscious. Universities are feeling the heat on prices, for a change.

It’s about time.

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