Literature review #1

2. Kantrowitz, M. (2002). Causes of faster-than-inflation increases in college tuition. College and        University, 78(2), 3-10. Retrieved from       http://search.proquest.com/docview/225612640?accountid=13626

3.This article is about the prediction of tuition rates in the future and the economic forces that are effecting it.  The articles main focus is constructing a model in which Kantrowitz attempts to predict the trend of tuition increases using revenue and cost drivers.  The article justifies how the formulas were created that are used to drive the model and displays the logic behind them.

4. Mark Kantrowitz is the author of an Amazon best seller called Secrets to Winning a Scholarship and is the publisher of two websites FinAid and Fastweb. He has a bachelors in Mathematics from MIT and a masters in computer science from CMU.  He has testified before congress involving student aid and has been interviewed by news outlets such as, Wall Street Journal, New York Times, USA Today, MSN and many others.

5. Cost drivers-  A factor that influences or contributes to the expense of certain business operations

FTE enrollment growth-  Full Time Equivalent students is one of the key metrics for measuring the contribution of academics in third level education, number of supported students.

6.  “USA Today reports, for example, that students at four-year public colleges are facing double-digit increases in tuition and fees, with some schools increasing rates by as much as 26 percent (Marklein 2002)” (Kantrowitz).

“Not only are college tuition rates increasing, but so are the percentage of students receiving financial aid and the average amount of financial aid. This poses a serious problem for colleges, because eventually they will reach the point of diminishing returns. When 75 percent of a college's student population is receiving financial aid, the college nets only 25 cents of each $1 increase in college tuition” (Kantrowitz).

“The full model is not quite this simple, because the Financial Aid expenditure category is not independent of the Tuition and Fees revenue category. To account for changes in the Financial Aid category, the model computes the product of the Percentage of Students Receiving Aid with the Average Aid Percentage. This yields the Total Tuition Discount, which is the same as the ratio of the Financial Aid category to the Tuition and Fees category” (Kantrowitz).

7.  This article is of value to me because it justifies my assumption that tuition prices will continue to increase and gives me a basis for my prediction.  Seeing how the prices will change over the next few years allows me to justify asking if it will be worth it for high school graduates to seek higher education or if they would be better off pursuing a career without a degree and without debt.