Colleges Are Learning A Painful Lesson About Luxury Student Housing
High tuition and low enrollment numbers are causing higher education institutions to re-evaluate how they are spending money, including on student housing.
According to The Atlantic, universities have been using high-end student housing units to appeal to aspiring students and remain competitive since millennials began overwhelmingly graduating from high schools across the U.S.
But these luxury dorms have not led to the boom in enrollment universities had hoped, as evidenced by the sustained drop in enrollment the past five years. This dive in admissions has hit smaller colleges hardest, Higher Ed reports.
Between 2001 and 2012, the amount of debt taken on by colleges jumped 88% to $307B. Much of that money was spent on student amenities like rock-climbing walls, upgraded student unions and luxury residence halls.
To support this debt, many colleges have tacked on more fees to incoming students' tuition, making their universities more costly and less attractive. The Atlantic reports after nearly a nine-year building boom, colleges are pulling back on their ambitious plans to build luxurious student accommodations. Research shows the development of student housing dorms and services totaled roughly 6.6M SF in 2015, down from the 11M SF built in 2004.