Schools rely on obscure consultants who work for private equity firms to locate students and determine scholarship amounts. This is how the price you pay is affected by that.
Four members of the House and Senate wrote to Ivy League presidents last month, requesting years' worth of data on how they determine what to charge.
According to the letters, these organizations "create an umbrella effect for all colleges and universities to justify higher tuition costs than they could otherwise charge in a competitive market by establishing the industry standard for tuition pricing."
Indeed, just a handful of other universities can charge Ivy League tuition to a sizable portion of their student body and their families. Up to the annual reply date of May 1 (and occasionally beyond), the majority of public institutions and every other commercial institution engage in fierce price competition. For first-time, full-time students, private universities currently provide an average tuition savings of more than 56%.
The primary force behind college tuition is not some diabolical genius from Harvard or Penn. Instead, it's a collection of algorithms created surreptitiously over decades by consulting businesses that operate beneath the radar. Private equity firms own the two largest companies, EAB and Ruffalo Noel Levitz, or RNL.
To understand how all of this happened—and how things really function today, for families and financiers looking to profit from this opaque system—we must go back 50 years to when an unexpected character took over the admissions department at Boston College and upended everything.
Leveraging Teenagers
Jack Maguire attended Boston College as an undergraduate and later pursued a Ph.D. in physics. He accepted a position as an assistant professor in 1968, shortly after receiving his degree.
Currently, Boston College has a $4.1 billion endowment and rejects 87.5 percent of applications. However, when Mr. Maguire began working there, it was a struggling commuter school with a deficit.
When the college was looking for a new dean of admission, a young physics professor seemed like an odd choice. Nonetheless, the school requested Mr. Maguire, 85, to have a look. "They couldn't find anyone else," he admitted in a recent interview.
Calling on him made some sense. He was on the school committee in Lexington, Massachusetts, where he lived, so he was connected to one community that sent people to college.
When Mr. Maguire analyzed the college's data, he sensed opportunity. What if the school offered precision-guided discounts based on candidate quality rather than student affordability? It turns out that doing so encourages more above-average pupils to accept the offer.
As new patterns appeared, Mr. Maguire entered information into computers. The machines offered further suggestions. Experiment and iterate until you reach a solvent.
The news of Mr. Maguire's findings spread swiftly in the clubby world of admissions. After assisting in the turnaround of Boston College in 1983, he and his wife, Linda Cox Maguire — then the director of admissions at adjacent Simmons College, now Simmons University — founded Maguire Associates, their own consulting firm.
When Boston University considered what would happen to market demand if it dropped its National Collegiate Athletic Association football team, Maguire Associates discovered that candidates were more likely to have attended an opera than a game. Goodbye, football.
Within ten years of Maguire Associates' creation, the predecessor businesses to Ruffalo Noel Levitz and EAB were gaining traction. They replicated what Mr. Maguire had done at Boston College, but they also devised new tools and became all-around school whisperers.
One or both can assist a college in purchasing hundreds of thousands of names of kids who have taken the ACT or SAT, marketing to them via multiple media, improving retention after they are on campus, and raising funds from alumni more effectively.
For many years, the firms referred to the Maguire-esque portion of their offers as "financial aid leveraging." Concerned that the name might conjure up ideas of corporations using money as a crowbar to wedge themselves into teens' minds and parents' pocketbooks, they eventually rebranded their service as the more innocent "financial aid optimization."
Maguire Associates never expanded to the size of EAB and RNL, and those two behemoths have never been shy about their determination to make their industry more like the Wall Street firms who invest in it.
In a corporate podcast, Madeleine Rhyneer, who EAB refers to as its "dean" of enrollment management, discussed how admissions offices "actually" operate and stated, "I actually think of financial aid optimization as a form of arbitrage." Indeed, it is. It is comparable to being employed in the financial markets.
In a statement, Ms. Rhyneer gave EAB a more balanced description of its efforts. "EAB collaborates with a range of educational institutions to support their missions and educate larger student populations," she stated. "That means engagement and scholarship strategies that raise awareness about college options and make college accessible to as many students as possible in today's rapidly changing higher education landscape."
Despite making up a comparatively modest portion of both companies' earnings, this work is the one that most frequently causes parental concern.
Even politicians have taken note. According to those letters from last month, the institutions may be able to "engage in algorithmic collusion" if they use "nonpublic algorithms for admissions and financial aid."
Financial Aid Arbitrage
The first step in the optimization process is gathering more information about teenagers and their families than one may imagine.
Demographic, socioeconomic, geographic, academic, curricular, and extracurricular information—anything you tell a school when you apply or seek information—is where the process begins.
The pitches start as soon as a school has a sizable target list. Families are familiar with this pattern; one Ohio mother forwarded to me a 63-pound package containing all of the correspondence her daughter had received from college suitors.
The consultants provide colleges with tools to monitor teens' internet connections with clients in real time if the targeted individuals express interest.
Human Capital Research Corporation's founder and CEO, 68-year-old Brian Zucker, has long been in competition with RNL and EAB. This real-time data is what he and his colleagues call "footprints in the sand."
"Minute by minute, it changes," he stated. "It includes texts, visits, clicks, opens, the duration of time spent on a specific webpage using a specific URL, and monitoring forms, of which there are numerous."
Using information on more than 350 clients and 1.5 billion "student interactions," EAB's presentation, "Strategic Use of Grant Aid 101," explores up to 200 factors that schools can consider when determining the cost of admitting a single student. More than 1,900 clients help RNL refine its several models, which range from fund-raising to financial aid.
When displayed as individual variables, Mr. Zucker stated, "you have to know how to manage these data and aggregate them because they just look like vomit." "A single click doesn't mean anything."
According to Brad Pochard, a former vice president of enrollment management at Furman University and current adviser to Moore College Data, which assists institutions in organizing and analyzing vast volumes of data, the results of the data collection process frequently appear as a matrix. Consider two axes: one that scores academic achievement and the other that gauges financial capability.
The matrix may have 40 or more "cells," each of which has a unique price.
Thus, an opening bid is made by a school. The reduction in the school's list price for families with lower incomes may be referred to as need-based aid. For a wealthier family, the discount could be referred to as a "presidential scholarship" or anything else that it believes will influence a student's choice.
However, it is merely an opening offer, and more families are realizing this every year and delaying making a selection until a few days before the deadline, at which point they request a better deal. They frequently receive one.
Round-the-Clock Shift Work
Only 12% of the Class of 2028 admitted students at the public College of Charleston in South Carolina accepted their offers of admission.
The state's larger public universities, including as Clemson and the University of South Carolina, are formidable rivals with a lot of rah-rah spirit. However, they may not be in one of America's most picturesque cities, and they may lack intimacy.
EAB was brought in by the College of Charleston to assist in promoting those benefits. For its assistance (and for all the names on its prospect lists), it has paid the firm about $500,000 annually.
The organizations that administer the SAT and ACT provide updated names and information about those people at different times throughout the year.
In a written proposal to College of Charleston, which I was able to receive through a public documents request, the company stated, "We have developed systems and processes (including round the clock shift work) that ensures our partners are consistently first in the inbox and in the mailbox."
Increasing the number of students paying out-of-state tuition is one of the best strategies for a public school to increase revenue. What the playbook says is as follows:
1) Purchase a list of kids' names from ZIP codes that are suitably wealthy, then make a compelling argument for them to attend a far-off school.
2) As the College of Charleston did, improve the admissions team by recruiting individuals with corporate sales experience.
3) Establish a high tuition rate to give the impression that it is valuable.
4) Offer a generous academic scholarship to make prospective students feel particularly privileged, but not to the point where they aren't still paying more than in-state students.
According to Andrew T. Hsu, president of the College of Charleston, "we changed our scholarship program from rewarding top scholars to those who weren't receiving merit-based scholarships, and that helped increase our yield quite a bit."
That quotation is taken from a Q&A that was posted on EAB's website in August of last year, but it vanished around the time I got in touch with the college to inquire about it. According to a representative for the College of Charleston, the quote gave the impression that it was a choice, thus the school asked that it be taken down. According to him, merit aid is still given to the top pupils.
So, how does the school choose who gets what and how much?
Jimmie Foster Jr., the College of Charleston's vice president of enrollment planning, responded to my query in an interview by saying, "There's a limit to how much I think I can go into detail." After all, it's better to prohibit competitors from having access to that kind of material. It was also unable to say that EAB had assisted the school in optimizing financial aid.
The financial outcomes have been outstanding, regardless of the price method. In a recent year, the school charged out-of-state students twice the net price while offering them a threefold reduction in the list price per student, compared to what South Carolina students received.
Over the course of five years, the number of outside states sending at least 75 first-year students to the school has increased from three to nine.
Of the 1,249 students in the first-year class who could afford to pay the full price (including both in-state and out-of-state students), 1,127 received grants, according to the school's 2024–25 common data set, the statistic-filled form that colleges and universities submit to U.S. News & World Report and other such organizations. The yearly average was $12,572.
To put it another way, College of Charleston has strong reason to assume that the great majority of its wealthiest students would still receive a significant discount.
An Unsteady Slope
Scholarships given to those who don't need them are not unique to the College of Charleston.
After all, Mr. Maguire assisted in creating the program at Boston College, a Jesuit university. He told me last month that no one at the time questioned the morality of offering steep discounts to those who could afford full price.
However, he has never remained mute on systemic injustices. In an interview published in an industry newspaper in 2003, he proposed that Princeton and similar universities donate $100 million from their multibillion-dollar endowments to a college that has nothing and assist it in providing education to more underprivileged people.
It hasn't occurred. He is not alone, though, in thinking about what would happen to the candidates with the least amount of money.
Before retiring in 2017, Eileen K. O'Leary worked in the financial aid trenches for 34 years at Stonehill College, which is located outside of Boston. She bought consultancy services from Mr. Zucker there.
She gradually began to feel pressured to give larger discounts to more individuals who didn't need them. After all, there were typically rivals nearby who had a separate consultant whispering in their ears to further reduce the price. Subsequently, more families became aware that they might pit schools against each other.
"Being traditional, I believed that financial aid was meant to increase access, but that is no longer the case," she added. "That was a business plan."
The App for Matchmaking
All of this seems like a good argument for a private equity firm to invest in the consultancies.
Since most institutions lack the funds to employ their own algorithm-twirling data scientists, a decline in enrollment and revenue is a surefire way to get your supervisor or board to take notice. Last fall, American University's first-year class fell 350 shy of the 2,250 students the school had hoped to enroll, which resulted in a revenue shortfall of more than $20 million.
The fact that American is a fairly elite institution serves as a reminder of how difficult it is to attract kids if you don't attend one of the Ivy League universities that politicians seem to be so fixated on. It now feels more defensive than offensive to employ a reputable enrollment consulting business to handle the data flow.
A number of variables, such as the initial price paid to acquire the businesses and any dividends received along the way, will determine whether or not the private equity firms that hold EAB and RNL turn a profit.
However, when they finally sell the businesses, that's when the big score arrives.
You can see EAB and RNL billing themselves more like IT operators than some sort of direct-mail sweatshop as the college enrollment sector gets more and more data-driven. They use "new capabilities to perform advanced analysis" to apply their "enrollment intelligence assets" to "immense data sets."
After all, software companies are valued higher than consulting organizations.
Appily, a customer-facing college portal with a cheerful tone, was launched by EAB in 2023. It is essentially a matchmaking program. On a company podcast, EAB director Tisleen Singh stated, "Consider it a dating app."
When students create a profile or search, schools can reply immediately or ask visitors to take virtual tours. Without a formal application, they can also grant admittance right away, along with a discount.
Get a $50,000 merit aid grant quickly by swiping right! However, Appily does not currently pair you with love prospects in your entering class.
EAB already boasts three million Appily users, so it's a game effort. However, after being investors for a number of years, neither RNL's overlords nor EAB's private equity owners have been able to sell their shares. A few of them declined to comment, while others failed to respond to inquiries for comment.
You can see why. EAB and RNL marketers must put in much more effort to persuade universities to part with their funds, as the Trump administration has been criticizing several universities. One thing that might help is that universities will need more firepower and data savvy to compete for any applicants who still wish to continue higher education if foreign students are scared to come to the United States or are not permitted to.
Jack Maguire is no longer responsible for any of this. He and his spouse were prepared to begin retirement planning by 2022. They sold their business to Carnegie, a marketing-focused consulting firm supported by the private equity firm New Heritage Capital.
Even after five of his former players received professional contracts, Mr. Maguire, a longtime American Legion baseball coach, still goes out and conducts batting practice. The pair just got back from a journey that took them all around the British Isles.
Additionally, New Heritage had stopped being an enrollment whisperer by the previous year. The continued efforts to wring one last dollar out of one last family every spring are now funded by another investment business, Shamrock Capital.
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