Colleges Run Like Businesses: Here's Why it Matters

We all know that college is expensive in the United States. It's an unfortunate universal truth. The sky is blue, the grass is green, and college is expensive.

Abby Jackson states in a recent article in the Business Insider:

Student-loan debt in the US has reached a staggering $1.2 trillion, and the average 2015 graduate will have to repay more than $35,000.

But what if there were a way to get a college education debt-free?

Surprise -- there is. Here's the secret nobody's telling you.

Colleges run like businesses.

This means that Ivy League and other prestigious universities -- the ones in high demand, the ones whose names make you raise your eyebrows -- aren't hurting for students. They have plenty of applicants, and many of them, once accepted, will choose to go to their school.

This is due to their impressive brand image.

Since these schools have such a positive brand-image -- also known as high brand equity -- they just get more. More applicants, more grants, more research opportunities.

And obviously, this is what all major universities want. But how do these universities get more applicants -- and, more importantly, more accepted applicants to choose to attend their university?

Well, they incentivize these students. And these incentives usually come in the form of scholarships.

Laura Petersen, MAED & co-founder of a leading math and SAT prep tutoring organization points out:

Not only is the reward clear -- a debt-free college education -- but there are also psychological incentives for the student. It's a light form of operant conditioning. When students are rewarded in this way, they feel more loyal towards the university.

Lower-demand schools give out merit-based scholarships that subsidize a large chunk of tuition -- to the tune of $24,000, in the case of Arizona State University.

Most importantly, just because these schools are in somewhat lower demand doesn't speak to the quality of their education. Often, they provide an education that is on par with, or even exceeds, the Ivy League.

Just at a much, much lower price tag.

Here's how to get a chunk of the scholarship money.

Merit-based scholarships are based entirely on GPA and test scores -- not your parent's salary, and not your extracurricular activities.

Steps to take to make sure you end up with these scholarships:

1. Start researching colleges early, to see who offers merit-based scholarships.

Does the college you want to attend even offer merit-based scholarships? Is there another college with a similar (or better) program that does offer them? These are all things to find out as soon as possible.

2. Make sure your student's unweighted GPA stays high.

Merit-based scholarships usually just look at unweighted GPA, not weighted GPA. This means that your student needs to get A's in their honors and AP classes--they can't skate by on C's!

3. Plan for standardized tests.

Really make a commitment to study for these tests -- don't push them off until the last minute! (Read more about this in my Huffington Post article, "5 Reasons to Start Planning for College in Middle School.")


Now that you know that colleges are run like businesses, you can use lower-demand universities to your advantage, and gain a fantastic education...debt-free.


Todd VanDuzer is the CEO & co-founder of Student-Tutor. He strives to "spark bright futures" by skyrocketing student's grades and test scores for scholarship and college success!