Peak-Load Pricing in Higher Education

Abstract

Increasing enrollments and inflated costs have really created a financial struggle for colleges and universities. Since there is no foreseeable change it seems desirable to aim toward greater efficiency in the use of existing resources. It is shown that the educational plant, except for a short peak period, is largely under-utlizied. The enrollment response to a lowering of tuition is analyzed. It is shown that if the hours of operation were extended, and if a set of differential tuition rates were established, with a relatively higher rate for the peak hours as compared to those off-peak, a more intensive use of resources would be achieved. It is also shown that the proposal is financially feasible.