Abstract:

The purpose of this research paper is to explore the factors that drive the rising prices of higher education and to further break down the various market forces and strategic considerations that contribute to tuition pricing. The rise in tuition prices and amplifying concerns with college affordability motivated our interests in understanding the ways that institutions of higher education are allocating their students’ tuition fees. This paper aims to use the case study method to understand how tuition prices are governed by higher education institutions by delving into the decision-making process of pricing academic services under pressure from competitive markets and in light of institutions' strategic positioning. Harvard University, an elite, private non-profit four-year research university, serves as the case institution of this investigative paper. By conducting expert interviews and carrying out qualitative research methods, this empirical-conceptual paper will explore how the pricing mechanisms of higher education institutions are established. Using the unique case study interview data, existing literature, and archival financial records, the collected evidence advances research on how tuition prices are governed. The paper puts forth explanations for how tuition costs are determined in the context of academic markets and the varying revenue sources of Harvard University.