Private equity-owned consulting firms, such as EAB and Ruffalo Noel Levitz, have developed algorithms over decades to influence college pricing, creating significant discounts often in the form of merit scholarships. These firms assist colleges in targeting prospective students by leveraging large datasets, enabling them to optimize financial aid offers to secure enrollment. This practice, initially pioneered by Jack Maguire at Boston College, has evolved into a sophisticated data-driven industry that some criticize for prioritizing business models over educational access. Colleges like the College of Charleston use these services to effectively market to affluent out-of-state students, offering substantial discounts while maintaining high tuition prices to create a perception of value. The involvement of private equity firms highlights the financial motivations behind these practices, as they aim to maximize profitability by treating education as a market-driven enterprise.

Consulting firms, owned by private equity, use algorithms to determine college pricing, allowing schools to offer significant tuition discounts as merit scholarships, impacting the amount families pay.

The algorithms, originally developed by Jack Maguire, allow colleges to target students using detailed demographic and behavioral data, shaping financial aid offers to maximize student enrollment.

The approach, known as financial aid optimization, is criticized for shifting focus from improving access to education towards a business model driven by market dynamics and profitability.

Colleges like the College of Charleston employ these strategies to attract affluent out-of-state students by offering them substantial scholarships while maintaining high tuition to suggest prestige and value.

Private equity firms invest in these consulting companies, seeing the potential for high returns, as they capitalize on the increasing reliance of colleges on data-driven enrollment strategies.

The complex algorithms and data management processes involve analyzing up to 200 variables per student, drawing from billions of student interactions across thousands of client institutions.

Politicians have raised concerns over the potential for algorithmic collusion among colleges, as the opaque system heavily influences tuition pricing and scholarship allocation across the higher education landscape.