Originally published on Active Learning in Political Science, 3 July 2015.

Some of you may have heard the news about Marian Court College in Swampscott, Massachusetts: it has closed. Students and faculty were given two weeks' notice. Marian Court was a tuition-dependent school with a dwindling enrollment and a persistent budget deficit.

In their public statements, administrators and faculty at Marian Court appeared to be hopeful about its future. They were surprised by the college's closure. They shouldn't have been.

Undergraduate enrollment is driven by an institution's academic reputation, its student experience, and cost. For some potential students, the combination of a prestigious reputation and a campus atmosphere that resembles an all-inclusive tourist resort trumps high cost. Others will pay a lower price for a college with a reputation that promises a reasonable return on one's investment or that delivers immediate gratification in the form of campus-based recreational activities and socializing. Then there is the bargain-bin type of institution that lacks both reputation and student experience but can attract people who want post-secondary educational credentials at a very low price.

Marian Court was not competitive in any of these three market segments. It offered only associate's degree programs until four years ago and did not have an elite brand. As a commuter school, it had none of the typical U.S. undergraduate campus amenities like dormitories or athletic teams. Marian Court did have a low price -- annual full-time day student tuition was $16,500. But there are four community colleges within fifteen miles of Marian Court, with the closest less than four miles away. In-state resident tuition for full-time students at any of these campuses is approximately $6,000 per year. Salem State University, also less than four miles away, offers a wide selection of two- and four-year degree programs, plus dormitories, intercollegiate athletics, and campus activities that come from an undergraduate enrollment of over 7,500 students. Salem State provides both a student experience and an undergraduate education for only $10,400 in tuition and fees.*

Given the increasing need for non-elite colleges and universities to differentiate themselves on the basis of student experience and price, perhaps they should prioritize recruiting students who are the most likely to donate large sums of money as alumni.

*The price ranges from $9,250 with a health insurance waiver to an estimated $11,550 if health insurance is purchased through Salem State University. I split the difference between these two numbers.