What is the Net Tuition Revenue Number Dilemma? (A Mathematical Illustration)

For those who are mathematically inclined, the Net Tuition Revenue Number (NTRN) Dilemma can be expressed more succinctly using two equations:

Equation 1: Budgetary Perspective

Net Tuition Revenue = Expenditures – Non-Tuition Revenue

This equation shows how NTR fills the gap between a college’s spending and its other sources of revenue. The NTR number must rise when:

• Expenditures increase but non-tuition revenue does not, or

• Non-tuition revenue falls while expenditures remain constant.

Equation 2: Enrollment Perspective

Net Tuition Revenue=∑ⱼ (Number of Studentsⱼ × Net Tuitionⱼ)

This equation shows how NTR is built from the contributions of different student groups. The subscript j can represent groupings based on economic background or other factors. The NTR number increases when:

• A college enrolls more students from groups that receive less institutional grant aid (and thus pay more net tuition), or

• The net tuition price rises for any particular group.

The Dilemma

The NTRN dilemma arises from the tension between these two equations:

• Equation 1 highlights the concerns created by a low NTR number. It requires the college to find more non-tuition revenue or to cut spending. 

• Equation 2 highlights the concerns created by a high NTR number. It means enrolling wealthier students or increasing unmet financial need for lower-income students.

A college must balance these competing concerns.