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Tarnished Penn State Reputation May Lead to Decreased Applications for Fall 2012

The recent sex scandal involving assistant football coach Jerry Sandusky. Joe Paterno, longtime head football coaching legend, was recently fired from his position, and many expect the quality of Penn State football to never be the same.

http://www.timesleader.com/TheDallasPost/news/PSU_students_are_frustrated_11-13-2011.html

Students at Penn State are now concerned with the value of their schools brand. Similarly to technology, the value that a student receives from their university education is greatly dependent on the quality of the other students who attend school with them. For example, ivy league schools receive larger quantities of competitive applications because the top students expect other students of similar calibur to also apply to those schools. Hence, the strength of the college “brand” is a self-fulfilling prophecy, similar to an operating system.

Penn State will likely receive less applications for enrollment next year due to this self-fulfilling prophecy. Students expect that other students of similar academic calibur will be less likely to apply to Penn State due to the scandal surrounding the name of the school, and also the decrease in quality of the football program. This makes them value the school less than they would have in previous years, and similar schools will appeal to them more in comparison.

The end result is that Penn State may receive less applications, and be forced to lower its standards in acceptance in order to meet its necessary operational numbers.  This self-fulfilling prophecy may spiral out of control if the applications this year are less than the lower, unstable equilibrium number of applications. If the number of applications are lower than this point, then students who apply to Penn State and attend the school will regret their decision and demand for acceptance to the school will be driven down. This would be irrecoverable for the university.

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