Empty seats, lost revenue. The uncomfortable math of under-enrolled courses.

This is a measurement gap. The cost of an empty seat is real, it is recurring, and it almost never shows up as a single line you can point to in a budget. So it gets treated as background noise.

The standard fix is to cancel the section and move on. Except, that fix is more expensive than it looks. Here is the math most institutions have never done.

The Seat That Runs Half Full Is a Quiet Loss

Start with the section itself. When a class runs below its fill threshold, the institution still pays the full cost to deliver it: the instructor, the room, the systems, the administrative overhead. What changes is the revenue side. Fewer students means less tuition coming in against a cost that barely moved.

And the tuition that does come in is already discounted heavily before anyone counts it. The 2025 NACUBO Tuition Discounting Study estimates the average institutional discount rate at 57.1 percent for first-time, full-time undergraduates and 51.3 percent for all undergraduates in 2025-26. So the “revenue” in a thinly enrolled section is net of a discount that, on average, eats more than half the sticker price.

A half-empty seat is not half the loss. Once you net out discounting and hold instructional cost constant, it is worse.

That is the cost everyone can at least picture. The expensive part is what happens next.

Source context: NACUBO’s 2025 study includes private, nonprofit colleges and universities and reports 2024-25 data with initial 2025-26 estimates.

Canceling the Section Does Not Delete the Cost. It Moves It.

When a section is vastly unfilled, the reflex is to cancel. On paper it looks clean: cut the under-performing class, save the instructional cost, problem solved. The California State University system eliminated 1,430 course sections in one year across seven campuses, roughly 7 percent of the total at those campuses, under exactly this pressure.

But the cost does not disappear when the section does. It moves downstream, and downstream it usually grows.

Most costly is what the cancellation does to students who simply cannot wait. Research on course shutouts is blunt about this. When first-year students at Purdue could not get into a required course, they were 35 percentage points less likely to ever take it and 25 percentage points less likely to enroll in any other course in that subject.

A blocked course does not just delay a student. It can redirect them out of a major, or out of the institution entirely. It is a domino effect.

Every student who stops out that way takes every future term of tuition with them. Measured against that, the instructional cost of running the original section starts to look small.

The Same Empty Seat Is Also Someone Else’s Missing Course

Here is the reframe that makes this a strategy question and not just an accounting one. The empty seat in your section is, somewhere else, a student who needed exactly that course and could not get it at their own institution. Two problems that look unrelated are actually the same problem viewed from opposite sides.

Course sharing is the model that connects them. The mechanics are straightforward: an institution with open capacity in a scheduled course makes those seats available to students from partner institutions who need the class, and the participating schools share the tuition. The seat was already going to be taught. Filling it with a partner’s student turns near-zero marginal cost into recovered revenue.

There are real-world examples. An Inside Higher Ed report on course sharing describes the University of Mount Union losing roughly $900,000 in tuition in a single summer as its students went elsewhere for required courses the college could not offer them flexibly.

The same model that was bleeding revenue out the door can be run in reverse: fill your open seats with other institutions’ students, and keep your own students enrolled with you instead of watching that tuition walk. Networks like Acadeum and the Council of Independent Colleges’ sharing consortium now connect hundreds of institutions doing exactly this.

What This Means for the Budget Conversation

None of this requires a new building or a new program. It requires measuring a cost you are already paying and then deciding to recover it instead of cancel it. Three moves get you there.

1. Calculate your real number. Pick a recent term and add it up: instructional cost of under-threshold sections, the advising hours spent re-placing displaced students, and the tuition value of students who stopped out after a course they needed was canceled. Most teams are surprised by the size of the third number, because no one was tracking it.
2. Stop treating cancellation as a free save. A canceled required course is a deferred cost, not an avoided one. Before cutting a section, ask where those students go and what it costs when some of them go nowhere.
3. Treat empty seats as recoverable revenue. A course-sharing arrangement turns your open capacity into tuition and keeps your students on track toward a degree with you. That is the version of this story where the empty seat becomes an asset instead of a loss.