Bama’s $100 Million Dollar Game Changer. And What Higher Education Should Do Next.

It was a bold move. One that will have an enormous impact on the higher education landscape for some time to come.

In a recent article, The New York Times reported The University of Alabama increased their merit-based aid to $100 million.

$100 million dollars!

Let that sink in for a minute. Because a decade ago that number was $8.3 million.

Not only has aid gone through the roof, the school has gone out and hired an army of recruiters to bring in more out-of-state students.

In the enrollment war, The University of Alabama just went nuclear.

Schools across the country have been amping up their tactics to lure in new students, but this move takes the fight to a whole new level. And comes in direct response to two macro trends facing higher education: a shrinking student base and the decline in state funding.

Since 2010–2011, the number of high school graduates has been on a steady decline. The Northeast and Midwest will be the hardest hit. According to The Chronicle of Higher Education, the Northeast’s 2028 graduating classes are projected to be 10% smaller than 2009. That represents approximately 66,000 fewer students.

Funding is also shrinking. Thirty years ago, state funding provided approximately 59% of the core revenues at public four-year colleges. In 2013, it was 27%. If current trends continue, by the next decade state spending for higher education may cease to exist.

These challenges mean schools across the country have to work harder and do more than ever to gain enrollments. The University of Alabama is no exception and recognizing the uphill battle, they’re charging full-steam ahead.

So how is this $100-million gamble paying off? So far it seems to be working:

· The university is now the fastest-growing flagship in the country

· Enrollments are up 58% since 2006

· The average GPA is up to 3.6. A decade ago it was 3.4

· ACT scores for the top quarter of students have gone from 27 to 31

What is particularly interesting is the make-up of the current study body. Keep in mind, the typical student attending a four-year college comes from an area less than 100 miles from home. For those attending a private four-year college, that distance moves up to 250 miles. Due to their aggressive recruitment strategies, 57% of the current student body is now from out-of-state.

What Should Schools Do To Address This Seismic Shift?

A new bar has been set, and this approach will force schools to reexamine their strategies. Those that don’t address the situation face the prospect of missing their enrollment goals. Bigger schools may be able to absorb the hit and ride out the storm…at least for now. Small to mid-size schools could be devastated without a plan of action.

So what can schools do? In the area of recruitment, I see a two-step approach: get in the game and start planning.

In the short term, schools will need to enter this arms race and become more aggressive incentivizing potential students to attend. In short, adopt the Alabama model, a model with proven results. And if a school is serious about increasing enrollments, merit-based aid is a lever that can be pulled.

And while I believe this approach can jump start things, it’s not an effective long-term strategy. For that, colleges and universities should consider the following:

1.) Elevate the role of marketing: True, many schools have marketing teams. However, within the walls of higher education, few understand marketing’s role, purpose or reason for being at the table. Far too often, marketing efforts seem disconnected from other activities. Moreover, the efforts of one school may not be aligned to the initiatives of another school. This has to end. Colleges and universities can start by elevating the level of marketing talent. In other words, bring in team members that have spent much of their careers in marketing. Then allow this talent to implement the processes and disciplines used by successful marketing organizations in the business world. Dan Dillion and the work he has accomplished at Arizona State University is a great example. He was given the opportunity to take best practices from his experiences outside of higher education to ASU and the results have paid off. The blueprint is out there. It’s time for more schools to invest in the resources to get it done.

2.) Focus on an emotional connection — not just on features and benefits.Communication for higher education by and large is terrible. The reason? It’s a litany of features and benefits and the occasional mention of an “amazing” school location. There’s much more that can be done. But in fairness, the features and benefits approach has served colleges and universities well for much of their history.

With a sea of sameness occurring in this space, now is the right time to evolve messaging beyond just facts, figures and locations. Schools can take their cue from some of the best consumer brands operating today. Brands like Nike, Harley Davidson, Virgin and Coke are doing so much more than connecting on product features. They are tapping into our values and using these insights to create powerful emotional platforms that resonate and move people to action. Many schools have great stories to tell, stories that can connect deeply and profoundly with prospects. Yet few have embraced this idea. In the days ahead, successful colleges and universities will evolve their messaging to first emphasize the emotional connection, followed by facts and benefits to close the sale.

3.) Strengthen the connection to their business community: Students and parents are spending tens of thousands of dollars for a diploma, and their number one motivation for this investment is to get a good job. But as today’s job market is rapidly changing, higher-level skills will not be taught only in the classroom. As Jeff Selingo points out in his brilliant piece, The Decade Ahead, employers are looking for experienced candidates, but they aren’t always sure they are getting the right experience from a traditional bachelor’s degree. To reduce this gap, schools can forge partnerships with business so students can earn certificates for their work outside of the classroom. Selingo references Lipscomb University, where students can quality for badges endorsed by outside experts to prove they have mastered certain skills. The template is there but needs broader acceptance.

What path schools take or how fast they react remains to be seen. Higher education institutions have historically moved at their own glacial pace. Then again, they didn’t feel pressured to operate any differently.

That will change.

The business landscape is littered with those organizations that couldn’t react or chose not to read the writing on the wall. Blockbuster, K-mart, Kodak, and Pan Am, are just a few that come to mind. True, higher education is different. This is a sector heavily subsidized and regulated, so perhaps the situation isn’t so dire. Rich alumni may elect to swoop in and provide assistance or states could offer up a bailout. Who knows? We live in interesting times where the Chicago Cubs are sitting on top of baseball and a reality show star won the White House. Given all this — I guess anything is possible. But hope is never a good strategy.