In our new book, How to Run a College: A Practical Guide for Trustees, Faculty, Administrators and Policymakers, Dr. W. Joseph King and I assert that the current operating model by which colleges meet their expenses no longer works. This financial crisis is best viewed through one revealing statistic — the stagnation or continuing drop in net tuition revenue.
This crisis puts a college’s enrollment division on the front line for fundraising simply because most colleges and universities are dependent on enrollment revenue, i.e. tuition, fees, and room and board.
Tuition Revenue Fuels the Academic Enterprise
Tuition dollars fuel the academic enterprise. While money also comes from other sources, the over reliance of most colleges on tuition has prompted Moody’s to issue a negative outlook on where higher education is headed.
The situation is especially difficult because there are no other revenue sources or efficiencies that can be created that are likely to dramatically lessen tuition dependence. For example, using room dollars collected for student dorms effectively turns residence halls into fully depreciated cash cows and only exacerbates serious deteriorating facilities issues over time.
If colleges and universities are essentially stuck with tuition as their main revenue source, what can be done to improve the revenue they receive above the rising tuition discounts affecting many of them?
Colleges Need Comprehensive Enrollment Planning
Higher education institutions must answer this question by developing a comprehensive enrollment plan. It’s often said that enrollment is more of an art than a science. Yet precision matters because it directly affects the college’s bottom line.
Significant mistakes in recruiting, missing an enrollment target, financial aid discounting, and retention can quickly cripple all but a handful of the wealthiest colleges and universities.
Deficits have economic, political, social and cultural implications on a college campus.
What are the components of a comprehensive enrollment model?
The first component recognizes that higher education institutions compete aggressively for students. This presumes that enrollment officials know where to find them. It is shortsighted to assume that there are enough students living in high income ZIP codes to fill a class, lower tuition dependency, and increase net tuition revenue.
Enrollment must start with a strategic plan linked to the college’s sense of self and strategic vision. Such a plan must include detailed tactics to identify potential applicants early in the pipeline and by geography, gender, and diversity, among numerous other factors, matched to the scholarship funds and loan programs designed to support these initiatives.
Enrollment officials must appreciate and advocate for differentiated academic programs with a well-defined and responsive student life with which incoming students identify and feel comfortable.
Analytics Based on Data from Current Students
As in any competition — including a competition for students — data bring better results.
Every college needs a good diagnostic, analytical model from which it can develop its assumptions to move admissions more toward a science than an art.
What’s increasingly important, moreover, is that this data be predictive, by looking hard at what students want from their college experience. It’s here where the most work needs to be done in student life programming.
Does the college create the right kind of community to create a good fit with the applicant?
College officials should worry about far more than potential summer melt and focus on how the institution relates to the students that it admits.
Can faculty be persuaded that a differentiated academic program, served by a well-funded and thoughtful career center, produce outcomes that illuminate the quality of the academic program?
Does the institution add programs upon request through allocation of student affairs funds or does it review research provided by the analytics available on new students to establish which residence life programs best aid retention?
Is it frisbee golf or bass fishing, a jazz band, and a gospel choir that create the “nest” into which incoming students find their home within the campus community?
Assessment of Why Students Leave Before Graduation
A robust enrollment strategy must include a retention strategy. One CFO I know argues that retention on many campuses means that a fifth class must be recruited every four years to replace those students lost to attrition.
A well-integrated, coherent and measurable assessment program can greatly improve retention if the parts fit together well. Vigilance, responsiveness across campus offices, integration, and perseverance are key.
Strategic and Well-Resourced Career Services
Finally, there is a need to re-imagine the career center and devote appropriate resources to it. Career centers are the best tool to create a meaningful relationship with alumni because they provide younger alumni with a critical service that illustrates the institution’s continuing commitment to them.
Many colleges have commencement ceremonies in which students symbolically pass through the college gates as they prepare to enter the world beyond the campus. A robust career center opens that world further and also creates ties that bind graduates to their alma mater.
Enrollment must be a seamless pathway that begins with a prospective student’s first stirrings of interest and continues through the application process, matriculation, graduation, and into a deeper, life-long alumni connection. It’s not a four-year moment in time.
A good comprehensive enrollment model is the best way to build a strong, cohesive, sustainable campus community.