Uncharted waters: navigating enrollments and financial aid in tough times.
TWO BIG QUESTIONS ON the minds of administrators at higher education institutions today are "What colleges are most at risk?" and "How will families react to the economic situation?"
While the argument can be made that no college will emerge unscathed--not even the most elite private research universities and public flagships--clearly some IHEs are much more vulnerable. They include institutions that:
* Are profoundly tuition driven.
* Have an undifferentiated portfolio of academic programs.
* Already discount deeply.
* Are not near major population centers.
Colleges and universities with these attributes are "poster children" for institutions at risk.
Although the extent to which families may change their college-going plans is certainly not dear, there is an array of behaviors that needs to be monitored. Large numbers of students and families are likely to opt for lower-cost institutions, especially for their first year. Of course, there is a limit to the capacity of low-cost, state-supported institutions, both two-year and four-year. As the press has made us well aware, most states are cutting back on their support of state colleges and universities, so less will be available to serve more.
Certainly some families are going to reduce expenses by having their college-bound students commute rather than live on campus. This is why IHEs in rural areas are disadvantaged. Financial uncertainty will weigh heavily on many families, limiting their willingness to use their assets and investments for education when job security and retirement funds are so unpredictable.
Given all this, there are a handful of "do nots," as colleges and universities prepare themselves to enroll the new class in fall 2009. These include cutting budgets in revenue-producing offices such as admissions and financial aid, increasing tuition to make up for enrollment and budget shortfalls, investing in new market development before securing the primary market, and proceeding based on an anecdote (read: fear) rather than data.
SHORT-TERM STRATEGIES TO CONSIDER
* Communicate affordability. Make sure your prospective and current students know that you are their partner in keeping your institution affordable. How? On the web, share income profiles, case studies, calculators, and merit guarantees. Get on the phone with current students who have balances or who don't pre-register. Call newly admitted students who just received their first financial aid award and walk each one through the meaning and value of the package. In short, communication will be key to easing students' and parents' financial concerns.
* Track key metrics. Throughout the recruitment cycle, be sure you understand how the fall 2009 applicant and admit pools are different from previous years, because some populations are less likely to complete the application process and/ or enroll if admitted. Changes in the pool profile need to be accounted for in enrollment projections. Beyond that, other metrics to monitor include the percent of the applicant and admit pools applying for financial aid, the number of visits compared to prior years, financial aid appeals compared to prior years, and the volume of current students requesting transcripts and not pre-registering for the upcoming semester compared to prior years.
* Be high-touch. Make sure your current communications stream is sufficient and customized, that it focuses on the benefits as well as the return on investment of your educational experience. Contacts from faculty, coaches, and alumni should be via multiple media (e.g., phone, in-person, e-mail, etc.) as well as a supplement to--rather than a replacement for--follow-up by designated admissions representatives. Remember also to be high-touch with current students as well as prospective students. You want to be sure you are seen as a resource and a partner in both instances.
* Pay special attention to transfers. For all the reasons noted earlier, many families will decide that students need to stay closer to home and choose the lowest cost option, at least for the first few years. If your institution isn't seen as a point of destination for community college graduates, you will be at a competitive disadvantage. Of course, building those relationships takes time. Consequently, your admissions office should have a transfer "champion" who is responsible for taking the lead in building relationships with his or her college counselor counterparts and also for helping to create opportunities for faculty-to-faculty and student-to-student relationships to develop. Finally, ensuring that transfer policies and practices are as streamlined and transparent as possible will help increase your institutions' attractiveness to students graduating from two-year schools with associate degrees.
* Stick to your knitting. This means executing your "best bets" in support of recruitment and retention before thinking of developing and investing in new and untried initiatives. It also means focusing on your primary market as identified by the smallest number of high schools or community colleges that historically send 50 percent of the applicants from each recruitment territory.
* Pay attention to competitors. This means being sure that you properly identify who you compete with at the inquiry, admit, and enrollment stages. Once you have identified your competitor group(s), benchmarking on price, prestige, discount rate, merit guarantees, and core messages will help your recruitment team position you against the competition in the most appropriate way.
* Use data effectively. Of course, you need to be data-driven, but you also need to realize that past years' results and trends will be "best case" this year, especially yield and discount rates. Assume that need levels will increase and applicant pools will be softer. Consequently, you will need to create a "most likely" case and worst-case scenario for planning purposes. The most likely case may involve assuming a 2 percent decline in yield and a 1 to 2 percent increase in discount rate from the 2008 experience, while the worst case may adjust those variables even more, projecting a 2 to 3 percent decline in yield and a 2 to 3 percent increase in discount rate.
IMPLICATIONS FOR PLANNING
Assume higher levels of need, a softer applicant pool, and more "bad" debt for current students. Remember, it is better to budget for less net tuition revenue now than to cut budgets later; however, prudence is the word of the day in making budget adjustments. Remember, do not cut budgets in revenue-generating areas. Cut budgets strategically rather than across the board to enable investments and programs that can build new demand. A key to all of this will be in keeping lines of communication open. This means that the key metrics to track, mentioned earlier, should be shared with senior team members to avoid surprises. It means reprioritizing initiatives to focus on those most likely to increase revenue or reduce expenditures in noncritical areas.
Quite frankly, this may be an opportunity to make some of the tough decisions that would be politically unpopular in better economic times. It means the senior team must have a unified vision that's compelling, yet realistic and grounded in facts.
These are clearly unprecedented times without a relevant history to guide us. In order to be positioned to react and adjust to new behaviors and trends, each institution's leaders will need to be prudent, data-driven, and realistic. We hope the advice, comments, and suggestions we have presented here will confirm for many what needs to be or is being done and for others may expand the "readiness" agenda.
Kathy Kurz and Jim Scannell are partners in the enrollment management consulting firm Scannell & Kurz. They can be reached via their website, www.scannellkurz.com.
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|Title Annotation:||MONEY MATTERS|
|Author:||Kurz, Kathy; Scannell, Jim|
|Date:||Mar 1, 2009|
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