Smart Strategy or Delay Tactic?

Wanted to introduce an article from Inside Higher Ed.  Once again writer Kevin Kiley expertly zeros-in on poignant and telling symptoms that urge those who care about higher education to move more quickly past palliative tactics and come up with sustainable alternatives for the future... lead, or wait and see.

I believe it represents a case study of part of the "cross roads crisis" that highered is in (and in deeper than we may realize), especially relevant to private liberal arts colleges, in this case.

In some ways the bottom-line is "What do you do when you've run out of 'next tricks/tactics'?" Is using innovative recruiting a smart strategy to buy time or a cop-out to postpone looking hard at the toughest questions?

 
If "peak oil" has passed for liberal arts colleges, are you we ready with Plan B...?

------------------------------------------------

From "The Final Frontier"

"...liberal arts colleges may be getting to a point where marketing efforts -- such as targeting new geographic regions or adding new sports or academic programs that appeal to full-paying or high-achieving prospective students -- might not be enough to keep the colleges financially viable."

“'The reality is that the type of students that most colleges want to recruit doesn’t go that deep,' Hatch said....

"Right now such short-term moves [looking for new sources of students] are holding off a significant change in how liberal arts colleges operate....

"Over the next few years, Augustana is planning to undergo a significant strategic planning initiative that will confront some of the major challenges Bahls and others believe will affect colleges like theirs over the next few decades. Among them: how to incorporate technology into the curriculum, how to address declining interest in traditional liberal arts programs, and how to change the financial model to make it more sustainable.

"The goal of the recruitment expansion is to buy the time to get that process completed."

Read more: http://www.insidehighered.com/news/2012/05/25/denver-and-phoenix-could-be-last-new-hotspots-college-recruiting-then-what#ixzz1vslpLBM4 

Mea Culpa Sparks Needed Dialogue

"I readily admit it," said E. Gordon Gee, the president of Ohio State University, who has also served as president of Vanderbilt and Brown, among others. "I didn't think a lot about costs. I do not think we have given significant thought to the impact of college costs on families." 5/13/12, NYT

From the “Turning Points” Archive comes this 2010 post…

Paraphrasing the Clinton White House: “Lower Your Overhead, Stupid!”

High education is on high alert but taking very few proactive steps to address its deepening crisis.  All of the warning signs are there.  Outcries over price, uncertain funding (from all sources), and faltering demographics add to the din: there are fewer affluent families able or willing to pay.

Growing skepticism over the value of most private colleges’ education (relative to what families think they will have to pay), is driving record numbers of students to public institutions at the same time those schools budgets are being gutted, lowering the number of students the public sector can accommodate and leaving those who are enrolled with a diminished educational experience, albeit with the perception of affordability.

Community colleges, proprietary institutions, and on-line programs seem to be in the best position if enrollment growth is any indicator – although class selection and parking availability plague many two-year colleges – and they all have a common attribute: low price and low operating expenses.

In the simplest terms, college leaders can look at income and expense.  In the past much “planning” in higher education began by looking at mission, current business procedures, and then adding the occasional exciting new initiative… and then looking at known and anticipated revenues… and then raising student fees to cover the inevitable gap.

A hot economy – families feeling flush, buoyed up with ready access to private and government credit – allowed that model to flourish.  And colleges flourished with rich curricular growth and stunning expansion of facilities. 

Now the high overhead of maintaining that which grew out of a different, departed world is threatening legacy employee benefit programs, trimming back athletics, shuttering eco-friendly vegan dining halls.  Even academic programs are disappearing (these days “we can’t call ourselves a college without a philosophy department!” is countered by “we won’t be a college if we keep it!”). 

As colleges are being challenged to assess whether they can afford their values, the planning paradigm of the past has to be flipped around and managed.  Colleges have to forecast revenue first and then make expenses fit, and no matter how painful they have to do this intentionally and collaboratively, and begin doing it as soon as possible. 

No other enterprise would protect “sacred cows,” be timid about exploring all options, or wait to let market or regulatory forces drive them.  Higher education is too important to run on cruise control any longer.

“The Power of Strategic Thinking”

The Best First Step Yet

Retiring Smith College President Carol Christ leaves a legacy of exceptional scholarship and leadership in her years at Berkeley and Smith. 

In the aftermath of the economic collapse of 2008, President Christ sensed a growing disconnect between internal and external audiences, and forces.  Some on-campus partisans felt defensive and un- or under-appreciated as off-campus groups – some trustees and the media – seemed to goad with provocative questions like “are ‘purposeful inefficiencies’ outmoded” and “can you afford your values?!”

Guided by her passion for academe and a powerful practical sense that proactive steps needed to be taken – earlier rather than later – Carol launched the “Futures Initiative” at Smith.  Designed to be a candid educational exploration and dialogue, the project engaged all stakeholders and asked them to test their assumptions, be open to learning what they didn’t know, and come together with a shared sense of purpose, specifically Smith’s prosperity but more broadly the future of higher education.

What follows is President Christ’s conclusion to article “The Power of Strategic Thinking,” which was published in the Spring, 2012 edition of AGB’s Trusteeship magazine and is offered as a model of modern college leadership and responsible stewardship.

“The final test of the success of the initiative, however, lies in the future – in whether the project has begun to build a culture of strategic thinking and a willingness to experiment with pilot projects that are, in some sense, bets about the future. There is already some evidence that this is the case; several experiments with summer programs for high-school girls and an online course for alumnae on financial independence, adapted from our successful undergraduate program, are already in development. We will know more when the working groups involved in followup projects report at the spring board meeting.

“Whatever its concrete results, the project has taught us a number of important lessons. Smith, like many colleges and universities, can tend to live in a bubble. We all cultivate a kind of exceptionalism; we believe that our own institution, whatever it is, offers a uniquely enriching experience to its students. Many faculty and staff members, who, for the most part, spend their careers at Smith, know surprisingly little about other colleges and universities, particularly those outside their academic sector, and the primary expertise of most board members is not higher education.

“It is therefore salutary for both boards and campuses to take time to think systematically about trends affecting higher education institutions. We currently live in a period of greater change in higher education than any since the immediate post-World War II years. In such a context, colleges and universities will be well served by developing a culture of strategic thinking – asking, with a sense of curiosity and adventure, how we can best avoid the risks and take advantage of the opportunities in our rapidly changing world.”

Welcome to the Party

I was so impressed by Kevin Kiley's reporting on this important thread that i wanted to include his recent article in its entirety:  thank you Kevin and Inside Higher Ed!


Welcome to the Party, by Kevin Kiley, Inside Higher Ed

Small private liberal arts colleges with a regional orientation, such as the University of Charleston – a 1,339-student college in West Virginia with an endowment of about $30 million – have historically looked to the elites in the field, such as Williams and Swarthmore -- institutions with similarly sized student bodies but more than $1.5 billion in endowment funds -- as the trend-setters.

But, to use a phrase that’s popular in education these days, maybe it’s time to flip the classroom.

At a conference at Lafayette College last week, a group of about 200 administrators from some of the top residential liberal arts colleges in the country – those with national reputations, significant financial resources, and high demand, particularly among students and families with the means and willingness to pay full price – discussed challenges facing the liberal arts sector and how they might confront them.

Those challenges include a changing college-going demographic that will result in fewer upper-class students, the traditional pool for a residential liberal arts colleges; increasing skepticism among the public about the value of a liberal arts degree with no direct ties to a profession; the rising costs of educating a student, which will likely result in even higher tuition; and a changing understanding of technology that might require greater inclusion of technology in the curriculum, both as a tool for learning and a subject.

It is only in the past few years that much of this group has engaged in a national conversation about these issues. But to say the questions are new might overstate the situation. “Some of these issues might be new for them, but they’re not necessarily new for small privates,” said Richard Ekman, president of the Council of Independent Colleges, a group that represents the more than 600 small private colleges, including many that were present at last week’s conference. “It’s just that more of them are having to contend with these issues than in the past.”

Organizers of last week's conference invited only a small portion of the residential liberal arts sector – those that are ranked highly in U.S. News and World Report’s ranking of national liberal arts colleges -- to keep the conference small and focused on institutions with similar concerns.

The colleges that make up the rest of the sector, most of which don’t have the financial cushion of the elites, have confronted these issues over the past two decades. In that time, many have made significant changes to how they operate, from both administrative and curricular perspectives. Administrators at many of these colleges say the elites, which are now starting to consider these fundamental questions, might benefit from exploring how the rest of the field has adapted.

Administrators from such institutions also express more anxiety about the next few years and the challenges that lie ahead than do their elite counterparts. At the same time, they note that the anxiety and pressure can make them more open to experimentation and change than institutions that don’t feel as much heat. “If you’re enrollment-driven, you have to be open to change,” said Duane Bonifer, director of public relations for Lindsey Wilson College. “Either you’re open to change or you close.”

The conversation at the Lafayette conference had a more measured tone than the general conversation that surrounds liberal arts colleges. In general, the presidents at the conference said that while they plan to tinker around the edges and make some curricular and operational changes, they didn’t think the current challenges would lead to a fundamental revision of their model of education, which emphasizes face-to-face interaction with faculty members and a residential experience.  

But that confidence might be limited to the top of the pack. Bonifer from Lindsey Wilson said that while his college has never been in a stronger position with regard to enrollment and finance, he and other administrators are anxious that changes in the higher education landscape could make their current model irrelevant. “We all know that higher education is going to be different 10 years from now, we just don’t know what it will look like,” he said. “And that makes everyone so anxious.”

 
Bonifer said he could easily see a world where, in two decades, Lindsey Wilson looks significantly different in how it operates than it does today. That new model could include more distance education programs, more courses taught online by faculty members at other institutions, or more professional and graduate programs. The big concern he said he and other administrators have is that nobody knows exactly what changes might be required, so adopting any solutions right now could be counterproductive. Most of the presidents at the Lafayette conference wouldn’t share that view about their own institutions.

While some small college administrators are afraid of what they see on the horizon, others say they’re facing very real challenges right now. “When you have for-profits, distance education, a national emphasis on community colleges, and on the other side you have economic challenges that have a real impact on what families do and the decisions they make, you better be looking at innovating,” said Edwin H. Welch, president of the University of Charleston. His institution made headlines in November when it announced a 22 percent cut in tuition. “We’ve got to be thinking, ‘How can we deliver the same level of quality at a lower cost?’ ”

The fact that such colleges are worried is not something the rest of higher education is celebrating, but that pressure can drive such institutions to experiment, which will provide examples for others to learn from.

“Don’t take anything off the table,” Bonifer said. “You have to be able to consider every opportunity. You can’t outright say no. The question should be, ‘Why can’t you do something?’ ”

Lindsey Wilson, which has an endowment of about $50 million, has made some significant changes in the past few years, including opening the college up to more transfers from community colleges. And it is not alone. Many colleges that for years taught a traditional liberal arts curriculum have in added professional and master's programs, such as nursing and business. Others have changed their orientation to try to tap into new markets and reach certain demographics.

G. T. (Buck) Smith, president of Davis & Elkins College, another small private institution in West Virginia that traditionally taught a narrow liberal arts curriculum, said in recent years his college added programs in environmental and sustainability studies, hospitality management, and Appalachian studies, and is considering adding programs in early childhood learning, clinical psychology, and religious studies. "We haven’t survived with a silver spoon," he said. "Rather we know what it means not to rest on our laurels, but to scrap for every dollar, and then spend it wisely."

At the Lafayette conference, presidents noted that they probably have something to learn from what has been happening among lower-ranked colleges, and several presidents said they would like to expand the conversation. Ekman said there is a role for his organization to play in facilitating that discussion. At its annual presidents' institute next January, the council hopes to hold a workshop that brings together liberal arts colleges across the spectrum to tackle some of these issues. “Everybody needs help thinking about these issues,” he said.

One of the major themes to emerge from the Lafayette conference, pushed heavily by representatives from the Andrew W. Mellon Foundation, which helped support the conference, was that liberal arts colleges need to do a better job collaborating, not just with one another, but also with other sectors of higher education and beyond.

Presidents and other administrators said that, in general, there has been some reluctance among national liberal arts colleges – which often compete in admissions – to get together on academic matters. But there’s nothing like a crisis to make you rethink who your friends are, which was evident in the conference itself and organizers’ calls for further discussion about these issues.   

It is also evident among those institutions that have had a longer and deeper struggle, which have begun integrating in significant ways. The Independent College Enterprise, a group of nine small colleges in West Virginia, Virginia, North Carolina, Tennessee, and Massachusetts, has been collaborating on administrative services since the late 1990s. The group pooled resources to purchase shared administrative software, which the presidents in the organization estimate to have save each campus millions of dollars since it was purchased.

Sharing the service also allowed the consortium to share the employees required to service it. The consortium has seven staff members, all of whom are specialists in some area of the software, such as a database administrator and a student systems coordinator. If the campuses still ran their own system support, they would each have three staff members who were generalists in the software. As a result they get better service, Welch said.

The group is also starting to share some academic programs. Despite stretching a geographic area of more than 300 miles, five colleges in the consortium -- University of Charleston, Bethany College, Davis & Elkins College, Emory & Henry College and West Virginia Wesleyan College -- are launching a shared remedial math program next year. In the program, funded through the Teagle Foundation, a faculty member hired jointly by the consortium will teach a course through distance education technology to students on the five campuses. At each campus, local facilitators will help students learn the material.

“If there is some way we can save institutional dollars while delivering the same educational experience, that could be both better for the school and better for the students,” Welch said.

Michael P. Mihalyo, chancellor of Davis & Elkins, said the consortium chose to start with a remedial math program because the institutions faced a growing number of students requiring remediation.

The University of Charleston is also putting together another shared course with West Virginia Wesleyan, wherein a faculty member at West Virginia Wesleyan will teach American history courses to students on both campuses. That professor will also occasionally travel back and forth between the two campuses.

Charleston and its partners are hardly the first group of institutions to collaborate in this way. Small colleges across the country have formed several partnerships to share faculty in certain fields. Languages have proven particularly popular. This week a group of five liberal arts colleges in Texas announced that they would be teaching languages across the institutions using video conferencing software. The Wisconsin Association of Independent Colleges and Universities, many of which are regional in orientation and don’t show up high on the U.S. News rankings, also has some resource sharing programs in place.

 
Welch said the college is working to balance the financial challenges it faces with trying to maintain the identity of a college known for face-to-face interaction. “The challenge for residential liberal arts colleges is that, understandably, there is a great commitment to face-to-face interactions,” he said. “At the same time, can we take advantage of efficiencies of technology and distance learning?

“We can experiment with blended learning without endangering the fact that students need residential experience and talented mentors in learning.”

But the proliferation of such groups likely provides good fodder for places that are looking to integrate in deeper ways.

Bonifer said the country’s top liberal arts institutions aren’t likely to get knocked out of their positions any time soon. The larger threat, he said, is that the world will continue to change around them. “These schools that are good schools are still going to be good schools,” he said. “But they’re not going to be the only good schools.”

Has Private Higher Education Hit the Price Ceiling?

Is “college wasted on the young?”

When I was Admissions Director at Penn I remember dreading when the annual cost of attendance would begin with a “2.”  About twenty-five years ago, when Penn crested the $20,000 annual tariff, I hosted an admitted student reception in Chicago and, after the opening remarks pivoted to the meet-and-mingle, a dad accosted me by the podium.  His remarks presaged the ensuing, ongoing dialogue: “$20,000 a year!?  That’s ridiculous!  I’d never pay that much for Penn – Princeton maybe – never Penn!  This is ridiculous!” As ridiculous as a $20,000 per year price tag seemed, this dad did bring his son to the session (I do not remember where the boy ended up). 

Many have been wondering when higher education will “hit the ceiling,” what price point will roil the markets?  I may have some answers.

We hit the ceiling about 25 years ago but haven't been spanked hard yet because enough parents seem to continue to care more about educating their kids than insuring their own retirement.  But that has been changing, and it seems the pace of attitude change is accelerating.

I recently polled my Amherst College classmates.  Most have sent their kids to college and shared the refrain “I am glad that is over.”  When asked if college is worth $60,000/year the vast majority said “no,” unless 1) it is a truly resource-rich, prestigious institution and 2) their child was smart/ambitious enough to take full advantage of the experience.  Their replies suggest a new view of expensive colleges as an intellectual and cultural Disneyworld that turn Shaw’s suggestion that “youth is wasted on the young” on its head: “college is wasted on students!”

(That same group of Lord Jeff alums unequivocally said that they "hire performers not colleges names," so the residual value of the Old Boy/Girl Network has quickly waned.)

Taking a broader look I gathered information from the parents of students applying to expensive private colleges this spring.  The results would surprise anyone who has not spoken to a parent recently:  there are fewer wealthy families out there and those who are looking at pricey colleges agree with my classmates, they are willing to pay much less than stick price.  In fact, the most affluent indicated they would pay about a quarter (24% to be precise) of what the national financial needs-analysis suggests they can afford.  This data display was called “eye popping” at a recent gathering of college officials:



As good a job as colleges do identifying and articulating their Value Propositions, that won’t be enough.  One college president recently made the comparison to luxury car sales, and the audience appreciatively got the metaphor.  Walking home two things occurred to me: parents are “sold but not buying…” and almost 150 colleges charge as much as four luxury cars for a degree.

In addition to the job of recruiting and selecting a class, admissions directors are also a great source of market intel.  We have been watching the price ceiling for a long time, and have seen it is more elastic than brittle.  But that is changing and our message to our colleagues in the most senior leadership positions is “pay attention.”  Very soon a rebalancing of overhead expense and revenue will occur.  It is not too early to begin comprehensive examinations of ways that might most successfully work.

The Hot New College Amenity: Affordability

A lot is going on in and around higher education now.  Politicians pontificate, trustees debate tuition increases, parents worry about tuition increases, and kids are swamped with recruiting material.

When colleges discuss tuition pricing there can be a disingenuous "this is going to hurt me more than it will you" undertone to the dialogue. Disingenuous because colleges have been rolling up price with abandon, and been rewarded for it.  But now the unrelenting pattern of price increases, the current economic straightjacket, and some pundits identifying a link between increases in government assistance and further price spikes are combining to turn the tide.  Colleges do face the very real possibility of feeling the hurt more than families.

Mt Holyoke College is perhaps the most high-profile college to realize that, as tough as it will be to leave money on the table now, it might be even tougher not to: by deciding to hold next year's tuition at this year's level, Mt Holyoke signals it "gets it" and positions itself in a potentially stronger position in the long-term... which is the way leadership is supposed to think.  Last year Sewanee reduced tuition by 10% and the Sage Colleges have held tuition constant for the past three years, both colleges have been rewarded for their stance, with enrollment up 24% at Sage.

 Most parents (80% in a survey of the Class of 1976 at Amherst College) feel modern amenities – attractive as they may be – are the main culprit in pushing price past a point they can or will pay.  And those who cannot pay state in no uncertain terms that there is a clear outside limit to the amount of future earnings (AKA loans) they are willing to garnish.  It seems affordability is the most desirable amenity this season.  (That same group of Lord Jeff alums unequivocally said that they "hire performers not colleges names," so the residual value of the Old Boy/Girl Network has quickly waned.)

Yes, the wealthy are willing to pay more, but... other information shows that the least affluent are willing to pay close to what the common financial aid formulas suggest.  That same analysis showed, staggeringly, that with each tick up the affluence scale, the ability to pay quickly and far outpaced the willingness to pay: if the poorest would offer 88% of their expected family contribution, the wealthiest would offer 24% of their fair share.  It seems questions about the value of an expensive college education are pitted against lifestyle concerns here-and-now and in retirement.

The Mt Holyoke story is newsworthy because of the oddly contrarian nature of the decision.  When an institution with a $600 million endowment and a robust applicant pool takes the long view and decides hitting the $75,000-a-year mark on annual attendance isn't a net positive, we know the days of the "Chivas Regal Syndrome" – when price was a proxy for quality – are over and, according to parents and pundits: good riddance.

Four years ago a dad from California wrote "Colleges have to learn to operate more efficiently. Maybe the answer is a 'no frills' education: forget palatial grounds and touchy-feely 'campus life'; just bare-bones classrooms, virtual libraries, and dedicated instructors (not researchers)."

 In January a group of private college presidents met at Marco Island, Florida.  The topic of the sustainability of the status quo came up repeatedly.  In the Q&A of one session a president offered this view as to why the wake-up call hasn't been heeded: most colleges "haven't gotten to the point of desperation" that would encourage a different approach.  Many parents have gotten to that point and they may be applauding Sage, Sewanee, and Holyoke.

We are reminded that there's always more room to maneuver, to be thoughtful, and enjoy a broader range of options earlier rather than later.  Why wait to get to the point of desperation?

The value of a college degree has never been more important nor has the value of an educated citizenry.  That is why the issue of college access and affordability is so hot.  All stakeholders have a role to play, and leaders on the provider side need to make some difficult and forward-thinking decisions as responsible stewards of an important national resource.