Higher Ed: The next bubble

Student debt, rising tuition push industry's limits

by Megan Rogers Albany Business Review

Diminished job prospects, student debt and a shrinking middle class are all hanging over higher education. It matters in a region that's home to nearly 20 colleges and universities. What they are doing before the bubble bursts.

Financial analyst Hugh Johnson was optimistic in his forecast for investors and business owners in 2014: An expanding economy, a lower unemployment rate in New York and more opportunities because of technology.

But higher education? Pop.

A bubble is looming over the higher education industry, said the chairman and chief investment officer at Hugh Johnson Advisors LLC in Albany, evidenced by dipping enrollments, fast-rising tuition prices and growing student debt. It's impossible to predict when the bubble will burst, but the higher education bubble "is staring you in the face," said Johnson, one of the foremost economic analysts in the country.

If the higher education business model collapses, colleges and universities that didn’t alter their business models will face draconian cutbacks or closure. In the Capital Region, home to nearly 20 higher education institutions, the watermarks of a burst bubble would be devastating.

Rising college costs have been part of the national conversation for at least a decade, said Amy Laitinen, deputy director for higher education at the nonpartisan think tank New America Foundation. But as more students graduate with debt and are unable to find jobs to pay off loans, whispers of an unsustainable business model have become louder in the past five years, she said. It’s the next two years that could be the most fascinating, she said.

As tuition has skyrocketed, outpacing the increase of median family income, enrollment has declined at many colleges and more students are taking out loans. Student loan debt topped $1 trillion in 2012, and topped credit card debt last year. Simultaneously, colleges and universities are investing in infrastructure and programs, like a new student center at Siena College and more online programs at The College of Saint Rose, based on the assumption that they’ll be able to draw more students.

"They've had no choice," Johnson said. "If they're going to continue to expand and increase their enrollments, which is their lifeblood, they're going to have to compete."

Johnson said the industry is in a stage of distress and headed toward the final stage of a bubble, the stage of revulsion, where colleges and universities resort to extreme measures because they haven't generated enough tuition revenue to repay infrastructure upgrades built to bring in more tuition dollars. In that fourth stage, colleges that aren’t generating enough money from tuition or elsewhere will be forced out of business. Others could default and reorganize, unable to pay bondholders loan interest. Private colleges that rely on tuition and endowments are at increased risk, he said. Johnson isn't the only one with these concerns. Mark Cuban, owner of the Dallas Mavericks, recently penned an article for the Huffington Post, asking if colleges will go out of business.

The median family income rose 22 percent between 1970 and 2010. At the same time, public four-year tuition rates increased more than 200 percent and private four-year tuition rates increased slightly less than 150 percent, according to the Delta Cost Project at the American Institutes for Research, a nonpartisan research organization.

As tuition increases, so does student debt. New York's Class of 2012 graduated on average with $25,537 in debt, below the national average of $28,400, according to the Project on Student Debt at the Institute for College Access and Success, a nonprofit research organization. In 2005, the average student debt in New York was $18,795, according to a Project report.

Among local colleges analyzed, The College of Saint. Rose's graduates had the highest debt average of $34,919 and Skidmore College graduates had the lowest at $22,753. The Sage Colleges had the highest proportion of graduates with debt at 88 percent and Skidmore College had the lowest at 42 percent. The project did not have data on Union College in Schenectady.

Private colleges are likely to face more serious repercussions than public institutions, which will be able to rely on public funds, Johnson said. And if the stock market falters, private colleges would be in worse shape without revenue through endowments. An increasing stock market would be "the unexpected gift horse" for private colleges, he said.

For those graduates who fall behind in student loan payments, the bubble is about to burst, too, Johnson said.

RPI student Timothy Breen anticipates he will graduate with $90,000 in student loans. His roommate, Frank Abissi, hasn’t taken out loans yet, but said he’ll likely graduate with $35,000 in student loans and then pay them back over 10 or 20 years. The juniors, both of whom are studying mathematics, said it was the value of an RPI education, not the price tag, that brought them to the private college in Troy.

"If it's a good enough school, you pay tuition with the expectation you'll be able to get a job," Abissi said.

College costs are rising at the same time more people feel they need a degree to make a living and reach the middle class, Laitinen said. The two forces are on a collision course as some students get priced out of traditional residential colleges, she said.

"There's clearly the sense, and a growing sense, that higher education is becoming too expensive and maybe it's not providing all that is needed," she said.

If there's an industry bubble, the reverberation could be deep in the Capital Region, where education is a big piece of the economy. Independent colleges and universities in the Capital Region employed more than 11,200 individuals and contributed $3.7 billion to the state economy in 2011, according to a study by the Center for Governmental Research Inc. for the Commission for Independent Colleges and Universities.

Colleges will need to soul-search, Laitinen said. Are they providing enough value? If yes, how can they relay that message to potential students? And if not, how can they offer more value?

Some colleges, like Converse College in South Carolina and Concordia University in Oregon, gained attention in recent years when they reset tuition, cutting their sticker prices by 43 percent and 33 percent, respectively.

Sage College's vice president for marketing and enrollment management, Dan Lundquist, who also researches families' willingness and ability to pay for college, doesn't think the trend will catch on. Colleges won't follow suit because they worry that if they cut tuition, "it looks like they’re having a fire sale," he said.

Sage Colleges took a different approach and froze tuition for five years. The strategy has increased both the number of applications by 1,627 between 2008 and 2013 and tuition revenue by $7 million in the same time. It’s a controversial move among board members, Sage President Susan Scrimshaw said.

"There's a whole strategic set of issues for colleges today. How are we going to survive with the changing demographics? With the fact that we have to contain costs (which we have at Sage)?" she asked.

There's no simple solution. Siena College is taking a two-pronged approach. It has invested in multimillion dollar infrastructure improvements since 2010, including plans to remodel the student union, to increase enrollment. The Catholic liberal arts in Loudonville is looking to add some graduate programs to broaden revenue streams from its education programs, Siena College President Father Kevin Mullen said.

"We have clearly heard the message: You can't just have one offering, like undergraduate program and expect to be competitive in this market," he said.

Sage, Siena and other local colleges all saw their endowments investment returns grow between 2012 and 2013. While most increased tuition prices in the past 10 years, enrollment numbers have remained relatively flat. RPI’s enrollment grew by 543 students over the 10 years, second to Fulton-Montgomery Community College's 832. Both the Sage Colleges and Skidmore College saw an increase of 216 students. The College of Saint Rose's enrollment dipped by 139 students, Maria College's by 125 and Siena College by 116.

"A lot of folks would argue a number of residential, mostly private, colleges that will thrive because people always want to go and can afford to go," said Thomas Begley, dean of the Lally School of Management at RPI.

Still, many in education are anticipating some sort of shakeout because of technology disrupters. Colleges are exploring offering alternatives to traditional higher education, like competency-based education programs, certificate programs or online modules to harness some of the appeal of new educational models. For now, area colleges say they're prepared to weather the economy. But they need to be wary, Johnson warns. The burst will move in slow motion across the higher education industry.

"None of this happens real fast. It happens gradually over time," Johnson said. "My bottom line is, I see it coming."

Denial -- and disapppointment -- along the Mohawk...and Hudson...and Schuylkill, Susquehanna, Mississippi, and Willamette

"HOW IS IT that so many higher ed leaders (and so many that we know and believe are “smart”) live in professional denial?

"It is unbelievable, and so discouraging to hear/tell the same story over and over and have the status-quo be so tightly held onto...."

So ended an exchange between me and a friend, a dad with two kids in private colleges (who attended independent high schools) and who, himself, went to an independent school and then a private college.  My friend is a sophisticated, successful guy who is feeling slowly torn away from familiar educational cultural roots, and is feeling a heartsickness for himself and others. 

Part may be sentimentality and part may be frustration of the financial squeeze he feels but his views are far from unique, as we see “full pay” applications declining at all but the Marquee Name colleges, and yield on the more affluent admits dropping too.

As I recently told a college president friend “your per-family net revenue – what people pay after financial aid – can fairly be seen as your school’s public auction value, plain and simple.”

 

Here is my reply to my friend's message that his appeal for financial aid was denied, followed by his response:

 

"I’m sorry your financial aid appeal was unsuccessful.  You did all you could, so you can't fret about leaving any stone unturned.

"Many factors squeeze families....and colleges: families are pressed by escalating cost-of-attendance (outpacing earning and retirement savings) and colleges have investments in expensive overhead, ironically, intended to cater to the market.

"We are all 'living the stress' and will see what happens.

"You know my own wish is that more places try to do something like what Sage has done: holding price AND overhead expenses down…what it lacks in glamour and prestige, it makes up for in practical utility.  The market speaks: Sage’s enrollment and revenues have never been better."

 

"So true – something has to give as we have discussed. As long as the supply of students holds up, trustees have no real incentive to downsize the model to hold the price down or even cut it. In ten years Connor will be faced with a SUNY option or a scholarship option if it exists. Every parent has the same choice and hope. In the end, unless I’m missing something, schools will lose this tug of war once foreign students see the lack of value in exchange for their full pay admission."

"Twenty five years from now no one (domestic or foreign) will be willing to pay $100K+ per year for a four year romp in the 'expensive overhead' environments while the masses have used the same time to obtain specific skills for specific jobs. I’m all for a liberal arts education but the concept is becoming as quaint as it has become unaffordable.

"To that end, thirteen years at prep school is an equal waste of money – their 'classic basics' model is already way outdated. Their strength remains their ability to teach reading comprehension and writing to marginal students who wouldn’t otherwise develop those skills. However, if your kid doesn’t need that wind at his/her back then public school is the cost effective choice.  Admission stats (public-private ratio) have supported this shift for at least ten years.

"The current bump in admissions will fade and then what? Same old same old IMO.

"If I had my way I’d yank her after this year – have her finish at SUNY – leave some $$$ room for graduate school but only if more education is absolutely necessary. She wants a degree in psychology - she’d get as much from the Peace Corp at zero cost. The problem is reversing course mid-stream - very abrupt – hard to accept for the student. However, she might thank me later if she doesn’t carry $50K in debt into her young adult life. Tough decision."

Mismatching and Undermatching:
Performance vs. Pedigree

Two pieces in the Sunday, March 17th New York Times – an article and an essay – were stimulating “bookends” to the ongoing conversation about social engineering, in college admissions or employment hiring practices. 

David Leonhardt’s “Better Colleges Failing to Lure Talented Poor” presents the findings of a study that “definitively” shows that many high school students miss out on elite college experiences, mostly by not applying but also by choosing to stay closer to home.  Some readers rejected the “prestige is better” inferred in the article’s title and others felt there was a paternalistic “prestige knows best” tone to the piece.

 

The implication that smart kids who miss out on "the best colleges" are somehow further disadvantaged is stretched too far. In his blog on March 18, 2013, Matt Reed writes:

In my observation, anyone who puts too much faith in a Great Chain of Being is missing the point.  Having attended one of the elite colleges myself, I can attest from personal observation that what makes them different from other places isn’t so much academic rigor as a sort of unconscious affluence.  Students there don’t work thirty or forty hours a week for pay while they take classes.  And the assumption that “exclusive” equates to “high quality” is both antithetical to public higher education, by definition, and a reversion to the bad old habit of mistaking inputs for outputs.

Referring to inputs and outs – what Bowen and Bok called “selection vs. treatment” effects – in his Times essay on Sunday, Dan Slater describes “mismatch theory”: 

It’s the idea that affirmative action can harm those it’s supposed to help by placing them at schools in which they fall below the median level of ability and therefore have a tough time. As a consequence, the argument goes, these students suffer learningwise and, later, careerwise. To be clear, mismatch theory does not allege that minority students should not attend elite universities. Far from it. But it does say that students — minority or otherwise — do not automatically benefit from attending a school that they enter with academic qualifications well below the median level of their classmates.

So often the focus in special treatment arguments is on who isn’t advantaged in the process.  Slater turns the tables in an important way, writing about those (not only minority students) for whom special treatment turns out to be the booby prize:

…some minority students who get into a top school with the help of affirmative action might actually be better served by attending a less elite institution to which they could gain admission with less of a boost or no boost at all.

As an undergraduate at an elite college I saw a variety of "special admits" – who were well aware of their status – be marginalized while the college, arguably, benefited by their presence:  athletes, sons of big donors, racial minorities, and even some women described feeling “ornamental.”

Most colleges seek talented and diverse student populations that will have a general educational impact on each other, in and out of class.  But there is a superficial and disingenuous quality to crafting a class (through selection) that fits an idealized view but which the college may not deserve.  Many colleges “talk the talk” about diversity but a much, much smaller number actually invest in the structure and resources to create a truly welcoming environment that is likely to support success for a wide variety of talented kids.

While seeking to enrich the educational experience they offer, it is incumbent upon a college community to anticipate and genuinely attempt to meet the needs of students who may be non-traditional or out of the mainstream of the predominant campus culture.

Many assert quality and desire greater diversity.  To earn it, colleges have to work for and deserve quality and diversity.  Authenticity is powerfully attractive.

We know from students, parents and counselors, that the ultimate college selection is based upon a student’s sense of the “fit” between their background, interests, and aspirations.  It is, after all, their choice.

 

Not to diminish the high potential of resource rich college experiences, it is well worth considering the notion that many students have wonderful educational experiences at the best college for them which very well might not be a marquee-name institution.  In fact, others may squander advantages that they stumble over-and-around at high-prestige colleges.  I've seen both happen.

 

Rather than urging the Amhersts and Bowdoins to do the recruitment equivalent of hydrofracking for undertapped talent, how about focusing upstream in the human capital development pipeline? 

 

Respect individual choice, support preparation for and education about the world of opportunity that exists, and invest in the vitality of the incredibly diverse education systems we have which, taken together, can be the best for all.

The Sage Price Promise

This past week the Sage Colleges Board of Trustees adopted the Sage Price Promise, which guarantees entering new students that undergraduate tuition will not increase for the next four years.

There were a number of reasons Sage did this, all of them worth highlighting in this period of great concern about higher education affordability. 

·  Rising cost:  the National Center for Education Statistics has shown that in today’s dollars the price of a college education has tripled in one generation.

·  Consumer confusion:  a recent study by the College Board showed that most families don’t understand the difference between “sticker price” and their actual cost, after financial aid.  The mood seems to be “confused at best.”  Last year colleges launched an educational tool called the Net Price Calculator but less than 10% have used it.  More needs to be done. 

·  Making sacrifices:  delivering quality education is expensive and labor-intensive but all colleges have room to trim costs that have driven their overhead expenses up which has led to the price-tripling families experienced.

 

·  Social good:  college is not for everyone, but access to college for those who wish it should be attainable for the personal and community benefits higher education can bring.  Seen as an investment, everyone has a stake and everyone – from students to parents to government – plays a part.  Within reason, student debt is not a bad thing; it is “skin in the game.”

We at Sage believe this will be good for our families and for our college.  Having held tuition and fees flat for the past four years and realized a 25% enrollment growth – with corresponding increases in revenue that support qualitative improvements to students’ experience – we see little risk and much reward.

As educators and parents ourselves, we look beyond our campus and share the concerns that seemingly dominate the media and political dialogue: a college education has never been more important, yet concerns about paying for a college education have never been more strident.  An acquaintance from Chicago wrote me yesterday and said “Dan - saw your news today about the tuition freeze.  I and many other parents applaud your effort.” 

 

This will be good for Sage and, we hope, be a challenge and inspiration for other colleges.

 

In this post Lundquist discusses the “increasing divergence between college price and family ability and willingness to pay,” and he presents a potential conflict of interest that may be hindering change.

“Why not have committed, knowledgeable stakeholders – cut loose from self-interest – at the helm?  A more proactive stance by college leaders is in the best interest of good business and good education.”

 

“Colleges on the Fiscal Cliff: Students Bearing the Burden”

This week we have seen college leaders take what has been tabbed “baby steps” by some and “cop out” and “proxy for meaningful change” by others regarding financial aid reform.  This was followed by the Moodys’ report on the continuing divergence between college price and families’ ability (and willingness) to pay.  Some themes are becoming familiar….

When I was asked to speak to groups twenty to thirty years ago it was almost all about admissions.  Recently the focus has taken a sharp turn away from the getting in part to the paying part.  Affordability IS becoming the “hot new college amenity.”

A guidance counselor group just invited me to present on a topic they have titled “Colleges on the Fiscal Cliff: Students Bearing the Burden” which gives me good insight into what they are seeing of highered economics in the high schools, and it confirms every conversation I had in my travels around the country recently.

This fall I had the opportunity to speak at a number of national and regional professional conferences where issues of college access and affordability were addressed.  Besides the fact that I did not hear one single bit of news that made me feel sanguine about the continuing divergence of college price and families’ ability (and willingness) to pay, I only heard increasingly shrill negatives… incredulity and skepticism about “runaway” college price increases.

No one needs Moodys Investor Services to get that message.  Ask and listen to any financial aid or admissions director: it really is later than we acknowledge.

Right Pricing: Good Business and Good Policy

If I only cared about colleges maximizing revenue I would still advise college leaders to fix their price structure… so they can stay in business.  But it is of course more than that, and finding ways of structuring the various models so they are affordable (and have value, not mutually-exclusive propositions) is an imperative for good education reasons in addition to smart business reasons.

Here is a letter from the mother of a student just admitted to a “top 1%” private college.  In addition to underscoring the financial stress increasing prices create – even for colleges with liberal financial aid policies like this school – it also is tinged with the heartbreak we set up by so successfully promoting the highered dream.  (Highlight at the end and “anonymizing” the college added by me.)

Case Study: a family in the “skid zone”

Private College is contributing a total of $24,000 but that includes 3K loan and 2K work study on top of the 18,900 grant.  My daughter is expected to contribute 2K, and we are expected to contribute 32K.  Additionally – any scholarship she gets will decrease her contribution – not the parent’s, so they’re using her contribution through work study and loan as part of their contribution – not ours. 

I think our expected family contribution is around 32K according to FASFA because our income is right around 140,000.  I think my husband is actually making about 95K this year, and I make about 42K.  BUT the reason my husband’s income is so high is because he has worked a ton of overtime.  I don’t feel comfortable getting into a situation where we have to depend on him working overtime in order to make ends meet. 

You would think that on paper, we have enough to cover the 32,000 - but when balancing our bare bones monthly expenses and income and we barely break even.  What do people do in our situation?  What options are there?  I asked Private College this, and they say that she can get a Stafford loan for $5,500.  But that was about it unless we want to take out a loan ourselves. 

I’m really so upset by this because we would never have dreamed this opportunity for our daughter and here it seemed like it was placed in her lap – and I would hate to have to turn it down being this close, but the tuition is more than my yearly salary -- and not just here, but college in general!

 

A conflict of interest?

Hundreds of millions of dollars in benefits go to faculty and staff who work in higher education.  Many of the same people who set policy and determine budget priorities at colleges are immune from major worries that beset most families: tuition costs.

A common benefit private college employees enjoy is subsidized tuition; for themselves, their partners, and their children.  And this benefit has the peculiar effect of giving the greatest benefit to those who least need it.  The more affluent faculty and administrators who do not qualify for need-based financial aid still are eligible to receive free or reduced tuition.

I think these policies deserve serious review and discussion.  I know there were good reasons to implement them decades ago and there may be good reasons to keep them – or keep parts of them – today.  But I also have to believe that if college policy-makers had to face college financing the way “civilians” do, we would have seen different price trajectories over the past twenty years.

This fall a TIME Magazine poll highlighted disparities in perceptions of highered price and value.  As TIME reported, “members of the general population were twice as likely as college leaders to say that college isn’t worth the price: 80% of U.S. adults agreed that at many colleges, the education students receive is not worth what they pay for it. Only 41% of college leaders agreed with them.”  But that 41% figure is spurious, in my opinion, because “college leaders” are disconnected from a significant part of the value equation: paying.

The TIME story went on underscoring public distrust and implying the wisdom of a more proactive stance by those college leaders: “more Americans support federal price caps or controls on tuition (73%) than college leaders (16%), largely because the public doesn’t seem to think colleges can control them on their own. More than 90% of Americans said colleges aren’t doing enough to improve affordability. Only 56% of educators agreed even as roughly the same percentage (58%) said they don’t think the cost of a college degree will ever stop rising.”

More and more Americans like the family in the case study above are having trouble dealing with college costs now.  If the pundits are right that the next generation will be the first cohort to be less-well-off than their parents, we will witness college-bound families going from stretched to priced-out in a generation even if price increases slow. Under-capacity campuses, with eroded academic quality, and an under-educated populace are in no one's vision of a desirable future. Let's act soon to minimize cost barriers to higher education.

Why wait and let market forces (family choice) or regulation (government funds) drive change?  Why not have committed, knowledgeable stakeholders – cut loose from self-interest – at the helm?  A more proactive stance by college leaders is in the best interest of good business and good education.  Maybe if we had to stand in the checkout line change would come more quickly.

Dustbowl Thinking

Ken Burns' new documentary tells the story of the Dust Bowl blow after body-blow: the brutally unrelenting natural challenges, the grim perseverance and astonishingly unfailing hope of Depression-era farm families, and the glimmers of actual relief that are quickly followed by even worse calamities.

Staring straight at the camera, one stoic survivor states the prevailing frame of mind with blunt candor. "We figured if we failed, we didn't try hard enough. We didn't do anything different the next year, we just tried harder."

When you only know one way – when you can only envision one way – then failure (or success) must be simply a matter of effort.  If innovation is any measure, until recently much of higher education seemed stuck in Dustbowl Thinking.  The good news is that seems to be changing.

In late September, President Raynard Kington wrote Grinnell College alumni saying “I think everybody realizes that something has to change or that we'll have to face even tougher choices down the road.”

Swarthmore’s President Rebecca Chopp, in a speech on her campus last October, acknowledged the changing landscape and the challenges to liberal arts colleges and suggested fresh approaches to engaging what appears to be a dwindling audience.

A worry that lingers is whether reframing the liberal arts’ value proposition is dangerous… or insufficient. Adherents long for the indemnification of the liberal arts but some push back with ambivalent cynicism, happy to see the effort but skeptical whether deep appreciation and commitment can be sparked by mere marketing communication campaigns. “Have You Driven the Classics…lately?” may receive (muffled) applause but will it reverse troubling trends?

Paying serious attention to change and looking outward are good starts, but the prevailing consumer culture has shifted over time.  New audiences in new markets invited to college are pragmatic and hugely practical, and arrive with an under-appreciation of classical academic values.  And the words “liberal arts” probably create confusion, assuming they receive attention at all.

I haven't polled any but I think it is safe to assume that few students select a liberal arts college for the liberal arts.

I do know many select college for prestige, perceived value, cost (tuition freezes and no-loan policies help), and campus facilities. And I believe most of those who attend liberal arts colleges develop an appreciation for this education during and especially after their time as students. 

Recently Cappy Hill, Vassar's president and an expert of the economics of highered, shared her worry that the liberal arts were heading back to their elite roots. My "back to the future" reply was that, perhaps, the liberal arts model might become more like European monasteries, with devotees attending to illuminated manuscripts and deliberately-paced contemplation inside the drawbridge surrounded by a brutal and chaotic world outside....

Having had the good fortune to be immersed in the higher education environment for most of my life – I grew up on the Haverford College campus and then did my undergraduate and graduate studies at Amherst and Harvard – I, well, I think I “get it.”

Also having the great good fortune to spend the past thirty-five years working in an usually wide range of types of colleges and universities, and being privileged to counsel families that represent that diversity, I think Presidents Hill and Chopp are both right. I believe the liberal arts' shrinkage will continue and I hope its champions will begin to rethink its value – "compelling narrative" – in a modern context that takes into account the lack of awareness, understanding, and appreciation in the market.

It won't do to either dismiss public disinterest or pine for the recent good old days. The future of the liberal arts and highered is important and unknown. It will be significantly affected by environmental factors beyond the control of academe but influenced by leadership from within academe.

• I know a college that introduced an honors program named the “Renaissance Baccalaureate.”  Despite decent promotion, it drew little attention… and lots of misspellings.  It was re-launched as the “Discovery Degree” – with the exact same features – and was an immediate hit.
• In response to public concern over price, a number of colleges have adjusted family expense through combinations of freezing top-line price (in some cases even cutting it) and reducing family cost through financial aid discounting. 
• Similarly, acknowledging the mounting worry about ROI and jobs, colleges have beefed up career services, alumni networks, and internships.

Proactive, market-sensitive tactics like these have yielded positive results, making their institutions stronger with no sacrifice to integrity or dignity. Prosperity and – outside of monasteries – currency are good brands in highered!

Taking an audience-eye-view is fundamental to successful communication.  Instead of sticking with words we know and are comfortable with, how about deconstructing the constituent elements of what makes a liberal arts education so compelling?  Let’s see what emerges and use those discoveries to try and find ways to break down the language and values divide.   

Whether through price, product, or name, a part of our challenge is to make a fresh case for the liberal arts, in-and-of-themselves and as a means to a fulfilling end.  If I’m right, and deep appreciation of the liberal arts comes during or after the partaking, we better define, articulate, and deliver in methods that will be received and appreciated compelling new “now-reasons” to consider our institutions.

Dangerous Band-Aids, Part I:

The Legerdemain of Modern “Enrollment Management”

 

Q: “When can apparently good news be bad?”  

A: “When it provides a false sense of security.”

 

A growing number of college presidents are acknowledging the higher education operating model has to change (though if TIME magazine’s reporting is to be believed, a startling number are not of that opinion, in direct contrast with their customer base).

One hopes these presidents are listening to their in-house market experts, the admissions and financial aid staff whose work bridges the gap between important on- and off-campus constituents.

Modern admissions marketing communication wizardry, global-reach recruiting campaigns, and sophisticated cost leveraging schemes continue to salve fears that change needs to come soon.  Recruiting and financial aid packing tactics at many colleges seem to be masking an “it’s later than we think” reality, making practitioners in those fields increasingly concerned.

I hosted or was part of three standing-room-only sessions at NACAC and at the New York State financial aid association meeting the following week.  In every setting I sensed an odd mixture of pride-of-accomplishment, guilt, and concern about the future.  The pride comes from making an increasingly difficult (juggling mutually-exclusive imperatives) job look too easy.  The guilt and concern come from making a tough job look too easy, thus blunting effectiveness of delivering messages many on campus don’t want to hear.

Reporting from The College Board Forum, The Chronicle’s Eric Hoover cites Pomona’s Seth Allen’s concern:  “It’s a prevalent notion in academe that recruiting more students from faraway shores can fix a college’s revenue problems. Foreign students, Mr. Allen said, are the latest incarnation of the ‘next great thing’ that promises to solve enrollment challenges. He warned his audience, however, that such thinking could distract college officials from frank discussions about their rising costs.

“’When are we actually going to have this conversation?’ Mr. Allen asked. ‘Because I don’t think the next great thing is around the corner for us.’”

Seth’s is one of a growing number of voices from the admissions and financial aid world whose embedded “market readings” urge intelligent action, sooner rather than later, as they see their tactics’n’tricks diminishing.

Across the country from Pomona, Pennsylvania’s Albright College is doing away with one such tactic, the practice of financial aid gapping.

Kevin Kiley of Inside Highered shined a bright light on the all-too-often overlooked flip side of college cost, financial aid gapping in a story this summer and recently followed-up with a report on Albright College’s eyes-wide-open, pragmatic approach to weaning itself away from gapping.  Albright’s Greg Eichhorn has succeeded in helping his college take a longer view: by “managing down” the gap, Eichhorn figures, Albright will be able to grow headcount (through improved admissions yield and subsequent retention) and increase the lifetime value of a customer, with financial and student satisfaction benefits that will more than offset the anticipated increase in discount rate (arguably one of the most dangerously misused metrics in higher education).

Professionals in the enrollment field – admissions and financial aid staff – are in an increasingly difficult position.  Trained to serve both their college and their families, many are finding what was once a normal complimentary practice is becoming untenable.  As committed, intelligent highered stakeholders, one hopes campus leaders recognize their credibility and seek their insights, soon.