IN DECEMBER, STAMATS AND SCANNELL & KURZ PRESENTED “WISE MOVES IN TOUGH TIMES,” A WEBINAR with more than 800 college and university leader participants. This spring, Scannell & Kurz will present at two national conferences and conduct two more webinars on the topic. The demand for these is new. No one can wholly predict the impact on college enrollments for fall 2009. The credit crunch had very little impact on fall 2008 enrollment, due in large part to its timing. And with the impact primarily felt in the private loan market, government-subsidized loans were readily available for this academic year. Now the “perfect storm” of limited credit, increased unemployment, reduced asset values, and economic uncertainty has Katrina-like potential for upheaval and change. Based in part on the December webinar, the following are recommendations on preparing for the unknown and securing what can be secured.
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?”
Some families will reduce
expenses by having their
children commute rather
than live on campus.
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 clear, 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.
