Hardly a day goes by without a college announcing jobs, programs, or spending cuts. You would think with all the brainpower at our colleges and universities they would be able to come up with better solutions than lopping off people, sections and services to students. But they don’t seem to. Why not?
For organizations preparing students and society for the future, we seem to still be stuck in the past, at least when it comes to thinking about enrollment. The churn and burn of continually bringing new students through the front door, and then just watching them go out the back door, is killing college enrollments and individual and institutional futures. As students drop out, budgets, employment, positions, benefits, class sections, services and the ability to meet the educational mission get cut. Tuition and fees go up.
The average college, university, or career college loses between 30 to 48 percent of its enrollment each year. That means schools also lose the tuition, fees and state/federal support that walk out the door with lost students: 30 to 48 percent of it. Some colleges and universities have retention rates as low as 20 percent. Eighty percent of their student body leaves the school and takes almost all the budget with them. These are publicly-assisted schools for the most part because if they did not get assistance they would be out of business. They are the AIGs of higher education and their stimulus packages are not changing anything for them or their students. They seem to accept failure which is something they, their students and our society cannot afford.
They, and we, do not have to accept failure. There is something we can do about it, strengthen our students’ success, faculty morale, and stabilize if not increase budgets.
Figuring Your Own Revenue Lose
The exact amount that your school is losing can be easily calculated using Customer Service Factor 1, which calculates dollars lost due to attrition. The following is an excerpt from The Power of Retention: More Customer Service in Higher Education (www.adminbookshelf.com).
Here it is: CSF1 = [(P X A= SL) X T]
In the formula, P represents the total school population; not just the starting fall freshman number. Most schools use the fall incoming freshmen number and that is an error. The assumption is that attrition occurs most in the first six weeks of the freshman year. That may have some validity for the freshman year but the reality is that students are leaving colleges and universities in any one of the average six-plus years of a four-year degree and in the four-plus average years of a two-year degree. Students leave a school throughout their experience at the college. In fact, some schools are beginning to realize this and worry about the sophomore bubble. But they really need to worry about the super soph sluff, the rising junior jilt, the junior jump, super junior split, the fourth year flee and so on. Every year, every semester, in fact every day is a chance for a student to drop out. Colleges need to be concerned with every student every day of their attendance, for it could be his or her last. So we look at the total population.
Annualized tuition is the number a school should use to figure its real attrition. Not the retention between the first and second semester and the freshman and sophomore years, which are very popular ones. That leaves out all the students who already dropped out before the end of the second term or semester. That number fudges failure. For instance, if a college began a year with 100 new freshman and 99 left in week one but the remaining student stayed the whole year and returned for a sophomore year, the freshman to sophomore percentage would be 100 percent.
In CSF1, A equals attrition. Again not just from freshman but an annualized attrition rate. And this rate is to include ALL students who leave for any reason. It does not matter if the student says he or she will be back. They are not in the population bringing in revenue until they actually do return. If they pay a place holding fee, that does not count them as a student until they are actually back in classes.
