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Business Officer Magazine
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Creating a Sustainable Model for Study Abroad Programs

From “Business Briefs” department in February 2010 issue of Business Officer

By Thomas J. Botzman and P. Joan Poor

The importance of providing students with a clear understanding of the 21st century's complex global relationships has gained momentum in recent years. At St. Mary's College of Maryland (SMCM), our internationalization effort over the past decade has been incorporated into our strategic planning process and has resulted in curricular reform.

The college's new core curriculum, initiated in fall 2008, includes the component “Experiencing the Liberal Arts in the World.” It calls for all students to gain global perspective through an international education experience, some form of service learning such as independent study with a community orientation, or an internship with an organization that has international ties or focus. Early indications show that about 80 percent of students expect to fulfill this requirement through study abroad.

While the enthusiasm for study abroad is a positive for our campus, an imbalance in participation between spring and fall semesters has serious financial implications. We've established some incentives to try to equalize the number of students who participate in each semester's programs. Results from the past several years have shown that the incentives are working, meaning financial gain for the college and the ability to hire additional faculty to provide more course offerings in the spring semester.

An Evolving Model Needed Revision

The international education program has evolved into what we call the SMCM Signature Programs model, emphasizing a select number of semester-long study abroad programs that have grown organically from past and present faculty relationships and partnerships. The key qualifications of all Signature Programs are that they must (1) meet our college's high academic standards and have transferable academic credit, (2) cost students no more than other programs in which they might enroll on the Maryland campus, and (3) overall or in aggregate, have minimal or no net direct cost to the college. Such a sustainable financial model is imperative given the public liberal arts mission of SMCM, which is to provide students with an affordable, high-quality undergraduate education in a residential setting.

The financial implications of undergraduate study abroad programs are, in part, why many institutions are cautious about encouraging the majority of their students to participate. Participation is more likely for students at private liberal arts colleges. For a public liberal arts institution such as SMCM to support and carry out international studies, astute financial planning is imperative.

In that regard, historical student data for SMCM semester-abroad programs revealed a significant concern: Our students typically prefer to participate in these programs during spring semesters, as is the case at many liberal arts colleges. For a residential campus, this semester imbalance can result in a significant reduction in spring semester revenues from tuition and room and board—as additional students would not begin their studies midyear, and the “empty beds” left by study abroad students would quickly erode the financial sustainability of the program.

Finding the Right Balance

We've been running SMCM Signature Programs at five locations: Payap University, Chiang Mai,Thailand; Fudan University, Shanghai; University of The Gambia, Gambia, West Africa; the SMCM Campus Center, Alba, Italy; and the Centre for Medieval and Renaissance Studies, Oxford, England. Students participating in these programs pay directly to SMCM the same semester costs they would if they were attending the Maryland campus, while the coursework is typically taught by instructors in the respective countries. SMCM faculty members serve as program directors.

The key to financially sustaining this model is to equalize the Maryland campus fall and spring enrollment numbers. If we have the same number of students studying off campus each semester, we can accept the number of students necessary to fill all beds, thus maximizing revenue. To accomplish this balance, we offer an incentive to entice more students to study abroad in the fall semester. SMCM budgets $88,000 to help pay the airfare for any students who choose to enroll in the study abroad program in the fall semester rather than in spring.

The fall semester airfare incentive had an immediate impact on our campus when we first offered it in 2007–08. The financial results from the reduced fee (see table) were dramatic. Net revenues contributed an estimated additional $500,000 to SMCM's operating budget.

Here's how the enrollment rebalancing worked for the academic year 2007–08. On average, we were able to admit an additional 76 students, with no additional programmatic expenses, thereby stabilizing the number of students enrolled from the fall to spring semesters. For example, before the airfare incentive—from fall 2006 to spring 2007—the Maryland on-campus enrollment fell by about 128 students, primarily because so many students left for study abroad programs. After the airfare incentive was implemented for academic year 2007–08, the fall-to-spring semester on-campus enrollment fell by only 20 students. The increase in the average annual on-campus student enrollment between these two academic years amounted to the additional 76 students. Spring enrollment now matched evenly with fall enrollment. Not only was this a financial gain (see table for details), it also supported the hiring of additional full-time faculty to help support the Maryland campus academic mission.

Maintaining Equilibrium

Having accomplished preliminary positive results from the fall semester airfare incentive program, we realize the ongoing challenge of simultaneously managing student enrollment both on and off campus. For example, too many students may want to take advantage of the airfare incentive to study abroad in the fall, sending the semester imbalance in the other direction. If that's the case, we can adjust the airfare incentive to some proportion of the total airfare to bring the numbers back in balance.

We're prepared to continually analyze the program and the effect of the incentives such that we manage our enrollment both at home and abroad in a way that gives all students the opportunity to experience the greater world while we achieve maximum enrollment and revenues for the college.

SUBMITTED BY Thomas J. Botzman, vice president, business and finance, and P. Joan Poor, associate professor of economics and assistant to the president, St. Mary's College of Maryland, St. Mary's City