Balancing Access, Aid, and the Bottom Line
Pressures to competitively package student aid, the push to improve quality of students and academic programming, and efforts to increase access and affordability have business officers assessing the impacts of these activities on the institution's bottom line.
By Karla Hignite
However, the road map also relied upon historical levels of state support for development and maintenance of campus infrastructure and for staff salaries, says Ludlow. In December 2000 the state proposed to not only not increase its support to the university but to implement significant funding cuts. "What we didn't know at the time was that the cuts would continue for successive years," says Ludlow. During the past four years South Carolina has reduced Clemson's appropriation from $110 million to $82 million.
That has had two major impacts for Clemson. First, because the university's board did not want to back away from pursuing the quality initiatives, Clemson has had to implement much higher than expected tuition increases—rising from a modest $1,795 per semester in 2000 to $3,920 per semester for 2004. This cumulative 118 percent increase has repositioned Clemson as one of the pricier public institutions in the state.
The second and longer-term impact: a significant increase in Clemson's deferred maintenance. "In 2001 we didn't perceive that state cuts would go on indefinitely, and so we resolved to defer nonessential campus infrastructure improvements for the short term," says Ludlow. "Now we recognize that prior levels of state support aren't coming back anytime soon, if at all."
And that reality has required ongoing tweaking of the road map. "A recurring theme is the question of how long we can put everything into academic quality," says Ludlow. "Most business officers can live with a cracked sidewalk for quite awhile, but if, for example, the power continually goes out, that has a huge impact on what kind of faculty and students you can attract. Becoming a top-20 institution requires a sustainable paradigm with the right balance of academic and nonacademic investments so that you can remain at that top level of achievement once you get there."
Perhaps the silver lining for Clemson is that despite hefty tuition increases, applications are up, as is the quality of students applying. Enrollments could rise as well, but to retain the Clemson experience and continue pursuing its quality initiatives, conversations with faculty, administrators, and alumni conclude that it isn't in the best interest of the institution to grow beyond its current 17,000 enrollments to try to meet budget constraints, or to significantly alter its target mix of 70 percent in-state and 30 percent out-of-state students.
Of greater concern to university administrators is student affordability. "How do we balance our drive to become a top-20 institution, yet maintain the ability for students to attend? As we've talked with students, parents, and alumni, what we hear is that they are willing to pay for quality. For us, it seems our market is driven less by cost than by value," says Ludlow. "And yet, ultimately you can't be successful for the long term without considering issues of pricing and how it affects student access."
In 2001 South Carolina implemented a lottery and dedicated a portion of the proceeds for post-secondary scholarships. However, the $5,000 Life Scholarship is based on a student graduating from high school with a B average and scoring 1,100 on the SATs. Retaining the scholarship requires maintaining a B average, explains Ludlow. That's prompted Clemson to make significant investments in advising, counseling, and academic support programs to help students retain their scholarships. To ensure that higher-need students aren't left out, Clemson recently earmarked $750,000 to fund $1,000 community service grants for need-based students.
Some aspect of Clemson's story likely resonates for many institutions of higher education—whether public or independent, four-year or community college—faced with no choice in recent years but to ratchet up student tuition and fees at the same time that federal financial aid has remained stagnant. Some states are picking up some of the slack in student aid, but increasingly institutions bear the brunt of boosting in-house assistance to help students bridge the affordability gap. At the same time, many colleges and universities are refocusing recruitment efforts to shape incoming student populations or to adjust enrollment targets in response to changing demographics. As a result, initiatives to improve enrollment management outcomes are gaining greater attention on more campuses (see sidebar, "A Growing Role for Enrollment Management"). All these events cause ripple effects for business and finance officers when handling short- and long-term campus infrastructure and operational priorities in concert with efforts to enhance academic quality and improve student success.
What follows are snapshots of how a handful of institutions are responding to the business of tuition and student financial aid.
The St. Lawrence Matrix
Since all St. Lawrence University students reside on the New York campus, the university tracks comprehensive fee increases (tuition, fees, and room and board) rather than tuition alone. For the academic years of 2001-02 through 2004-05, comprehensive fee increases rose 3.7 percent, 5 percent, 5 percent, and 6.4 percent, respectively.
According to Kathryn Mullaney, St. Lawrence's vice president of finance and treasurer, the university sets its rates based on review of the 10 admissions overlap schools that it tracks as well as a larger standard comparison group of 25 other four-year independent rural liberal arts undergraduate schools with similar enrollments, operating budgets, and endowments. "We try to be in the middle for tuition and fees and room and board, both in terms of absolute dollars and rate increase." With a shift during the past decade to price itself according to market position, St. Lawrence has enhanced its value perception within the overall market, says Mullaney.
At the same time, because St. Lawrence prices itself based on what the market will bear rather than on inflation or true cost pressures, the institution is currently running a $5 million deficit from recent capital investments and renovations that include a new bookstore, athletic facilities, a library renovation, and the addition of 17 new faculty members. "We knew we would incur a deficit. The good news is that we're already seeing a return in terms of the number of higher quality students who are enrolling," says Mullaney.
As do a number of colleges and universities, St. Lawrence uses a matrix to identify prospective students on scales of ability and need. "Our overall strategy is to maintain the size of our incoming classes but improve the quality of students and improve net tuition revenues through better retention. If we get students here who are a good match for St. Lawrence and they do well, then they will stay," says Mullaney. Since the new strategy was enacted in 1996 with the arrival of a new president, total enrollment has grown from 1,850 to 2,100. "Retention of freshmen continuing to their sophomore year was 90 percent for the class of 2007, compared to 86 percent for the class of 2001," says Mullaney. As part of its strategy to change its applicant pool the university is rebuilding relationships that had lapsed with private feeder schools and is pursuing more out-of-state students. Five years ago 54 percent of St. Lawrence students hailed from New York, compared to 46 percent today.
The 1996-97 academic year also marked the first time St. Lawrence awarded merit aid. Of seven academic quality levels defined by the university, all students within the top three levels currently receive tiered scholarships of $15,000, $12,500, or $7,500. Some of those same students receive additional aid based on need, says Mullaney. Beginning in 1997, St. Lawrence launched its GATE Loan program as an enrollment enhancer to package with financial aid to reduce the immediate cost of education to prospective students, says Mullaney.
Mullaney currently sits on the board of SAGE (Savings and Growth for Education) Scholars, an innovative savings program for families interested in private college education for their children. How the program works is that families may choose from a variety of investment vehicles to set aside funds for college tuition. In return, families are guaranteed at least a 5 percent discount on tuition when a child attends a participating institution. St. Lawrence was among the first of now more than 160 institutions that currently participate in the Sage Tuition Rewards program. The incentive for institutions is access to a directory of families who not only are interested in private higher education, but who also typically have higher-than-average assets set aside to pay for that education, says Mullaney.
|The Downside of Up Enrollments at Community Colleges|
North Shore Community College currently enrolls about 10,000 students at its four Massachusetts campuses. A new 100,000-square-foot academic building is drawing more traditional students as part of the college's expanding population. Like public community colleges in many states, North Shore's state funding has been reduced during the past three years, even as enrollments continue to rise—up 8 percent at North Shore in fall 2003, with no immediate end to the trend in sight. In response, with the exception of the current academic year, North Shore has had to increase fees. But, according to Vice President for Administration and Finance Janice Forsstrom, North Shore has done so as one part of a multipronged fiscal strategy of cost savings and restructuring of services, including the realignment of its student enrollment and financial services centers. Concerted efforts to restructure for efficiency—including maximizing Web self-services—have minimized the level of fee increases needed while keeping the quality of academic programs intact.
For the past three years, fall enrollments at the main campus of Northampton County Community College in Pennsylvania have grown about 10 percent over each prior year. Enrollments at the college's Monroe County branch campus have increased as much as 20 percent annually. Based on projected high school graduation rates, Northampton expects the trend to last at least another two years on both campuses, says Lisa Marie McCauley, Northampton's former vice president for finance and operations and now vice president for business affairs and treasurer for Kings College. To accommodate this growth, construction is underway on Northampton's main campus for a 43,000-square-foot gym and student activities center. When the new gym opens, the old gym will be converted into 11 new classrooms and faculty offices. The college's Monroe campus has nearly quadrupled in space from 10,000 to 37,000 square feet since 1999.
As McCauley explains, Northampton is funded in three primary ways: appropriations from the state, funding from local sponsors, and student tuition and fees. Local sponsors include eight school districts within Northampton County that provide a combined $4.7 million based on the number of students sent from each district. For the past three years the state has reimbursed the college $1,500 per FTE, but that could decrease to approximately $1,300 before this school year ends, says McCauley. "While Northampton maintains its commitment to open enrollment, the result is often a negative impact to the financial bottom line," says McCauley. "For instance, if we give the state an estimate of 8,000 FTEs, we may not get reimbursed for those additional 500 who come through the door during the course of the year." What helps Northampton is an increase in its out-of-county and out-of-state students. "One advantage we have over other community colleges in Pennsylvania is dorms and apartments to accommodate students for Northampton's statewide programs, which include funeral services, auto technology, and a culinary institute," says McCauley.
State funding for Maryland's Howard County Community College is also based on FTEs—currently about 6,000 students. But funding occurs two years in arrears, says Lynn Coleman, vice president of administration and finance. And because Howard enrollments are also on the rise—up 5 percent this year and 8 percent the previous year—funding doesn't typically match current realities. After not implementing increases for three years, during the past three years the college has raised tuition by 6 percent, 4 percent, and 11 percent, respectively, because of reductions in state funding, says Coleman. While the county provides about 31 percent of tuition funding compared to 16 percent from the state, at 38 percent students still pay the bulk.
Like their four-year public counterparts, community colleges are seeking ways to decrease the burden of what students pay, even as institutions must raise tuition rates and fees. To provide a safety net for those most impacted by increases, North Shore created a student retention fund of $200,000 this year and last year to assist students unable to pay for classes or to help them lower their loan debt from one semester to another, says Forsstrom.
"Even at $91 per credit hour, Northampton is pricing tuition out of the pocketbooks of some," says McCauley. The college raised $6.2 million in grants this past year and has launched a comprehensive campaign to raise $13.5 million in private funds for land and buildings for expansion, a technology fund, a pilot project aimed at high-risk/high-need students, and for student scholarships. In certain critical-need areas such as nursing the college has received so much funding that every student who needs a scholarship receives one, and the college has a waiting list for those who want to enter the program. Scholarships are not so plentiful in other programs, says McCauley. "Part of our fundraising process entails reviewing scholarship guidelines, and where they are too restrictive, to ask donors to change the wording so that more students have access to funds."
For the past 10 years, Howard County Community College has allocated funding for scholarships within its operating budget and for the past five years has increased overall foundation scholarships by 15 percent. Two institutional scholarships in particular focus on students at opposite ends of the academic spectrum. Howard's Rouse Scholars Program awards honors students whose parents can't afford to send their son or daughter to a four-year institution. The college's Silas Craft Collegians scholarship assists students who otherwise didn't show their full potential in high school, says Coleman. All Silas Craft recipients are assigned mentors to help students remain on track to complete a program of study within four years.
Northern Michigan's Growth Goals
Northern Michigan University receives about 50 percent of its general operating funds from the state, but with constitutional autonomy, NMU's tuition and fees are set by its board of trustees.
The university got its start as a teachers college serving primarily Michigan's rural Upper Peninsula, a population center of roughly 300,000 and with the closest city of 50,000 more than 160 miles from NMU. In the early 1990s, NMU enrollments were close to 9,000. Then in 1995 a local air base closed, and with it, the loss of 3,000 military and 1,000 civilian jobs. "Within a year, our enrollments fell by 1,300, and future enrollments were jeopardized as a result of many young families who left the area," says Mike Roy, NMU vice president of finance and administration. On the heels of that blow, another punch taking aim was a downward trend in high school populations. "From calendar year 1999 through 2011, we projected that the entire region would face a decline in high school graduates of approximately 26 percent," says Roy.
Pressure from the state to grow enrollment is in part what prompted NMU to chart a course for expanding recruitment outside its target base, placing greater emphasis on students from lower Michigan and from neighboring states, primarily Illinois and Wisconsin, says Roy. The university also focused recruitment efforts on students with higher academic abilities by establishing new merit-based scholarships; implemented a new technology program to provide all full-time students with a notebook computer, software, support, insurance, and Internet access as part of tuition and fees; and strategically placed recruiters in new target regions, says Roy.
The combination of these factors has been instrumental in raising NMU enrollments from a low of 7,593 in 1995 to its current record high of 9,400 students, which includes about 800 graduate students. Whereas Michigan's Upper Peninsula used to produce 70 percent of freshmen, today it accounts for only about 35 percent of freshmen enrollments, says Roy. For the current year about 17 percent of NMU enrollments are from out of state.
NMU isn't done yet. The university has set an enrollment goal of 10,400 students by fall 2007. Why the continued aggressive growth? In part because NMU's physical plant can handle it without significant expansion, says Roy. "We estimate our total capacity to be around 12,000 undergraduate and graduate students based on our academic facilities." However, NMU is already at capacity with its on-campus housing. To add another 300 beds, NMU plans to construct new apartments and convert current faculty office space back to residence halls. Some additional shifting of faculty offices and student services will be accomplished with the renovation of a former field house, says Roy.
Despite tuition increases averaging about 9 percent in recent years, NMU remains among the best buys in the state, says Roy. But within a more competitive climate, NMU understands the importance of offering aid. "Student aid is both key to our accomplishing our enrollment targets and has a direct impact on our budget," says Roy. Financial aid now accounts for 16.5 percent of the university's tuition and fee revenue. Five years ago NMU organized a scholarship committee that includes representatives from finance, planning, institutional research, student services and enrollment, admissions, financial aid, and marketing to review the university's scholarship competitiveness and boost support to a growing number of high-need students. As a result, NMU has implemented formula-based aid for both its merit and need-based scholarships. Merit aid levels are based on ACT scores and high school GPA. A national academic scholarship also helps narrow the out-of-state differential, says Roy. "As for need-based aid, we determine an automated university award based on expected family contribution. The higher the need, the greater the scholarship." Amounts budgeted by NMU for both merit and need-based scholarships increase as enrollment increases and decrease as enrollment decreases.
Because students with the highest need now enroll at the same rate as students demonstrating no need, to continue its commitment to enrolling high-need students NMU has joined the growing constituency of public institutions that are pursuing fundraising initiatives. This past year the university completed its first-ever capital campaign. NMU exceeded its total goal of $30 million by $6 million. Pledged gifts toward the endowed scholarship portion of its campaign likewise exceeded its $5.5 million goal. Prior to the campaign, NMU scholarship annual disbursements equaled $104,000 compared to $411,000 in 2003 resulting from NMU's fundraising success.
Occidental College is a highly selective, liberal arts four-year college with a mission-based commitment to diversity and access. It has an enrollment of 1,800 students, an endowment of $270 million, and a public policy outreach effort second to none for an independent institution.
For this past academic year, 24.5 percent of Occidental students were Pell Grant recipients—one of the highest percentages in the nation among comparable colleges, according to Jim Tranquada, Occidental's director of communications. Occidental has one of the oldest Upward Bound Project campus programs in the United States focused on providing access to low-income, first-generation students. During the past two years, the number of first-in-family Occidental students accounted for 15 percent of total first-year enrollments. "Those statistics aren't accidents but are the result of intentional efforts to increase access and diversity," says Tranquada.
Faculty, staff, and students also spend significant time as mentors and in other outreach capacities in Los Angeles schools. "We believe that diversity isn't something separate but is fundamental for academic excellence," says Tranquada. During the past seven years, the number of Occidental applicants has increased 160 percent, with more than 10 applications received for every opening. SAT scores have risen by 100 points on average.
"Part of our commitment to access has grown out of a significant budget battle involving all sectors of higher education within the state that would have reduced the Cal Grant by 44 percent this past year," explains David Roth, Occidental's deputy to the president. "Using our connections with local associations and state agencies, and providing counsel and testimony, we were able to organize a significant response to the administration and legislature, providing specific recommendations for a compromise that wouldn't disadvantage students to the extent feared." In the end the Cal Grant was cut by 14 percent for state residents who attend independent institutions—still a blow, but much less of a hit to the overall buying power of the grant. This past year the college was also approached by the Lumina Foundation for Education to take a leadership role in financial aid outreach throughout the state, spearheading efforts to boost college attendance rates among disadvantaged and first-generation students by increasing awareness of financial aid programs and providing free counseling opportunities and assistance with completing aid forms.
In addition to high-level statewide initiatives, Occidental is entrenched at the grassroots. "We call each Occidental applicant—not only those who enroll—to make sure they understand how to apply for financial aid and to ensure that they apply by the deadline," says Maureen McRae Levy, director of financial aid. "We visit high schools to help parents and students fill out applications. We provide sessions in Spanish and Vietnamese and offer presentations translated into other languages, since many family members we deal with have never learned to speak English," says Levy. "We know that when you can get students to apply for a Cal Grant on time, if they meet the requirements, then they will get one. And if we can get to those students, it allows us to enroll more low-income students, because they enter the academic year with funds in hand."
As Roth notes, much of the outreach work in which Occidental engages isn't solely for the benefit of Occidental. "We are committed to increasing the pool of students moving on to higher education—wherever they decide to go," says Roth. According to Harold Hewitt, Occidental's vice president for administration and finance, what often gets lost in the debate regarding Cal Grant recipients in particular is that the more low-income students that institutions such as Occidental are able to enroll, the greater the benefit to the public sector as well. "By providing Cal Grants to independent sector students, the state provides greater access to higher education than if it tries to produce access targets within the public sector alone," says Hewitt.
Occidental's commitment to diversity and access isn't evident by advocacy efforts alone. Among the ongoing priorities for Occidental's development office is raising money for student scholarships. Currently the college offers approximately 325 annual and endowed scholarships and has increased the number of scholarships by about eight per year during the past decade, says Tranquada. Levy notes that for the current academic year, Occidental has provided about $20 million in grants and scholarships to students. The college is equally committed to reducing the debt burden of students. According to Levy, Occidental's average loan per graduating student is about $7,000 less than the national average for independent institutions. For its part, Occidental has two loan programs on campus: one funded in part by a Weingart Foundation program that offers California residents a no-interest deferred loan, and a second that offers students a 5 percent deferred loan that parallels the federal Perkins loan.
|A Growing Role for Enrollment Management|
It may vary in shape depending on the institution, but the business of enrollment management is carving a more prominent and permanent place on campuses of higher education.
Northern Michigan University has a mixed faculty and staff enrollment management network committee that is responsible for setting enrollment targets, identifying recruitment strategies, and reviewing recruitment regions.
The enrollment management team at Maryland's Howard Community College consists of staff from academic affairs, public relations, admissions, financial aid, student services, research, finance, and IT. The team reviews marketing materials sent to prospective students, monitors tuition funding and program health, and discusses where and how to increase enrollment. According to Lynn Coleman, vice president of administration and finance, a primary thrust of the team centers on developing retention strategies to get students the support they need.
"Whereas students age 22 and younger represented only 34.6 percent of our population in 1998, today that same age category has swelled to 47.6 percent," says Coleman. She cites two reasons: 1) Maryland's public four-year institutions have seen costs rise at a quicker rate and have also become more restrictive in their admissions standards, and 2) the county is experiencing rapid growth, and since the college has traditionally enrolled 23 percent of the county's high school graduates, a growing population contributes to enrollment growth.
In response to a younger demographic, Howard is putting more resources toward fixing its playing fields. "As part of our enrollment management strategy we recognize the need to increase opportunities for athletics for a younger population of students who want more day activities," says Coleman. That same younger group spells the need for special programs with a traditional freshman focus—namely, increased tutoring to equip students with the proper study skills to succeed in college. For its overall student population, Howard is also working more closely with four-year institutions to improve acceptance of students into their programs and is focusing on attracting a diverse faculty mix to mirror its student population, says Coleman.
While New Jersey's Rider University had success during the 1990s building its undergraduate enrollment, a continued competitive market convinced the institution's leaders of the need for a collaborative approach to enrollment management, says Julie Karns, Rider's vice president for finance and administration. She believes enrollment management is becoming an increasingly important element of good financial planning by institutions of higher education. "We wanted a high-level point person with a strong data orientation responsible for strategies and results who could continue to strengthen Rider's competitive position."
Enter Jamie O'Hara, Rider's new vice president of enrollment management. In seeking to maximize the caliber of students and net tuition revenues, enrollment management in its various forms is becoming a more sophisticated endeavor, says O'Hara. "Ten years ago, enrollment management was probably more of an art than a science. Today, institutions are crunching data and tracking and analyzing what competitors are doing and by what criteria they select students," says O'Hara.
For its assessment, Rider uses a wide range of tools that include a tuition discount survey, state data, and national trend data. The university also monitors the merit scholarship programs of competitors and tracks a dozen other campuses—including and beyond its cross-application campuses—to ensure its own market competitiveness in terms of price and financial aid packaging. It pays attention to responses to student questionnaires—from those who enroll and from those who go elsewhere, says O'Hara. "We also closely monitor external factors that could have an immediate impact on costs and enrollments at Rider." If, for example, an institution located 20 miles from Rider were to receive funding to provide endowed scholarships across the board, that could have a significant impact on Rider for that current year—long before it shows up in a benchmarking survey, says O'Hara.
He believes the biggest part of successful enrollment management strategy is understanding your mission relative to other institutions, then setting realistic goals critical to achieving that mission. "If your mission is to serve 100 percent need, that takes your institution down a different course than one that doesn't have the resources to meet 100 percent need," says O'Hara. "Or, if you decide that it's a priority to increase enrollments to your honors college, you'll package aid to those students differently than you may package other students." The same focus is increasingly being implemented to increase enrollments in particular schools or departments within an institution—and in some cases, in particular majors, says O'Hara.
"Most institutions can no longer try to be all things to all prospective students. The reality is that from a business perspective, institutions increasingly must focus decisions about enrollment based on core mission and niche," says O'Hara. For instance, if an institution decides to grow its communication major by 20 students, what kind of resources will those students need? What additional faculty or lab space is required? Will students have the ability to obtain internships within the local community? "Whatever enrollment targets are set by an institution, fairness to students and the ability to meet their expectations must become parts of the equation," says O'Hara.
Calvin's Loyal Base
Nearly 97 percent of the 4,300 students attending Calvin College—an independent four-year Christian liberal arts college—are traditional 18- to 22-year-old students. "For reasons we still can't fathom, our number of applications for this fall were down a few hundred, resulting in a freshman class that is about 100 students shy of the norm," says Henry DeVries, Calvin's vice president for administration, finance, and information services. While internal reviews and outside consultants could not uncover any single factor or trend, the college did decide that after seven years of fixed merit scholarship levels it was probably time to increase its awards. New tiered levels become effective for students in the fall 2005 semester. "The value of what appears to be an isolated occurrence is that we're now all up to speed on conversations about what we need to do to enhance our competitive positioning," says DeVries.
The college has raised tuition rates by a steady 6 percent on average for the past three academic years, based on staying about 3 percent above the consumer price index, says DeVries. Over the years, one area of continued success for Calvin in providing aid to students has been its endowed scholarships. "We've been fortunate that our supporting constituency is extremely generous," says DeVries. He argues that having the college's development officer party to conversations about the institution's budget and enrollment goals is important for focusing fundraising efforts. While named endowed scholarships have been phenomenally successful, concerted efforts are underway to increase gifts for students based on need, says DeVries.
Calvin's loyal alumni connection translates into not only strong donor support, but also a well-above-average legacy factor—an astounding 75 percent yield rate on children of alums who apply, which in turn feeds Calvin's support base, DeVries notes. With a 70 to 75 percent likelihood that a child of a Calvin alum will end up attending, it makes sense that the college offers a prepaid tuition plan. "Parents or grandparents can purchase tuition units worth 1 percent of a current year's tuition, redeemable at any time in the future for 1 percent of tuition at that future date," explains DeVries. Since the program's inception 25 years ago, the college has redeemed more than 2,500 certificates worth more than 725 years of tuition totaling nearly $6.7 million. Currently Calvin holds certificates equaling more than 165 years of prepaid tuition (165,000 units) for which the college will be liable at some point in the future.
Iowa State's Demographic Realities
Approximately 23,000 of Iowa State University's 27,000 enrollees are undergraduate students. In the late 1990s the institution started noticing a sharp drop in non-resident enrollments. One cause: Other competing schools had become more aggressive in their financial aid packaging, says Margaret (Johnny) Pickett, Iowa State's associate vice president for business and finance and controller and university secretary. Also of concern: a rapidly declining base for Iowa State's primary target audience—the traditional undergrad. High school populations were dwindling not only within Iowa, but also in bordering states.
It hasn't helped that cumulative state-driven tuition increases of 40 percent during the past four-year period didn't allow the university time to adjust its financial aid policies fast enough to provide competitive aid, says Pickett. The result has been a dramatic impact on enrollments, currently down about 1,000—largely as the result of smaller incoming classes, students graduating sooner, and students not returning because of higher costs, says Pickett.
For now, Iowa State's tuition policy remains in flux. Until this year, tuition levels were set solely at the Board of Regents level. A new policy for a four-year plan adopted by the regents effective for fall 2005 would set a base tuition rate increase of approximately 4 percent to tie tuition to the Higher Education Price Index, explains Pickett. Iowa state institutions could then request supplemental tuition increases above that amount. During the past two years Iowa State has departed from its own historic policy of raising resident and non-resident tuition by the same percentages by opting instead for differential increases—implementing lower percentage increases for non-residents to keep the total dollar increases for non-residents from swelling out of control, says Pickett. For 2003-04, tuition increases for residents versus non-residents was 17.6 percent versus 10.5 percent, and for the current year, 8.3 percent versus 5.3 percent.
Whereas Iowa State previously set aside 11 percent of its new tuition revenue for need-based financial aid, Iowa's Board of Regents recently raised that target to 15 percent. Last year Iowa State set aside a total of 20 percent of tuition revenue for both need-based and merit student aid.
The need for better aid packaging holds true for Iowa State's graduate students as well as its undergraduate population. "Currently we only pay about half of the tuition for most of our PhD students, and that isn't viewed as very competitive. We're going through the budget process now to figure out how to get more support for full-tuition PhD students," says Pickett. "It's been quite involved in both calculating budget impacts and working on bureaucratic mechanisms to provide assistantships."
Pickett's analysis of the revenue implications of decreasing enrollments factors in not only the impact to general education but to the whole institution. "The business side of the institution has a new role in being more involved in how enrollment and tuition trends impact non-supported enterprises such as food service and fee-based operations such as student health and recreation services," says Pickett.
Pickett isn't the only one on campus heeding such concerns. Iowa State now has several groups charged with different aspects of enrollment management. A recruitment council that deals directly with recruitment issues is focused on the marketing end, says Pickett. At a higher level, the president, deans, and other senior staff monitor and discuss the demographic realities of the university. "Given our location and the declining base of the traditional age college student in our state and in surrounding states, we continue to debate where we should focus future recruitment strategies," she says.
Iowa State's president has likewise developed an enrollment leadership council that blends admissions and registrar staff and faculty. This group is responsible for motivating the academic side of the institution to be partners in enrollment management, says Roberta Johnson, Iowa State's financial aid director. "In one example, the community college transfer issue can't be improved without faculty support to resolve how students are acclimated into majors with their two-year degrees. And more than before we are looking to improve recruitment efforts and articulation agreements with community colleges to make it more user-friendly for transfer students to enter Iowa State programs," says Johnson. Another example concerns the advising of undecided students. "Students shouldn't feel homeless simply because they are undecided," says Johnson. "How they are counseled and treated can have a big impact on their academic progress and ultimate degree completion."
Business Officer Involvement
|Get Up To Speed on Student Financial Services|
Enrollment management issues—specifically as they relate to student financial services and the business office—are among topics to be explored at NACUBO's third annual Student Financial Services Conference, March 6–8 in Orlando, Florida. The conference focuses on financing post-secondary education—both from the institutional and student perspectives—and the integration of internal operations to provide top-notch customer service. Other topics include loan management and collections techniques, updates on federal policy, the latest in systems and technology, planning for emergencies, and tax compliance.
Since its inception, this conference has established itself as the most comprehensive event covering the business of student financial services. The program reached capacity registration both years.
For more information or to register, visit www.nacubo.org or call 800.462.4916.
Business officers have for some time been concerned about cost pressures ranging from compensating top faculty to ever-spiraling workers compensation premiums, fluctuating utilities costs, and escalating health care and employee benefits expenditures. More recently, however, chief business and chief finance officers are increasingly involved in campus conversations about recruitment, enrollment, tuition, and financial aid as these relate to and become more intertwined with traditional business officer concerns.
"As CFO I may not have direct responsibility in the scholarships area, but I do need to be informed from the standpoint of overall mission and how we are going to maintain or increase programming," says Lisa Marie McCauley, former vice president for finance and operations for Northampton County Community College. An area of significant growth for Northampton is its allied health programs—dental hygiene, nursing, radiography, sonography, and surgical technology. "Those tend to be Northampton's highest-cost programs, and to build such a program to adequately train students entails significant expense. A single piece of equipment might cost $100,000," says McCauley.
On the flip side, business officers must help others understand financial issues in connection to quality and diversity goals, says Mullaney. Several years ago St. Lawrence's academic affairs committee decided to eliminate the university's physical education major because it believed doing so would improve the academic profile of the student body, says Mullaney. "That had a significant impact on enrollment, because our only graduate level program is in teaching and we had a good number of undergrads wanting to become coaches who then continued on for their masters. All of a sudden we didn't have a major for them," says Mullaney. Likewise, making a decision based solely on finances may not be best for diversity or quality, says Mullaney. "It's a constant juggling act with at least three No. 1 priorities: quality, diversity, and net revenues. It may be easy enough to achieve one of those, but it's difficult to achieve balance while you're working to raise all three. What we all need to do more of is to look at the 360-degree impact of our decisions in each of these arenas."
Author Bio Karla Hignite is a writer and editor based in Tacoma, Washington.
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- NACUBO Responds to GASB's Lease Proposal
- 2016 CAO and CBO Collaborations
August 1-2, 2016
- 2016 Planning and Budgeting Forum
September 19-20, 2016
- 2016 Managerial Analysis and Decision Support
November 17-18, 2016
- WEBCAST: The CBO's Role in Diversity and Inclusion on Campus
Thursday, June 30, 2016 1:00 PM ET
- ON-DEMAND: The Clery Act: Strategic Planning to Mitigate Institutional Risk
- ON-DEMAND: Title IX: Key Issues Surrounding Institutional Compliance
- ON-DEMAND: NACUBO Live! Higher Education Accounting Forum
- ON-DEMAND: Responsibility Center Management: Two Different Perspectives