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Business Officer Magazine
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Insights: Ed MacKay on Enrollment Realities

By Cynthia Teniente-Matson

MATSON: How are demographic shifts and other factors impacting enrollment management initiatives in your state or region?

MACKAY: Approximately 66 percent of the operating revenue for the University System of New Hampshire (USNH) is derived from students, and more than 40 percent of our undergraduate and graduate degree candidates are from out of state. For each of our campuses, more than 90 percent of out-of-state students come from the other five New England states, plus New York and New Jersey. So, we're highly reliant on the northeastern portion of the country for our students and on student revenue to support operations. Based on our best projections, New Hampshire will see a decline of about 18 percent in the number of high school graduates over the next eight years. That's similar to the pattern throughout those other seven states that we rely on, where the average decline is in the low double digits. We must expand our recruitment area and take steps to increase the college attendance rate of current K–12 students.

MATSON: Given those realities, what do you see as the biggest challenge facing your own system and other institutions in areas with declining populations of college-bound students?

The University System of New Hampshire and the California State University System are not only 3,000 miles apart geographically, but they also face starkly different enrollment management landscapes. While USNH projects a dwindling base of in-state and regional students, the CSU is hard-pressed to serve its growing residential population. In this interview, Edward R. MacKay, USNH chancellor and a 2009 recipient of NACUBO's Distinguished Business Officer award, trades observations about enrollment challenges with CSU-Fresno Chief Financial Officer and NACUBO Board Vice Chair, Cynthia Teniente-Matson.

For more of their conversation than this space allows, including descriptions of specific programs and approaches both systems are implementing, go to Business Officer Plus at www.nacubo.org.

MACKAY: One key is to look outside the traditional 18- to 22-year-old population. Nearly half the students enrolled in higher education across the country today are what we once considered nontraditional students. In our region, we're also looking at a different ethnic and socioeconomic profile of high school graduates compared to the past 15 or 20 years. These students may have greater financial aid and student-support needs, so we have to prepare for that.

Another challenge is that families are reassessing the economic value of higher education. We must make the case that higher education is a good investment.

Finally, students today are more technically savvy and comfortable learning online and through other modalities than what has been typical on many of our residential campuses. It's time to embrace and expand these alternate delivery mechanisms, including support for faculty adaptation.

MATSON: With regard to enrollment management planning, do you see a new time horizon for these efforts?

MACKAY: We've always been intentional about thinking 10 years out. Perhaps more evident now than a change in time horizon is a change in focus on the various enrollment components and a sense of greater urgency to make sure we're offering reasonable price points. Because of the competitive market for out-of-state students, in particular, we do everything we can to hold that price down. This year we also tweaked our typical acceptance profile and accepted more students with the assumption that we would have a higher degree of summer melt—students who paid deposits but do not enroll in the fall. Going forward, if we simply try to maintain our market share of high school graduates in our area, we'll end up with substantial losses. In fact, to maintain our absolute number of students, we'll have to increase our local market share by 15 to 20 percent.

MATSON: What's interesting as I hear you talk is that my state provides quite a different story. Of course California has a very large population. The CSU system itself is the largest public institution of higher education in the United States, accounting for nearly 450,000 students. Our biggest enrollment challenge for the next several years is determining how many students we can afford to serve. While we are also very dependent on tuition, we operate within a formula-funded system in which we're reimbursed by the state at a marginal cost of instruction per student. Our enrollments were up in fall 2008, and we were projected to be up for fall 2009.

However, because of our fiscal situation and the state funding model—and because we have one of the lowest tuition rates across the country—we are essentially overenrolled, having exceeded what our state allotment supports. As a result, we've been focused on a systemwide reduction of at least 10,000 students for the 2009–10 academic year. At this late date, we likely won't achieve that, and so we'll refocus for 2010–11. The other unusual factor is that because we know we will be overenrolled, we have cut off admissions for spring 2010.

Because we have far more California students trying to get in than we can accommodate, a big question for us is whether we can really accept out-of-state students at this time. Even for residents, we're at the point where we can admit only first-time freshmen and fully qualified upper-division transfer students. That means that a student who decides to take some courses at a community college would not be able to transfer into the CSU system until he or she had earned and completed 60 credits in general education requirements to enter as a qualified upper-division transfer.

MATSON: So tell me, based on some of the significant population and demographic changes taking shape that are impacting colleges and universities in different ways, what do you think we'll see in terms of multi-institution partnerships or regionalization of programs?

MACKAY: I think we'll see enhanced collaboration to offer programs across state boundaries that enable families to obtain, at more favorable prices, programs to which they would not necessarily have access within their own state. In other words, we will move toward redefining the radius within which a student qualifies for a lower tuition rate. There will be more aggressive pricing and tuition discounting by a number of independent institutions and some publics. And while we haven't seen much in the way of partnerships between publics and privates to deliver academic programs, this will likely become a growing trend, particularly for graduate-level programs. If for no other reason, that's because the cost of internally developing a specialized master's or Ph.D. program is extensive, and that makes collaboration attractive.

MATSON: I agree. Particularly, within the state university system in California is where we find the most opportunity for these partnerships. Within the CSU, we are not authorized to offer an array of independent doctorates. That requires a legislative change. We are, however, authorized to partner with the University of California for doctoral programs. Given the size of our state, we find a high demand for this.

MATSON: Now here's a popular culture question for you: How important do you think some of the new social media will be in future recruitment efforts?

MACKAY: From a tactical sense I think they're extremely important for providing visibility for the institution and enabling prospective students to connect with and learn something about the institution. However, while it's important to use all forms of communication, that's only the beginning of the story. What we need is a better strategy about the message itself—what is distinctive about our institutions and our campuses. And that message is also shifting. Previously we've often highlighted our extracurricular activities such as athletics. I think attention will shift to the internships and the other experiences students can gain that will lead to enhanced employment opportunities.

MATSON: Finally, what do you see as the specific role that chief business officers can and should play in the institution's enrollment management efforts?

MACKAY: One related aspect of enrollment planning these days is the issue of an institution's willingness to take on additional debt or other long-term financial obligations. Many have described higher education's “arms race” for new and larger facilities—often funded through debt—but now some institutions are taking a serious look at inefficient facilities and asking whether they want to maintain them or if it makes more sense to consolidate their square footage, while serving the same number of students.

Going forward, there's clearly going to be more attention paid to debt obligations, cash flow, payouts from endowments, earnings on cash, and other factors that will enable the institution to deliver the programs and services that it needs to accomplish its particular mission. This underscores the value of the business officer perspective in working with the enrollment management team to enhance longer-term projections. The credibility that the chief business officer brings in being able to analyze financial relationships, frame those assessments in terms of potential consequences, and explain these factors to the campus community is absolutely crucial for moving an institution forward.

CYNTHIA TENIENTE-MATSON is vice president of administration and chief financial officer at California State University, Fresno.