“Enrollment Shortfalls Spread to More Colleges,” a Chronicle headline read this week. Among the private colleges expected to miss their enrollment goals this fall, some are “institutions that have rarely, if ever, had to worry about filling classes,” the article notes.
Newly released results of NACUBO’s 2018 Tuition Discounting Study show that 40 percent of private colleges experienced declines in first-time freshmen enrollments from 2015 to 2018. Among them, 65% cite student “price sensitivity” as a key reason for their enrollment drops.
Private colleges’ efforts to combat price sensitivity via tuition discounting are starting to hit a ceiling. The average institutional grant amount awarded to first-time freshmen has increased nearly 91 percent since the 2008 recession, while the published price increased 47 percent. The resulting rise in the tuition discount rate means that net tuition revenue growth can’t keep up. And because more than three quarters of institutional grant dollars are awarded to meet students’ demonstrated need, colleges don’t have much room to maneuver in using financial aid strategies to increase revenue.
Along with their sensitivity to price, students have high expectations for the outcomes of their college investment. The Cengage Student Opportunity Index shows that recent and upcoming college graduates tend to be overly optimistic about their financial futures. For example, while 93 percent of soon-to-be graduates think they’ll land a job related to their educational background within six months of graduating, typically only 60 percent do. And while on average they think it will only take six years to pay off their loan debt, the usual reality is 20 years.
As private colleges try to tell the story of their value, the price students pay and the results graduates get have become just as important as the quality of the educational experience. So strategies that address every element of the marketing mix—product, price, promotion, place, and people—must be formulated and applied in order to achieve enrollment success.
90% of first-year students received financial aid that covered an average of 60% of the listed tuition and fees. (NACUBO)
Graduating students “don’t yet appreciate how loan debt and housing costs may impact their ability to find the jobs they want.” (Cengage)
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For too long, much of higher education has been preoccupied with prestigious assessment in analyzing marketplace conditions. But instead of signaling high quality, high price (published and discounted) is now a real obstacle for students and their families. Interest is also dampened when antiquated programs don’t facilitate getting a career-launching first job and when there’s a lack of convenient and accessible options for taking courses (whether on campus, at alternate sites, or online).
And if a college is relying solely on its admission and enrollment management professionals to help prospective students make the buying/investing decision, then it is ignoring another marketplace reality: Faculty, staff, administrators, alumni, and current students and their parents are all key influencers. Everyone on campus should understand that “it takes a village” to convince and persuade students to enroll and stay. Operating in silos, being preoccupied with discussing and discerning, and being afraid of engaging in edupreneurial doing only exacerbates problems. Now is the time to DO. Come together and talk the walk—and then walk the talk, together.