Leaders at colleges and universities nationwide are pursuing strategies to boost student recruitment and retention as they brace for significant enrollment declines expected to hit the industry over the next few years.
The demographic cliff was cited as the No. 1 challenge expected to have the most significant financial impact on colleges and universities over the next 5-10 years, according to Syntellis’ 2023 CFO Outlook survey of more than 100 U.S. higher education finance professionals.
Some institutions have already seen enrollment numbers sink in recent years due to numerous forces, including shutdowns early in the COVID-19 pandemic and long-running economic uncertainties. Record-high inflation drove many potential students to join the workforce rather than pursue a degree as increased living expenses made educational costs financially unfeasible.
The strain on colleges and universities that historically relied heavily on tuition revenue is immense, and no institution is immune. Higher education leaders discussed the complex challenges associated with enrollment challenges in a recent Syntellis webinar in partnership with the National Association of College and University Business Officers (NACUBO). Topics included the many causes behind current and future enrollment declines and what their institutions are doing to respond. Some common strategies include:
Bolstering pipelines for incoming students through partnerships with high schools or other higher education institutions, such as between two- and four-year colleges
Expanding new program offerings, such as non-credit courses and training programs for working professionals
Balancing tuition discounts and revenue to provide some relief for students in a tough economic climate while maintaining adequate funds to maintain operations
Growing student pipelines and program offerings
Enrollment is the No. 1 challenge at the State University of New York (SUNY) Broome Community College, Larry Allen, the college’s Budget and Institutional Effectiveness Specialist, said during the webinar panel discussion. The public college in upstate New York has about 6,000 students enrolled in more than 50 academic programs.
“Our traditional enrollment has declined almost 43% since fall 2010,” Allen said. “It is a huge concern for our campus.”
Various factors are contributing to the downturn, such as population declines among high school graduates and competition from more affordable options for in-state residents, including widely available academic scholarships for low-income New York residents. SUNY Broome Community College has several initiatives aimed at stabilizing and growing enrollment, he said.
While traditional enrollment is down, concurrent enrollment for students who take college-level coursework in high school has tripled over the past decade. The college is actively expanding pathways for those concurrently enrolled students to be admitted directly after graduating high school.
The two-year college also has articulation agreements to make it easy for its students to transfer credits to several four-year institutions, including Binghamton University, the University of Buffalo, the University of Albany, and other SUNY colleges. In addition, SUNY Broome Community College is expanding its professional development programs to include non-credit courses and training classes for area manufacturing and engineering businesses.
Balancing tuition revenues and discounts
At Montana State University, leaders are concerned about the effects of the demographic cliff, especially because roughly half of their students come from out of state. The university relies on those students for a large part of its budget and to offset lower tuition rates for in-state residents, said Megan Lasso, Chief Budget Officer at Montana State University.
At the same time, university leaders recognize the need to keep tuition rates competitive and affordable for all students in a difficult economic environment with rising living costs. Trying to optimize net tuition revenue is a constant balancing act between determining the best tuition pricing and tuition discounting strategies. Any discount strategies for non-resident students must be carefully analyzed and assessed, she added.
“With the enrollment cliff and increasing competition, we have to be careful we’re not pricing ourselves out of the market in terms of net price, especially with the cost of living in Bozeman changing,” Lasso said. “At the same time, we must ensure we have enough revenue to operate. It's all about ensuring students’ success.”
In addition to finely tuning tuition pricing and discounting strategies, Montana State University leaders are examining other avenues to address enrollment concerns, such as expanding professional master’s degree programs and rebuilding the international student population, which has waned since the pandemic.
Getting the right tools to tackle tuition challenges
With any initiative aimed at confronting enrollment challenges at any college or university, having a plan based on solid projections and analyses is essential, Lasso said.
“We’re going to face a lot of uphill challenges over the next several years in terms of ensuring that we have stable financial outcomes,” she explained. “To not have that plan means that when something like a pandemic or an enrollment cliff happens, we’re simply not prepared.”
Decision-makers need quick access to timely, reliable data and reports to monitor trends in enrollment and tuition revenue. With effective tuition revenue planning using tools such as Syntellis’ Axiom™ Tuition Planning, higher education leaders can evaluate strategic priorities over several years. They should start by conducting a detailed analysis for a complete picture of net tuition revenue, followed by extensive modeling to project the potential impacts of various scenarios or combinations of scenarios, such as a 10% drop in out-of-state enrollment or a 3% increase in in-state tuition.
Providing these types of analyses goes a long way in helping college and university leaders, community members, and other stakeholders understand the anticipated effects of enrollment declines. When combined with solid operational budgeting and long-term planning, tuition revenue planning provides an effective strategy to help colleges and universities navigate looming enrollment declines.
Watch the webinar here.