American colleges and universities are reaching for every means through which they might increase net tuition revenue. Net tuition revenue is the revenue that the college takes in from tuition after factoring in (i.e. deducting) all institutional financial aid.
Net Tuition Revenue is Flat or Decreasing at Many Colleges
The harsh reality is that net tuition revenue is flat or decreasing at many institutions. Since tuition is the principal source of revenue for these institutions, this is an increasing problem. Put simply, a college cannot continue to exist without sufficient revenue to meet its expenses.
In the short term, colleges may be able to rely on one-time donations, increases in the annual fund, a higher endowment spending rate, or the use of temporarily restricted funds, but in the end, the financial health of almost all is heavily dependent on how much tuition they bring in each year.
Demographics Work Against Increased Enrollment as Revenue Source
Since national demographics work against higher enrollment levels from the traditional applicant pool of 18-22 year-old first-time students, an institution must now rely on other means to pay the bills.
Some look beyond the traditional pool of full-time, first-time students, working to build their transfer population or full-pay international students. But the transfer pipeline is hardly seamless and the optics of rising tuition sticker prices work against transfers, who often attend less expensive community colleges.
In addition, the policies of the Trump Administration cast a long shadow over the ability of colleges and universities to plan the size of their international student population with any certainty.
How best to create a robust admission pool from which to draw remains a thorny problem, but it’s important to institutional health. Colleges and universities rely on strong enrollments to right size their institutions. This means, in part, accounting for “stop outs” and “drop outs,” who diminish the size of their student body. If retention figures are not steady, or better yet improving, the impact on an institution’s bottom line can be dramatic.
Need for Predictable Retention Creates Alliance Within College Administration
The need for predictable student retention creates an alliance among enrollment, academic affairs, and student life professionals. Higher education institutions — and many of their accreditors — place special emphasis on improving retention to become more sustainable.
The problem is that it sometimes becomes more of a numbers game. Student affairs staff provide a plethora of programs and opportunities for students to connect. They work individually to support students who are homesick, unengaged, or dissatisfied with the campus environment. But what they often miss is that first link that should be made between what the school offers and what prospective students want.
It is not enough — indeed, it is unsustainable — for the student affairs budget will provide support for clubs that represent the whims of students at a unique moment in a particular class. Succeeding generations may not sustain the passion of students focused on a singular interest in later years. Further, the college or university may not be able to justify a growing roster of club and related activities.
No matter how wealthy, a college cannot support everything that each student might want to do.
Student Life Program Must Be Aligned with Enrollment Strategy
What will be required in the future is a more orderly, systematic, and systemic approach to student life tied directly to enrollment strategy. At the moment, most colleges enroll students because of the quality of their academic programs, if these are defined, well-respected, and differentiated from competitors.
But students live on a campus that is defined both by the classroom experience and the thousands of teachable moments that occur each day outside of classrooms and laboratories.
They may have institutional reputations as Christian colleges, outdoor environmental programs, the home of Greek life, and liberal or conservative, for example, that appeal to a certain type of student. The best example is how students attract their student athletes into well-regarded athletic programs.
Athletic Programs are Example of Student “Fit” and Retention
For generations, colleges have attracted athletes because athletics offers a unique, idiosyncratic experience for teammates. An athletic team is a “new home,” where students associate with others with similar passion and interests. For student-athletes, the culture of an athletics program will — in many respects — determine fit, and correspondingly, improve overall retention numbers based on this fit.
Enrollment officials should see their student affairs colleagues as a kind of front line on retention. It may be that much of the retention problem could be solved if student life worked more carefully with enrollment.
Student affairs must define not what current students want so much as how enrollment can attract students on the basis of what enrollment determines will be most attractive to prospective applicants.
Is it more useful for a college to have an equestrian team in an urban setting or a gospel choir that reflects the college’s efforts to recruit in urban areas? Should a college invest in a marching band if research demonstrates a demand for this kind of activity among prospective applicants?
These efforts to link enrollment strategy to shape student life to recruitment can have innumerable benefits. Like athletics, co-curricular student life offerings provide students a home-away-from-home and outside of their classroom experiences. It makes the fit possible.
Students experiencing a good “fit” are more likely to stay enrolled, boosting retention. And retention is perhaps the best predictor of how to increase the bottom line by growing net tuition revenue that every college desperately needs.