College Admissions Averts a Crisis
by Alan M. Berks
Link to Original Article
Housing prices were already falling nationwide when the 2008-09 college admission cycle began—bucking the advice of financial planners and analysts who had encouraged families to extract wealth from their home equity. Credit was growing harder and more expensive to get, as well.
“There were enough signs and warnings that we were clearly going into a recession,” recalled Tom Willoughby, vice chancellor for enrollment at the University of Denver (Denver, Colorado), “and that it could be different than others we had in the past. So our thoughts were, ‘What if this gets really bad?’ ” Yet few people expected the near total economic collapse that began in September of 2008 when stock markets worldwide crashed and banks, mortgage lenders, insurance companies—even America’s large automakers—failed. During the final four months of the year, 1.9 million jobs disappeared and unemployment reached its highest rate in more than 15 years— with no end in sight. “We were being warned that this was going to be the worst year of all years in contemporary higher education,” said Scott Friedhoff, vice president for enrollment and communications at Allegheny College (Meadville, Pennsylvania).
From January to mid-March, more than 60 percent of both students and parents said that the economic downturn had affected their enrollment decisions already, according to the Princeton Review’s “College Hopes and Worries” study. Students and parents said they would be applying to colleges and universities with lower prices, to more “financial aid safety schools,” or to institutions closer to home in order to save on travel costs. And more than 80 percent of the families said that financial aid would be “extremely or very necessary” to pay for a college education.
In May, when the National Association for College Admission Counseling surveyed high school counselors, 71 percent of the respondents reported “an increase in the number of students foregoing their ‘dream schools’ in favor of more affordable options.” Thirty-seven percent indicated that more students planned to attend a community college instead of a four-year college.
Clearly, cost and crisis were on everyone’s mind.
More Students in Need
At Concordia University Chicago (River Forest, Illinois), Evelyn Burdick, vice president for enrollment and marketing, was seeing the consequences of the crisis walk through her doors: “More students came into the office saying, ‘My dad lost his job. My mom lost her job,’ ” she recalled. “Some were having difficulty getting loans. Credit was tight before, and now it had become tighter.” Concordia decided to increase both merit and financial aid in August and September of 2008—just in time for the increasing number of students in need.
Nationwide, roughly 25 percent more students applied for federal aid during the first quarter of 2009, compared with 2008’s first quarter. Many other institutions, including Allegheny and the University of Denver, also shifted more money toward institutional aid awards in response to the increase in FAFSA filings. In fact, 77 percent of the respondents to a National Association of Independent Colleges and Universities membership survey reported increasing institutional aid in some fashion.
At Willamette University (Salem, Oregon), the financial crisis inspired creative thinking that cut through institutional bureaucracy. “We knew that families were suffering, and we felt we needed to do something beyond the regular application for financial aid,” said Madeleine Rhyneer, vice president for admission and financial aid and chief marketing officer. During strategy sessions in the fall of 2008, President M. Lee Pelton proposed that a recent undesignated estate gift be dedicated to a special aid program. Within two months, Willamette unveiled the Scholar Achievement Loan: a four-year, no-interest loan program that would convert to a grant if the student maintained a 3.0 GPA and graduated in four years.
To qualify for Willamette’s new program, applicants wrote a short essay describing how their financial situation had changed since disaster struck the economy. While other students in need continued to receive help through the regular financial aid process, Willamette reached out further to students and families whose planning for college had been battered by this specific, unexpected series of events. Two hundred students, both new and returning, had already received funding by mid-summer.
Recognizing and addressing the changing financial circumstances of students who were already enrolled was another strategy colleges and universities employed to buffer against the possibility of declines in first-year student enrollment. “We’ve made a concerted effort to reach out to our current students,” said Bridget Krage O’Connor, vice president for enrollment management and communications at St. Norbert College (De Pere, Wisconsin). “We’ve increased counseling and met individually with those who may need extra help.”
At Augustana College (Sioux Falls, South Dakota), returning student retention “may be the highest it has ever been,” predicted Bob Preloger, vice president for marketing and communications. He credits in part the effort Augustana made to send enrolled students their financial aid awards for the coming year earlier than ever—before the students went home for the summer.
Of course, no college or university has an unlimited supply of resources to provide for the increased financial needs of their current or potential students. Administrators at Reed College (Portland, Oregon) discovered they needed to accept more students who required less financial aid. And at the other end of the spectrum, Greensboro College (Greensboro, North Carolina) offered free tuition to first-year students in order to reach its enrollment goals— but doing so meant it had to leverage its historic campus as collateral on a significant loan.
Trouble at the Publics
Budgets were also tight at public universities and community colleges. Not only were these institutions’ funding levels being threatened by their states’ fiscal crises, but at least a dozen states planned to reduce students’ financial aid award sizes, eliminate grants and tighten eligibility guidelines because of a lack of money, according to the Associated Press. Shortfalls like Illinois’ $11 billion budget deficit came just as students were showing greater need.
“The people who are coming to us are far more desperate than in any other year,” said Cheryl Warmann, director of student financial assistance at Oakton Community College (Des Plaines and Skokie, Illinois). “The financial need they have isn’t just to pay for colleges; it’s to try to continue to pay the mortgage.”
For some families, Warmann said, their incomes have dropped so significantly that they became eligible for federal Pell Grants and state grants that would not have been available to them before. Consequently, she and her colleagues were working harder, and looking in more places, to help these families find the money they need. Recently, President Obama announced a $12 billion, 10-year initiative in support of community colleges nationwide, but that money is not in the community colleges’ pockets yet—and some of it is earmarked for capital improvements and other non-tuition- related expenses.
In Florida, where the state suffered from an almost $6 billion deficit in 2008-09, the public universities were given permission to raise their tuitions up to 15 percent, until they reach the national average. Fortunately, the state’s Bright Futures program, which pays resident tuition for students who meet certain criteria, was too popular a program for the legislature to cut, so regardless of the tuition increases, these scholarships will continue to pay 75 to 100 percent of a Florida resident’s tuition costs.
Bryan Herrmann, director of admissions at the University of Minnesota, Morris (Morris, Minnesota), is seeing Minnesota public universities and their students benefit from money set aside in the 2009 stimulus bill to hold down the cost of tuition. Both the University of Minnesota colleges and the Minnesota State Colleges and Universities System imposed tuition increases of only 3 percent for the coming year. Even so, Morris has had to make adjustments to its student financial aid awards. “We’ve had quite a few students who have parents with changes in their job status, so we’ve been working with families on an individual basis,” Herrmann said.
Communicating Outcomes
With so many families concerned about paying for college, the big question for the 2008-09 admission cycle was whether the financial crisis would cause a critical mass of students to turn away from private colleges altogether. In the 2009 survey conducted by Public Agenda and the National Center for Public Policy, 67 percent of the general public (20 percentage points higher than in 2000) believed that many qualified people “could not get access to college education” due to financial barriers. Therefore, “you can’t overstate the importance of making the ‘value proposition’ clear,” argued Willamette’s Rhyneer.
Knowing that prospective students and their families would be even more conscious of prices this enrollment cycle, Augustana College placed its own “Value Proposition” literally front and center on the home page of its web site. “We spent the whole fall assembling data,” said Preloger. Augustana makes nine claims about its value proposition and backs each one up with exhaustive evidence. In addition, administrators knew they needed to publicize the fact that Augustana’s tuition price is, on average, $9,000 less than that of its private college competitors. “We’re a private college that doesn’t cost as much as other private colleges, and we’ve got to be more direct about this,” explained Preloger.
Concordia University Chicago, too, made “a very intentional and conscious decision to begin talking about affordability earlier in the recruitment year than we had in the past,” said Burdick. “We had very targeted communications messages about the value and affordability of a private college, and we kept focusing on outcomes. An institution that doesn’t recognize that families are questioning [value] is, in my opinion, taking a huge risk.”
St. Norbert College’s administrators also knew they had to do something different. O’Connor described how they kept asking themselves, “What are we going to do this year that is really going to help insure that our constituencies know that we are paying attention to the economy, that we respect what’s happening with families, and that we are providing financial aid that proves a private college is still accessible?”
So in March 2009, St. Norbert hosted an open community forum on “Access and Affordability” and invited the presidents and chancellors of their competitors in the region to participate. Never before had the leaders of St. Norbert, University of Wisconsin- Green Bay, the Bellin College of Nursing, Northeastern Wisconsin Technical College, and the College of the Menominee Nation stood shoulder- to-shoulder to explain the value of their institutions as a group. “You know you’re in a different world when you’re standing with your competitors,” said O’Connor.
Wisconsin Lt. Governor Barbara Lawton’s attendance at St. Norbert’s event, which was covered by numerous television and print reporters, also communicated that the state believed colleges in northern Wisconsin, both public and private, were of critical value to the state’s growth. “We have not seen the kind of decline we might have had we not made a very concentrated effort to get the word out that we were providing significant scholarships, and that we have a four-year graduation guarantee,” O’Connor asserts.
Public universities like the University of Central Florida (Orlando, Florida) also have difficult challenges when it comes to communicating value, given that the budget cuts forced upon them by state legislatures always make front-page headlines. “Our university has had to make some difficult decisions in regard to program cuts,” admitted UCF’s Gordon Chavis, associate vice president of admissions. But he added, “We’re constantly changing. We’re less than 50 years old, so it’s not unheard of for us to add a program or change a program. We’re still creating traditions, so it’s easier to make changes in an institution this young.”
Applications and Admits
What impact, then, did colleges’ preemptive efforts have in mitigating the effects of the financial crisis? Enrollment at Oakton Community College was expected to increase 20 to 30 percent for the fall semester, a rise comparable to predicted increases at other community colleges nationwide. Small private colleges, on the other hand, entered the enrollment cycle worried about attracting enough students to fill their classes.
Contrary to some admission officers’ fears, applications rose not only at community colleges, but also at many private institutions. Applications at the University of Denver increased 29 percent, for example; at Willamette University, applications grew 35 percent. Concordia University Chicago will be admitting the largest class in its 145-year history as a result of a staggering 77 percent increase in applications. Concordia admitted 52 percent more students and expected a 30 percent increase over the previous year for its incoming class.
Indeed, many institutions decided to increase their number of acceptances with the expectation that more students would be forced by financial circumstances to decline to attend. The University of Denver, for example, sent offers of admission to 1,300 more students than the previous year. “If ever there was a year that maybe fewer students would accept our offer,” explained Willoughby, “this was the year.” As it turned out, 3 percent fewer accepted. Still, the University of Denver was projected to come out 6 percent ahead of where it originally expected to be.
Likewise, the University of Redlands (Redlands, California) increased its offers of admission by 2 or 3 percent. Even the University of Central Florida, already one of the five largest universities in the country and experiencing a 13 percent increase in its applicant pool, admitted “a larger number of students to help buffer a softer yield,” reported Chavis.
Going Online for Yield
As admission officers turned their focus toward yield efforts, many institutions explored the need to have more of a presence in online social networks this year than ever before.
St. Norbert College reached out to its admitted students with social media applications ranging from YouTube videos to podcasts to blogs. According to O’Connor, the college’s customized channel on YouTube allowed St. Norbert to post more substantive information and reports and is approaching 1,000 views. A Facebook application St. Norbert released late June 2009 had 4,000 views within two weeks. “It’s too early to tell what that’s doing for our yield,” O’Connor said, “but the feedback has been positive. Prospective students and their families are really enjoying it and letting us know.”
Bill Paige, manager of communications at Oakton Community College, acknowledged that their will to use social media has also increased in the last six months. “Our need to [proactively] go out and attract students like a private college does is probably not as great,” he said, “but we do enjoy having our presence on Facebook. If a potential student wants to check us out on Facebook, I think they’d be pleasantly surprised by the amount of activity going on. It’s good to show a student that your college is technologically adept and keeping pace with some of the newer forms of communication.”
Allegheny College uses online tools to promote the experience on the campus, to announce events, to post new photos, and more. Mike Richwalsky, assistant director of public affairs, pointed out that “the technical level of these students is amazing. My seven-year-old knows keyboard shortcuts that I didn’t even know existed. We’re going to have to change and adapt to make sure we’re keeping on top of those things.” While many admission officers prefer to take a “wait and see” approach to all of this technological change, Richwalsky believes they’re missing out. “If you’re going to wait six months to jump in, you’re going to miss out on that group of students,” he said.
The University of Central Florida’s Chavis agreed that “the generation we’re attempting to attract is demanding those technological changes.” But he confessed, “We’re just not there yet.” The problem for many institutions, public and private, large and small, is keeping up with the ever-increasing rate of online change.
For example, the web site Zinch.com has only been around for two years, yet it already boasts 700 colleges and half a million students as users of its social network. The site not only offers information about scholarships and other college resources, but also allows students to connect with each other in “clubs” and post videos and photos that show off their unique talents. Students can “shout out” to colleges and universities that interest them, and the institutions can “show them love” in response. Another new web site, Unigo.com, targets prospective students through videos and campus reviews that are posted by currently enrolled students at more than 2,000 colleges and universities across the country—and it did not even exist during the previous admission cycle.
Regardless of how much or how little an institution chooses to dive into the social networks, the days when all communication could be careful, slow, and deliberate are gone.
“You can’t control the message anymore,” said Allegheny’s Richwalsky. “And you can’t spend the time and effort to set the facts straight or dispute them everywhere. But you can at least be a small part of it. You can at least have a voice in the big nebulous crowd that is the web.”
“If you’re confident in the people who are going to be representing the college in these social networks, the upside is tremendous,” added Allegheny’s Friedhoff.
Indeed, though the mass of information and the speed at which it moves in social networks can be frightening, it can also be useful. In March 2009, an article in The Wall Street Journal cautioned families to rethink their admission decisions in light of the new economy and check whether a college would financially still be able to provide the services it promised. Willoughby at the University of Denver used a blog to disseminate his institution’s counter-message to its constituents quicker than ever before.
Many admission officers recognized that the onslaught of additional information available to prospective students on the web may require a not-unwelcome recommitment to the core mission of their institutions. As Willoughby put it, “What we can control is the strategic attention and focus and investment, to make sure that students have an experience we say that they will have. If you do that, then you can have more confidence when the audience is owning the message.”
Battling Melt
Even as the admission cycle was winding down, the uncertainty remained for some colleges and universities. As the economic downturn continued, admission and financial aid officers wondered whether a large number of students who had made deposits would melt away before the new semester began.
In California, for example, where the state legislature wrestled with a $26 billion budget deficit until mid- July, the insecurity was particularly acute. One of Governor Arnold Schwarzenegger’s cost-cutting proposals included eliminating the entire Cal Grant program. “We were exceptionally concerned about the Cal Grant,” recalled Michelle Whittingham, acting director of admissions at the University of Santa Cruz (Santa Cruz, California). Even non-recipients would have been impacted by cuts in the program, she explained, because “grant money is pooled” together at the University.
At the University of Redlands, more than 20 percent of the incoming class receives Cal Grants that provide almost $10,000 per student. To cover the possible expense, Redlands would have had to find an extra $1.3 to 1.4 million in its budget. In June, Dean of Admissions Paul Driscoll said, “We know something’s going to happen, but we don’t know what. We’ve got families that are probably feeling anxious. Some of them might be feeling not completely settled and finished.”
Thankfully, when the budget was finally settled, the legislature preserved the Cal Grant program. “This year turned out to be not as bad as people had thought, and in some cases, much better than anyone would have expected ... although having things hanging over your head makes you feel pretty vulnerable,” concluded Driscoll.
Higher education administrators in Illinois are still feeling vulnerable. As Oakton Community College’s Warmann explained, “The way the state has set up the budget, right now we’re not expecting any money for our state grants for our spring term.” The hardest part, she said, is simply not knowing what the legislature intends to do about it. “But they have to do something,” she said.
What Does the Future Hold?
By the end of the summer, the National Association of Independent Colleges and Universities was projecting an average 0.2 percent increase in undergraduate enrollment among its membership institutions for the fall of 2009. Among its survey respondents, 67 percent reported a projected increase or no change in new undergraduate students.
Surprised by generally positive results, many enrollment officers theorized that the 2008-09 admission cycle was far enough along before the economic crisis hit that parents and students chose not to disrupt their plans. “I think there’s a number of us that think this next year could be harder,” said the University of Redlands’ Driscoll.
“Even if the economy turns around,” wondered Herrmann of the University of Minnesota, Morris, “will families go back to pre-financial crisis mode, or will they be in a more conservative mode in terms of evaluating colleges?” On the other hand, if the economy does not improve, he feared what tuition will look like after the stimulus money that helped plug this year’s state budget deficits runs out.
The University of Denver’s Willoughby saw a silver lining among the clouds of the economic crisis. “A lot of good could come out of this,” he suggested. “It will cause colleges and universities to take a really good look at themselves and ask questions like: Are we fulfilling our mission? What is essential? How can we improve the quality of what we offer?”
Still, the trends underlying enrollment cycles in the recent past have not disappeared, either. More students are expected to transfer more often, “swirling” among multiple institutions. Population shifts from the Midwest and Northeast to the South and West will continue to put pressure on the applicant pool in certain geographic areas. And demographic shifts from a majority Caucasian to a more diverse population are requiring institutions to consider how their campus cultures invite and retain new students. Many of the trends point to an increased applicant pool from immigrant families with no college history and more economic need than students in the past.
What’s more, the Obama administration is proposing legislation that would result in major changes to the higher education system, from increased funding for Perkins Loans to an emphasis on direct lending and more, all in service to the goal of having the highest graduation rates in the world by 2020.
Perhaps most importantly, though, no one has yet found a solution to the problem of tuition that has risen far faster than families’ earnings and savings. The dramatic nature of the current economic crisis has caused the academy to question whether higher education’s current financial model is even sustainable.
And all indications are that the next recruiting year will be even more challenging than the last one. As consumer confidence remains shaky post-recession, with buyers perhaps permanently shifting to more cautious and frugal behavior, the marketplace’s focus on net price and value will likely dominate the next enrollment cycle, too—which means colleges and universities will be in for another wild ride in 2009-10.
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