Ricardo Azziz has held quite a few government positions in greater schooling and led the merger that resulted in Georgia Regents College, now Augusta College. He’s principal at Strategic Partnerships in Increased Schooling Consulting Group.
He writes the common Merger Watch opinion sequence on company restructuring in greater schooling.
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The excellent news? Undergraduate enrollment this fall decreased solely 0.6%, the least quantity it has fallen because the pandemic began. The unhealthy information? Enrollment in U.S. greater schooling establishments continues to drop.
No surprise a latest S&P World Rankings outlook on greater ed is bearish on the trade, citing continued upward pressures on prices and downward pressures on enrollments and margins. It is a less-than-confident outlook from an company that solely examines 450 or so of the financially strongest faculties within the nation.
One reality that always will get misplaced within the hand-wringing accompanying enrollment and monetary studies? Measurement issues.
Analyzing enrollment traits from fall 2012 to fall 2020 for establishments that obtain federal monetary help, greater schooling misplaced some 1.7 million college students, or 8.4% of whole enrollment. Schools that had enrollments of fewer than 1,000 misplaced 35% of their college students. In flip, colleges with enrollments of 1,000 to five,000, between 5,000 and 19,999, and 20,000 to 29,999 misplaced 10%, 12% and 23% of their college students, respectively.
Solely the biggest faculties elevated their share of scholars
% change in whole pupil enrollment by faculty dimension, fall 2012-2020
Alternatively, colleges with greater than 30,000 college students really grew their enrollment by 19%, including some 760,000 to their rosters, collectively. Per this evaluation, a latest report from the City Institute noticed that between 2000 and 2018, the 50 U.S. public flagships, taken as a complete, elevated their whole pupil enrollment by 24%.
Just a few information are apparent from this evaluation. First, the connection between enrollment change and institutional dimension (whole enrollment) shouldn’t be linear. The very small faculty with fewer than 1,000 college students is an particularly endangered species. In the meantime the common bigger college, with 20,000 to 30,000 college students, has additionally suffered vital enrollment attrition and is probably going at vital threat of additional loss.
Second, the biggest establishments, with enrollments exceeding 30,0000 college students, did nicely regardless of the hostile surroundings. Third, previously decade some 2.5 million college students are not obtainable to smaller establishments, both as a result of fewer college students are pursuing the next schooling diploma or as a result of they have been absorbed by the rising 100 or so largest colleges. It’s a lack of college students at smaller faculties that’s equal to all the enrollment of 60% of all colleges with lower than 5,000 college students.
Why is that this the case?
Firstly, it’s about model recognition. The most important colleges, and some smaller extremely selective non-public faculties, get acknowledged extra readily. Feeding this recognition is the rising emphasis on rankings, the facility of athletics, and the power to leverage progressive — and newsworthy — scholarship and discovery. This branding and nationwide recognition drives pupil functions and enrollment from past the establishment’s native area. For instance, a lot of the expansion in public flagship universities over the previous 20 years occurred as their nationwide attain additionally elevated, with the fraction of out-of-state college students rising from about 25% in 2001 to 37% in 2018. In reality, the flagships that grew essentially the most throughout this era additionally noticed the best declines of their share of in-state college students.
Larger recognition is commonly pushed by elevated selectivity – as all of us need to belong to these golf equipment which can be exhausting to get into. In reality, between fall 2021 and fall 2022 enrollment declines have been concentrated within the least selective faculties, with solely extremely selective colleges seeing undergraduate enrollment beneficial properties. Within the knowledge I examined, colleges with pupil our bodies of 20,000 to 30,000 are sometimes regional establishments with much less selective enrollment.
Secondly, it’s about property and assets. The most important colleges have a better capacity to unfold administrative and overhead prices throughout a broad pupil base. Doing so frees assets that may be directed to creating sturdy on-line applications — additional leveraging their model and increasing their attain — proper into the yard of smaller, extra regional, colleges.
The broader base additionally permits them to broaden their educating capability with solely marginal added prices, whereas offering a better number of applications and amenities than smaller establishments. Smaller colleges with bigger endowments and assets additionally fare nicely. Because the latest S&P report reminds us, sturdy establishments that already get pleasure from good credit score rankings ought to anticipate continued excessive pupil demand and adaptability setting costs, whereas weaker establishments will face bills which can be more likely to develop sooner than their income.
Measurement is clearly not the one issue that can decide the expansion, and possibly the survival, of establishments of upper schooling. Nonetheless, it is likely one of the essential defining parts.
There are few good avenues for rising the dimensions of an establishment in a speedy method. Mergers, acquisitions and the odd partnership are some notable techniques price contemplating. Increased schooling leaders must maintain this in thoughts — together with the velocity with which the exterior surroundings is altering.
