Enrollment as a Lens on Higher Education

Our Opportunity and Our Imperative

Dan Lundquist: founder, Education Consultancy; former college vice president

Situation Analysis Today

1) Price tags continue to increase fueling anxiety1) Price goes up while revenue goes down

2) But there are fewer college-ready students from families who are able or willing to pay

3) Though they see the value of a college education, families hedge more (negotiate and borrow) and will “settle” for a second-choice college if it saves them money (up front in tuition or longer-term in loans)

Situation Analysis4) 61 percent of colleges didn’t meet goals by May 1

(up from 60 percent a year ago) 4) 71 percent of private bachelor’s institutions didn’t meet

goals by May 1 (up from 59 percent a year ago).

5) 32 percent of all institutions – in violation of NACAC’s principles of good practice – reported recruiting students after May 1 who committed to other institutions (up from 29 percent last year).

6) SO expenditure/revenue tensions rise…for colleges and for families

The Data

2013-14: Most Colleges Missed Goals

PRICE

REVENUE

Situation Analysis• Education (and credentialing) is “evergreen” and can't be

killed.• Its importance and value are inherent parts of society; and given

structure in the form of highered institutions BUT… the past two decades of increasing demand and price elasticity have led to some purposefully inefficient practices most can no longer afford

• If allowed to continue with what are viewed as outmoded policies and practices the structure be driven to change by market forces (consumer choice) and regulation (government policy)

• Kodak presumably had more business savvy than highered and look what happened to them.

“Supply Chain” by Region

Estimated Enrollment Funnel for Higher Profile - No-Need Students: 2009

? ? AFFLUENCE?

? ? PERCEIVED VALUE?

? ? LUXURY?

? ? PRIVILEDGED FEW?

What If…?

The accuracy of the bottom-line number (whether 500 or 996) is not as important as the message the graphic illustrates: the Supply Chain for tuition-dependent colleges is shrinking. The alert it sends is unequivocal.

Today’s Parents

Today’s Price

10%

27%

median income new car private tuition public tuition0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Income and Expenses Over 40 Years

1974 numbers in 2015 $ 2015

$9,08

8

$31,6

98

$50,6

27

$78,4

57

$111

,919

$134

,077

$172

,791

$177

,571

$238

,976

$325

,366

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

Ability and Willingness to Pay for Private Col-lege, by AGI, 2013

(4727 cases reviewed)

ability to pay per year willingness to pay per year

$0 AGI

“You Say”: NYSFAAA member survey data

“You Say”: NYSFAAA member survey data

Attributes that will effect affluent families to consider a college that’s not the first choice

In a Fall, 2012 survey, 1270 Parents and 1200 Students from affluent families (AGI $100K-$250K+) indicate top two reasons to “downgrade” are cost-related

Source: Cappex July 2012 Survey: N= 1,270 Parents and 1,200 Students; Affluent income: $100k to more than $250k

Future Check: from unwilling to unable to priced-out in a generation

Why should we all care and why should we be sounding the alarm on campus?• Across the affluence spectrum, ability and willingness to pay is

decreasing at best.• As ability to pay increases, willingness to pay decreases:

• more and more students are going to their “second choice” colleges because of cost.

• If the more-affluent current parents are balking at paying today’s costs what will the next generation of parents do?

• …the first American generation pundits predict less well off than their parents….

• The next cohort of less-affluent parents will have an even more difficult time paying if college prices freeze today.