Small, private colleges and universities looking to boost enrollment numbers and revenues should focus less on recruitment and more on retention.
That was one of the major takeaways of a 12-month study done by the TIAA Institute and Rockefeller Philanthropy Advisors, which highlighted the opportunities for struggling institutions to “reframe” how they can be positioned for long-term success.
The TIAA and RPA cited the examples of four institutions – the College of Saint Mary in Nebraska, Benedict College in South Carolina, Iowa Wesleyan University and Dominican University of California – that have invested heavily in student outcomes and debunked perceived detriments such as being too small, tuition-dependent or endowment challenged.
Their positive stories – in both retaining students and boosting their bottom lines – came after they recognized that focusing heavily on being competitive might not be as transformational as providing access, services and resources to lower-income and first-generation students, and students of color. They were right. Because of that, one of those institutions that was on the verge of closing, has become financially viable again, even during the most challenging time for higher education.
“Concerns about financial sustainability, particularly for tuition-dependent colleges, are even greater in the aftermath of the COVID-19 pandemic,” said Anne Ollen, managing director at the TIAA Institute. “The recommendations and strategies shared in this report reinforce that it is possible – even helpful — to keep student success front and center while addressing financial concerns. Financial challenges don’t necessarily require straying from institutional mission and values.”
The costs of recruiting vs. retaining
In its “Aligning Financial Sustainability with Student Access and Success: Opportunities for Tuition Dependent Private Colleges” report, authors leaned on research, data and interviews with college leaders, academic experts and philanthropic organizations, which shared insight on how institutions can proceed given the financial challenges they face, both with their own increasing costs and those that are passed on to students.
They say susceptible colleges and universities, particularly those liberal arts schools “with fewer than 2,500 undergraduates, acceptance rates of 50% or higher, and at least 25% of undergraduates receiving federal Pell grants” effectively have taken two roads to try to achieve success – focusing on high academic achievers and those who have the ability to pay, or by targeting those who fall into low-income and first-generation categories.
Many see the first option as an easier, more sustainable way to achieve growth and the latter as a huge obstacle, rather than a chance to change the dynamic and perhaps the fortunes of the institution. The reality is, authors note, it costs more to recruit those elite students and keep them than it does to woo and retain students from lower-income backgrounds.
One leader quoted in the report said: “I think most of our institutions know what the financial benefits of retention are. But they don’t always know how to make retention happen. They don’t always know the inputs, beyond rough per-student expenditure, but do know the recruiting and replacement costs. And we all know it costs much more to recruit than to retain. If you better serve low-income students, you will be stronger financially.”
A decade ago, the all-women’s College of Saint Mary made it a mission to serve those students through several channels – from academic advising to support services – and not worry about growing enrollment. It focused instead on a series of game-changing affordability initiatives. It reduced tuition by one-third. It cut all fees. It enrolled higher percentages of Pell-eligible students and increased diversity.
The results have been amazing. It not only achieved its fall enrollment goals – at a time when the majority of colleges were seeing losses, especially at two-year institutions – but also stayed free of debt for the 13th consecutive year. In turn, scholarships have more than doubled and its completion rates have soared 10%. Now, 37% of its 630 undergrads are Pell eligible and 30% are first-generation.
“Our mission is to provide access to a high-quality, affordable education for women,” said Provost Dr. Sarah Kottich in the report. “We are not about being elite, rather we are about helping students improve their lives and their family’s lives through education.”
Examples of success … and questions to ask
The examples such as the College of St. Mary and Dominican University in California, which has posted sterling graduation (74%) and retention (86%) numbers, may come with a cost, but also with a new mindset and a focus away from the short-term. The College of Saint Mary model took more than a decade to fully implement, and it is still working on it. It didn’t cut tuition until five years after starting the process.
Some turnarounds, like Iowa Wesleyan’s, have come as the result of soul-searching and creativity, exploring and entering into partnerships with other colleges. Many have come as a result of the help of grants or foundations, as noted in the groups’ previous report: Philanthropy in Higher Education: Priorities and Approaches of Private Foundations.
Some, like Historically Black College and University Benedict College, have come from hyper-diligent work to offset millions in debt. Shortly after President Dr. Roslyn Clark took over, it lowered GPA standards, lowered tuition by 26% and put a strong emphasis on career pathways that would make an immediate impact in getting underserved students educations in rising fields. It sold off dorms and set lofty targets for retention and completion. It has not only hit them, it has surpassed them by 20%. It also was able to give back to students during the pandemic.
“Educators and higher education funders agree that in order to support underrepresented and undersupported groups, academic institutions must provide additional resources to invest in these students to help ensure their success,” said Greg Ratliff, senior vice president, advisory services for RPA.
The examples in the report are proof that turnarounds are possible. But before small colleges and universities completely throw caution to the wind and try a new approach, study authors offered eight questions they should be asking when thinking about access, success, and financial sustainability:
- “How does increasing student access and success factor into your business model?
- How do you assess your ROI (return on investment) for investments in access and success?
- How is responsibility for improving student success distributed across your institution?
- How do you keep equity concerns front and center when under financial duress?
- How much money do we save on recruiting for each student retained year-to-year? How much do we spend to retain them?
- What do we save when a student graduates in four years instead of five?
- Are students’ small debts to the college impeding retention and completion?
- How many students are losing access to aid because their grades or course loads drop too low? How does that affect their progress and our finances?”
