Paul Friga, PhD, is our AGB Consulting practice area leader for strategic transformation of public higher education and the clinical associate professor of strategy at the Kenan-Flagler School of Business at the University of North Carolina at Chapel Hill.
Over the past summer and this fall, I have been presenting to boards and cabinets in webinars about macrotrends affecting higher education strategies in 2022 and beyond. Topics have included the expanded use of technology, hybrid operational models, oversupply/capacity of educational seats offered, public-private partnerships, and new offerings beyond degrees. However, the most important trend is the past, current, and future declines in the number of high school graduates, the primary target of most universities. We were experiencing declines in traditional-aged enrollments pre-COVID-19, and then things got worse. Last spring, enrollments declined 3.6 percent overall from the prior spring and plummeted 4.9 percent this fall (2021) from the prior fall.[i] The predictions are that such declines will continue over the next five to eight years and perhaps longer.
Accordingly, this should be a board-level issue. In this month’s blog, I offer some advice about how to frame the conversation with your campus leaders to get the university moving forward on this challenging topic.
Step 1. Face Reality
I imagine that most universities have presented “strategic enrollment growth plans” to their boards over the past few years. The problem is that many of these plans include growth assumptions that are not always based in reality. The board should start with a simple request – for the enrollment trends over the past 10 years. This should be analyzed for full-time as well as part-time students. Relatedly, the board should review the retention rates over the same period of time. According to recent data just released by the U.S. Department of Education, retention rates have dropped for full-time students this fall (from 76.1 percent to 75.7 percent) and even more for part-time students (from 46.5 percent to 43.5 percent).[ii]
Since the macronumbers are on the decline, many universities will be as well. A recent exception seems to be for-profit universities, especially those with online programs marketed to older student segments. Top public and private institutions are likely holding their own, and the most exposed segments are small- to medium-sized publics and privates and community colleges. This is alarming as they represent a more significant base of underserved student populations.
It is time to question the assumptions that universities have been utilizing around anticipated enrollment growth due to organic efforts such as more focused or increased marketing. The students simply aren’t there. And this is especially true if you are in the northern or central regions as general migration trends seem to be moving more south and west.
Step 2. Analyze Options
Request your campus leaders to lay out all options for growing enrollments, along with pros and cons, considering such factors as market size (number of potential students), fit with culture and faculty willingness, required investments and expected ROI (in terms of enrollments and related tuitions/fees). Shown below is a list of key segments to get your analysis started.
- Traditional-Aged Students – In addition to investing more in marketing, advertising, repositioning, and social media, each university should develop a clear message of differentiation. Why is your university different, really different, and how does that connect to students’ needs? Stress the most unique academic program offerings and also start new program in areas of highest demand from traditional students.
- Retained Students – One of the most overlooked “prospective” student segments is the retention of your current students. Money invested in new initiatives to increase retention rates would be very well spent as it costs less to “acquire” students you have already enrolled. If a university with 20,000 students and a retention rate of 75 percent is able to increase that rate to 80 percent, that would result in 1,000 more students enrolled. If the average tuition was $20,000, that would be $20 million in revenue.
- Older Students – What percent of your students are “nontraditional” or older? This will need to increase dramatically over time. Note that this will likely require more part-time programming as well as nondegree offerings such as boot camps, executive education, and certificates.
- Transfer Students – As traditional student segments decrease in size, universities are gearing up efforts to attract and increase the ease of transfer not only from four-year institutions but especially from community colleges. The focus should be on bringing students into programs with lower enrollments and also developing new interdisciplinary programs that allow for more flexibility in terms of counting associate degree credits toward degree completion. Additional strategies include targeted scholarship programs, especially to get the students to come to your campus for a year. Finally, consider formal partnership or joint degree programs with other institutions to allow transfer students to start taking your classes earlier – in person at the transfer facility or online as described below.
- Online Students – Virtual education is here to stay. I worked on a strategy for UNC Chapel Hill two years ago that projected a possible 10,000 new students over a 10-year period with new programs in a number of areas across campus. You can work with an OPM (online program manager) for a faster start and for marketing and student acquisition prowess, but be prepared to give up around 60 percent of the revenue (there are actually reasons when this may be the best way to go). Or you can build the capability yourself, but this would take more time, and talent in this space is hard to come by. Or you could pursue the final strategy of acquisition as described in our final strategic option.
- Acquired Students – One of the most ambitious, but uncommon, approaches to growing students would be acquisition of a struggling university or college. While traditionally low in number, these transactions are increasing due to the significant stress that COVID-19 has placed on an already teetering economic business model for many institutions. This strategy would require significant investment in time and energy of top university leaders and the board and is typically aided by third-party consulting help (incidentally, AGB has one of the leading experts on this topic: Rick Beyer and his AGB practice area is described here).
Step 3. Take Action
There are three key elements to recommended actions to increase enrollments at your university. The first step is to require a clear vision. Have your university do a gap analysis comparing future projections of expenses over time with multiple scenarios of student enrollments – best, base, and worse case. The best should not include more than a 5 percent compound annual growth in enrollments (absent an acquisition strategy), the base should likely be your current projects less about 10-15 percent, and the worse could be up a 25 percent decline over the next five years.
Then set a positive vision whereby the university meets or exceeds its needed enrollments through purposeful new initiatives as described above. Allocate sufficient resources to enable the change to actually happen.
Help from AGB
I am the AGB Consulting practice area leader for Strategic Transformation of Public Higher Education and stand by to review your current strategic plan, identify your market differentiation, and consider ways to invest according to key priorities. I am available to schedule an hour-long call, at no cost, to review your situation — just email me at email@example.com .
Given the urgency of the times, I am hosting a special AGB monthly workshop program on “strategic transformation” exclusively for board members and presidents. Our next workshop is directly related to this topic! You can register for “Increasing Enrollments and Yield” here. For more articles, slide decks, and videos on suggested strategies for your university, visit my website.
Opinions expressed in AGB blogs are those of the authors and not necessarily those of the institutions that employ them or of AGB.