WaPo feature on bad economic outlook for colleges

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My kid is interested in Roanoke College and University of Lynchburg. Are they screwed?

In the next 10 years - probably not.

There are some failrly well regarded schools already on the bubble - Earlham is really struggling as is Beloit.

My formerly SLAC, now a LAC is one of these. The endowment is only at $400M. We've got a massive capital campaign going but the institution may not recover.

At $400m they have a long time before they have existential worries. But endowments aren’t what people think they are. They are not vast hoards of treasure that sit there for a rainy day. My LAC has a $1.5B+ heap and yet that funds a very small fraction of operations. Much still comes from tuition, and full-pay customers are hard to turn away. Many colleges whittled their endowments before realizing need-blindness is expensive. Haverford, Holy Cross, and Wesleyan are a few that come to mind.

[Anonymous]

I hadn't known Earlham was struggling and I quickly googled and in one of the campus articles on the departing president (after just one year) I found this quote:

"Earlham was facing pressure to enroll more students who could pay close to the full sticker price, while Price was known to feel strongly about the importance of continuing to further diversify the student body by attracting more first-generation and minority students, the faculty member said."

That pretty much sums it up. The issue isn't changes in demographic sizes (number of graduating seniors) but that the model of private higher education has become so increasingly reliant on finding enough full paying students to subsidize the other half of the student body at hefty discounts and the byproduct is that tuition shot up for full freight in order to pay for allthe bells and whistles, including financial aid for lower income students, which is now squeezing out the upper middle classes, and left the school trapped into a dangerous place. There's only so many full freight families and only so many of those would be interested in a place like Earlham.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My kid is interested in Roanoke College and University of Lynchburg. Are they screwed?

In the next 10 years - probably not.

There are some failrly well regarded schools already on the bubble - Earlham is really struggling as is Beloit.

My formerly SLAC, now a LAC is one of these. The endowment is only at $400M. We've got a massive capital campaign going but the institution may not recover.

At $400m they have a long time before they have existential worries. But endowments aren’t what people think they are. They are not vast hoards of treasure that sit there for a rainy day. My LAC has a $1.5B+ heap and yet that funds a very small fraction of operations. Much still comes from tuition, and full-pay customers are hard to turn away. Many colleges whittled their endowments before realizing need-blindness is expensive. Haverford, Holy Cross, and Wesleyan are a few that come to mind.

The other thing the article pointed out is that the top tier schools are very good at controlling their need percentage.

At the same time, elite colleges aren’t accepting more lower-income students. The share of low-income students receiving federal grants at the most competitive colleges stayed essentially flat between 2000 and 2014, going from 15 to 16 percent, while it grew from 46 to 59 percent at noncompetitive institutions, according to the Washington-based consulting firm EAB. That’s surprising, given the explosion in the number of organizations that help these students access selective colleges. Also surprising is how hard it can be for these students to get into elite colleges: Tatiana Poladko — co-founder of TeenSHARP, a Delaware- and New Jersey-based nonprofit organization that helps 100 underrepresented high-achieving students get into selective colleges every year — says that her students typically apply to 15 to 20 of these colleges, and are happy to get accepted to one. “The bar has just gotten so much higher,” Poladko says. “The line I get all the time [from admissions] is, ‘Our pool of African American low-income first-generation students is deep.’ ”

[Anonymous]

Idealism is fine, but as it approaches reality, the costs become prohibitive.

[Anonymous]

Anonymous wrote:I hadn't known Earlham was struggling and I quickly googled and in one of the campus articles on the departing president (after just one year) I found this quote:

"Earlham was facing pressure to enroll more students who could pay close to the full sticker price, while Price was known to feel strongly about the importance of continuing to further diversify the student body by attracting more first-generation and minority students, the faculty member said."

That pretty much sums it up. The issue isn't changes in demographic sizes (number of graduating seniors) but that the model of private higher education has become so increasingly reliant on finding enough full paying students to subsidize the other half of the student body at hefty discounts and the byproduct is that tuition shot up for full freight in order to pay for allthe bells and whistles, including financial aid for lower income students, which is now squeezing out the upper middle classes, and left the school trapped into a dangerous place. There's only so many full freight families and only so many of those would be interested in a place like Earlham.

Earlham isn't *really* struggling. They had a somewhat alarmist advisory board and some unsustainable financial practices. They need to make adjustments but they should be fine (Note: I have no connection to Earlham, just work in higher ed data field).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:If the president weren’t an idiot they could just make up for these shortfalls with International students.

And exactly what changes in immigration policy that our "idiot president" is proposing or implementing affects the number of international students?

Since Trump became the nominee, the rise of white supremacists and xenophobia has led to a drop in international student enrollment at US colleges. Unfortunately, Canadian universities may start to see this as well after their elections.

Sorry the facts don't match what you would like to believe, but 2019 was a record year for international students, topping off at 1.09 million foreign students.

NP: That's the 2018 numbers (2019 aren't out yet), but there's been a slowing in the growth rate of international students in 2015/16 the percent change was 7%, in 2016-17 it was down to 3% and in 2018-19 it was down by 1/2 again to 1.5%. So the growth is definitely stalling, and applications are down further--with schools accepting higher balances. So while PP was incorrect to say there was a drop--you are disingenuous to say it is a "record year" when growth rates are clearly stalling--yes by the flat numbers every year is a record year, but the trend line isn't looking good.

"Record year": https://studyinthestates.dhs.gov/2018/11/open-doors-report-a-record-high-number-of-international-students

You didn't understand my comment.Every year for the past decade and a half has been a "record year" for international students because they are growing population. But that growth rate has been being cut in half in from 2015-2016, and half again in 2018-2019. People who seriously analyze data don't look at raw numbers when dealing with growing populations they look at trends. The growth rate is stalling. (It was disingenuous for the dhs to report it this way also).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Did you see this piece on the news awhile ago? It predicts a quarter of schools will close in the next 20 years. The sad part is how devastating it will be for small towns like the one in the piece where the college is the center of the community.

https://www.google.com/amp/s/www.cbsnews.com/amp/news/expert-predicts-25-percent-of-colleges-will-fail-in-the-next-20-years-2019-08-31/

From the story:
"At Green Mountain College this past year, we didn't have one full paid student," Allen said, adding, "Our published tuition was $36,500, and the average student paid just a little over $12,000."

Why didn't they publish tuition rates of $15 K with fewer scholarships? They would have made more per student and I bet they wpuld have been swamped at applicants. They could have even offered a $1K merit scholarship and still have come out ahead.

I agree. I can’t believe how many people don’t realize that at many privates the list price isn’t necessarily the price one should expect to pay. They do that because the full-pay shoppers are hard to give up, but the cost is many who won’t even consider applying.

I'm on the faculty of a mid-range University. The empirics don't support your claim. People would rather get a bigger scholarship than pay less tuition. People like to think their child is "special" and therefore getting a $15-$20K/year scholarship. It seems ridiculous, but that's what the data shows. Like anything, I think people would worry there was something wrong with a school that only cost $12K a year. I don't think they would be flooded with applications (if fact, I'm sure they wouldn't). Many people complain about the colleges, but the problem is also consumers. Consumers are obsessed with rankings so schools give scholarships to get kids with the highest stats they can regardless of financial need. Honestly, it's a messed up system and I wish something would change...

[Anonymous]

Colleges and universities can make significant reductions in expenses by modifying what and how they deliver education. They should cut so many of the A to Z majors and minors that don't offer gainful employment to their graduates. Many general Ed requirements of the first year or first two years can be delivered online/webinar style. They can bring the students to campus for short stints for intensive labs, group projects, tests, presentations, etc. (like they do for executive MBA programs, etc.) This will shrink the physical size, faculty and support staff, maintenance expense, etc. In short, they can operate on a much smaller annual budgets.

In fact, some colleges/universities can specialize in lab based majors and offer immersion type intensive short duration labs, say for two weeks. Other colleges could rent these facilities and faculty for their students. Throughout the academic year, such lab based colleges will be functioning offering their facilities for a set of colleges on reservation basis.

This model of education delivery will do away with college sports, athlete recruiting, large campus sizes, high fixed costs. It will significantly reduce per credit hour tuition, eliminate fee for so many non-academic expenses, total cost of obtaining an undergraduate degree. Also, this model will allow students to have flexible schedules with differing workloads to allow part-time jobs, study from home, etc. The colleges, instead of being physically pinned to a geographic location, will have wide reach to attract students who live in far away places.

This model will clearly be a disruptor of traditional higher education delivery model and will wipe out at least 2000 to 3000 of the existing colleges/universities. Make higher education more affordable and more accessible (even to people living in rural and sparsely populated areas), enhance education level of the population. It could increase the overall quality of education delivery. There is absolutely no reason why in this modern age colleges should still follow the education delivery model of centuries ago.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Did you see this piece on the news awhile ago? It predicts a quarter of schools will close in the next 20 years. The sad part is how devastating it will be for small towns like the one in the piece where the college is the center of the community.

https://www.google.com/amp/s/www.cbsnews.com/amp/news/expert-predicts-25-percent-of-colleges-will-fail-in-the-next-20-years-2019-08-31/

From the story:
"At Green Mountain College this past year, we didn't have one full paid student," Allen said, adding, "Our published tuition was $36,500, and the average student paid just a little over $12,000."

Why didn't they publish tuition rates of $15 K with fewer scholarships? They would have made more per student and I bet they wpuld have been swamped at applicants. They could have even offered a $1K merit scholarship and still have come out ahead.

I agree. I can’t believe how many people don’t realize that at many privates the list price isn’t necessarily the price one should expect to pay. They do that because the full-pay shoppers are hard to give up, but the cost is many who won’t even consider applying.

I'm on the faculty of a mid-range University. The empirics don't support your claim. People would rather get a bigger scholarship than pay less tuition. People like to think their child is "special" and therefore getting a $15-$20K/year scholarship. It seems ridiculous, but that's what the data shows. Like anything, I think people would worry there was something wrong with a school that only cost $12K a year. I don't think they would be flooded with applications (if fact, I'm sure they wouldn't). Many people complain about the colleges, but the problem is also consumers. Consumers are obsessed with rankings so schools give scholarships to get kids with the highest stats they can regardless of financial need. Honestly, it's a messed up system and I wish something would change...

Ah... the Veblen effect, named for Thorsten Veblen, the greatest economist ever. This bring us back to the first post of the thread. Veblen got his degree from Carleton, the bestest SLAC ever.

[Anonymous]

Anonymous wrote:The article also mentioned Bucknell didn't meet their enrollment target.

That surprised me. It seems like a competitive school at least to me. Oberlin is surprising as well. It is a known school. I hate saying this, but I wonder if the social justice outrage of several years ago turned people off to certain schools. I think people are willing to bite the bullet for schools like Harvard and Yale, but not for Oberlin?

[Anonymous]

Anonymous wrote:

Anonymous wrote:The article also mentioned Bucknell didn't meet their enrollment target.

That surprised me. It seems like a competitive school at least to me. Oberlin is surprising as well. It is a known school. I hate saying this, but I wonder if the social justice outrage of several years ago turned people off to certain schools. I think people are willing to bite the bullet for schools like Harvard and Yale, but not for Oberlin?

And yet Bucknell is not at all that kind of place. This is a yield miscalculation, nothing more.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I hadn't known Earlham was struggling and I quickly googled and in one of the campus articles on the departing president (after just one year) I found this quote:

"Earlham was facing pressure to enroll more students who could pay close to the full sticker price, while Price was known to feel strongly about the importance of continuing to further diversify the student body by attracting more first-generation and minority students, the faculty member said."

That pretty much sums it up. The issue isn't changes in demographic sizes (number of graduating seniors) but that the model of private higher education has become so increasingly reliant on finding enough full paying students to subsidize the other half of the student body at hefty discounts and the byproduct is that tuition shot up for full freight in order to pay for allthe bells and whistles, including financial aid for lower income students, which is now squeezing out the upper middle classes, and left the school trapped into a dangerous place. There's only so many full freight families and only so many of those would be interested in a place like Earlham.

Earlham isn't *really* struggling. They had a somewhat alarmist advisory board and some unsustainable financial practices. They need to make adjustments but they should be fine (Note: I have no connection to Earlham, just work in higher ed data field).

My friends son is there. Freshman class not close to full - they were still offering seats and discounts to students students in early August. Forty percent of incoming students are in double rooms with new roommates.

That will cascade. Faculty will not be replaced, maintenance will be deferred and so on. And this is after they invested a lot over the last decade to reposition and make their education more relevant to today’s workforce needs.

[Anonymous]

*NO roommates

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The article also mentioned Bucknell didn't meet their enrollment target.

That surprised me. It seems like a competitive school at least to me. Oberlin is surprising as well. It is a known school. I hate saying this, but I wonder if the social justice outrage of several years ago turned people off to certain schools. I think people are willing to bite the bullet for schools like Harvard and Yale, but not for Oberlin?

And yet Bucknell is not at all that kind of place. This is a yield miscalculation, nothing more.

No it’s d-bag school in the middle of nowhere that has hard time luring bros from the state school experience. Different vibe, same issue.

[Anonymous]

The issue is bloated tuition arising from bloated staff that don't teach. When that becomes unsustainable, which may be now, the remedy will be obvious.