Ricardo Azziz has held quite a few government positions in increased training and led the merger that resulted in Georgia Regents College, now Augusta College. He’s principal at Strategic Partnerships in Greater Training Consulting Group.
He writes the common Merger Watch opinion sequence on company restructuring in increased training.
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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 dangerous information? Enrollment in U.S. increased training establishments continues to drop.
No surprise a current S&P International Rankings outlook on increased ed is bearish on the business, 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 usually will get misplaced within the hand-wringing accompanying enrollment and monetary experiences? Measurement issues.
Analyzing enrollment traits from fall 2012 to fall 2020 for establishments that obtain federal monetary support, increased training misplaced some 1.7 million college students, or 8.4% of whole enrollment. Faculties 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 most important faculties elevated their share of scholars
% change in whole scholar enrollment by school measurement, fall 2012-2020
Alternatively, colleges with greater than 30,000 college students truly grew their enrollment by 19%, including some 760,000 to their rosters, collectively. Per this evaluation, a current report from the City Institute noticed that between 2000 and 2018, the 50 U.S. public flagships, taken as a complete, elevated their whole scholar enrollment by 24%.
Just a few details are apparent from this evaluation. First, the connection between enrollment change and institutional measurement (whole enrollment) just isn’t linear. The very small school with fewer than 1,000 college students is an particularly endangered species. In the meantime the common bigger faculty, 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 most important establishments, with enrollments exceeding 30,0000 college students, did effectively regardless of the hostile setting. Third, prior to now 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 training diploma or as a result of they had been absorbed by the rising 100 or so largest colleges. It’s a lack of college students at smaller faculties that’s equal to the whole 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 flexibility to leverage progressive — and newsworthy — scholarship and discovery. This branding and nationwide recognition drives scholar 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 growing from about 25% in 2001 to 37% in 2018. Actually, the flagships that grew probably the most throughout this era additionally noticed the best declines of their share of in-state college students.
Better recognition is commonly pushed by elevated selectivity – as all of us need to belong to these golf equipment which might be exhausting to get into. Actually, between fall 2021 and fall 2022 enrollment declines had been concentrated within the least selective faculties, with solely extremely selective colleges seeing undergraduate enrollment good points. Within the information I examined, colleges with scholar 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 potential to unfold administrative and overhead prices throughout a broad scholar base. Doing so frees assets that may be directed to creating strong 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 develop their instructing capability with solely marginal added prices, whereas offering a better number of applications and services than smaller establishments. Smaller colleges with bigger endowments and assets additionally fare effectively. Because the current S&P report reminds us, sturdy establishments that already take pleasure in good credit score scores ought to anticipate continued excessive scholar demand and suppleness setting costs, whereas weaker establishments will face bills which might be prone to develop sooner than their income.
Measurement is clearly not the one issue that can decide the expansion, and perhaps the survival, of establishments of upper training. Nonetheless, it is among the essential defining components.
There are few good avenues for rising the dimensions of an establishment in a fast method. Mergers, acquisitions and the odd partnership are some notable ways value contemplating. Greater training leaders have to maintain this in thoughts — together with the velocity with which the exterior setting is altering.
