If you thought last fall’s staggering endowment drops were the end of collegiate financial troubles, you haven’t been paying attention. Another minefield awaited – application season. It wasn’t simply colleges that were feeling a pinch, so were their future customers. After decades of tuition increases that failed to dent application numbers, colleges were suddenly forced to contemplate declining enrollment as parents wondered whether $40,000-a-year for only-average colleges was really worth it. So profilgate universities would lose students to thriftier (and cheaper) peers? Well, partically. The issue is complicated – take a look at the developments that lead up to this application cycle. .
A number of elite institutions, in the last two years, have undertaken significant expansions of already-generous financial aid for lower and middle income students that have not been scaled back, and in fact loom even more attractive for a certain demographic of less-affluent applicant, for whom elite colleges are in fact likely to be cheaper than all but the most affordable public institutions.
One casualty of declining endowments has been a scaling back of financial aid at some colleges, or the tacit statement that the ability to pay full tuition can increase an applicant’s chances. This no doubt influenced some choices – improved chances of admission in paying for a full-ride? Bowdoin, a “need-blind” institution, has expanded its class by 50 over the next five years – slots imagined for transfer and foreign students – who do not receive “need blind” consideration. As Robert Sevier, an enrollment consultant, told the New York Times, “If you are a student of means or ability, or both, there has never been a better year.”
If you thought last fall’s staggering endowment drops were the end of collegiate financial troubles, you haven’t been paying attention. Another minefield awaited – application season. It wasn’t simply colleges that were feeling a pinch, so were their future customers. After decades of tuition increases that failed to dent application numbers, colleges were suddenly forced to contemplate declining enrollment. On one level this might prove a question of profligate universities losing students to thriftier (and cheaper) peers, but the issue is far more complicated. Take a look at developments leading up to this application cycle.
A number of elite institutions, in the last two years, have undertaken significant expansions of already-generous financial aid for lower and middle income students that have not been scaled back, and in fact loom even more attractive for a certain demographic of less-affluent applicant, for whom elite colleges are in fact likely to be cheaper than all but the most affordable public institutions.
One casualty of declining endowments has been a scaling back of financial aid at some colleges, or the tacit statement that the ability to pay full tuition can increase an applicant’s chances. This no doubt influenced some choices – improved chances of admission in paying for a full-ride? Bowdoin, a “need-blind” institution, has expanded its class by 50 over the next five years – slots imagined for transfer and foreign students – who do not receive “need blind” consideration. As Robert Sevier, an enrollment consultant, said to the New York Times, “If you are a student of means or ability, or both, there has never been a better year.”
State colleges braced themselves for significant application increases. This might seem a boon but many considered the likely consequences warily. The recession saw state budgets for public colleges slashed. The average in-state, heavily subsidized student became – however much colleges would like to avoid the point – a liability. CUNY has expressed a concern that without additional state and city aid it might soon reach an enrollment cap. Many state colleges began eagerly seeking out-of-state applicants, and the tuition rates they’d pay – up to double in-state rates. This has engendered its own opposition – a Virginia state delegate has introduced a bill to cap rising out-of-state attendance at state schools, on the grounds that these spots should be reserved for in-state residents. The money needs to come from somewhere though – and when states are proving tight with education funds, out-of-state students are a financial boon. Remember, if a student of means, this is a good year. The trouble remains that many former “students of means” find themselves in worsened circumstances.
How has this all sorted out?
Elite colleges, unsurprisingly, found their applications unaffected or even increased admist the downturn. All Ivy League schools save for the University of Pennsylvania saw increases in applications, with Brown’s application rate rising around a striking 20%. An increased number of these students are receiving financial aid. At Harvard, 65% seem likely to receive aid, compared to 58% in the current class. At Dartmouth, 50% of the incoming class will receive aid, compared with 47% of the current student body.
Most public colleges have yielded considerable admissions increases. Public schools from Idaho State to SUNY Binghamton are seeing record application numbers. Oregon State University saw a 12% increase in applicants. Connecticut State University applications were up by 10%. Almost all state university systems saw increases at least along of the level of the University of California, where applications rose 2.9%.
Applications rising everywhere? Not quite. The brunt of the economic crisis is being borne in the broad middle sector of higher education, by hundreds of less-renowned private colleges. While prestigious universities and cheap public universities saw application jumps, most other colleges saw declines.
Even top-ranked liberal arts colleges from the U.S. News and World Report list saw application drops: 20% at Williams, 12% at Middlebury, 10% at Swarthmore, 3.5% at Carleton.
The reasons for these plunges seem varied. Middlebury, for one, decreased aid for lower and middle-income applicants, likely deterring potential applicants from that demographic. By contrast, Williams College, which has stood by recent aid increases (and is one of few U.S. colleges to offer need-blind applications to foreign students) appears to have lost more affluent applicants in its 20% decline (with tuition well over 40,000, not a surprise). The new class features the highest-ever proportion receiving financial aid, one, according to Connie Sheehy, Associate Director of Admissions, that’s “a little bit more than 50%.” The process isn’t cheap. “It’s a sacrifice for the college” Sheehy observed. “There are a lot of things we’re cutting back on, but not that.” With an endowment of 1.3 billion, Williams has the means for generosity. What of colleges without this room for maneuver?
At the countless colleges where tuition provides a majority of the operating budget, and small endowments offer little cushion, the number of students enrolled and the tuition rates they’re paying have proven a central concern. Numerous private colleges have seen not only their application rate but also their “yield” rate (the percentage of students accepted who actually enroll) fall. Those who’ve kept their yield rates high are almost invariably paying increased financial aid in order to accomplish it. Early this month, at a point when most matriculating classes are full, schools from Georgetown to Princeton still had empty spots.
While an unusually high number of private colleges (9 compared to a typical 4) closed last year, most of these cases are far from dire as of yet. The current application cycle has seen widespread but modest drops in attendance. The years ahead will stand as the real test; it’s one thing to cope with a year of declining admissions and tuition proceeds, another to adapt to years of reduced revenue.
In many ways, however, these seem very just targets for market retribution. Pell-mell expansion is one thing at colleges that can weather application and endowment drops without blinking an eye (or cutting an aid package) – it’s quite another at colleges reliant upon the tuition of actual students for expansion – enrollment, we now see, is no more certain to rise than housing prices. Will colleges heed this lesson? We hope so.
