M.I.T. Considers Increase in Student Body by 300–and Swears It's Not About Revenue

During rough economic times, it’s hard to get at the reasons college make policy changes. According to Jacques Steinberg in today’s New York Times, M.I.T. is considering an increase in the size of its student body.

On its face, this is simply a move to return the campus to the size it was back in the 1980s and 1990s, when 4,500 students roamed the Cambridge campus.  But with a policy change back then that required all freshmen to live in dormitories, the campus enrollment fell to about 4,200.  So the move seems like an attempt to return the campus to its traditional, historic size.

The Dean of Admission, Stewart Schmill, denies that the move to increase the student body has anything to do with revenue targets.  He pointed out that new dormitories will need to be built (which generally pay for themselves quite nicely, as the rents are guaranteed). He also pointed out that the move to expand enrollment may not happen in one fell swoop.  Plus, M.I.T. practices “need blind” admissions, so more financial aid will have to be allocated to the 300 new students.

I’m skeptical, frankly.  The fact is that many universities, especially large, research-oriented universities, have budgets that depend on a healthy revenue stream from undergraduate admissions.  It’s simply a numbers game–a sort of revenue pyramid.  In order to pay for expensive graduate programs, universities need plenty of undergrads to provide the bedrock financial foundation to support them.  Undergrad course sizes can be bigger so that graduate courses can be smaller.

So when a major institution of any type makes a decision to expand–or contract–and swears that the motivation has nothing to do with economics–well, I’m just a teensy bit cynical.

Here’s my logic.  Colleges are businesses.  Businesses make decisions based not on nostalgia, but on the financial interests of the business.  Ergo….

Whatever the truth, we’ll likely never know much more than what Schmill told Steinberg.  A private university like M.I.T. can keep its finances private.  So we’ll just take Schmill at his word.  Nostalgia for those halcyon days of 4,500!  Oh, how we miss those vital 300 students, who made our campus so much more vibrant and fun.  Ah, me….

Mark Montgomery
Educational Consultant

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The Numbers Are In!

Inside Higher ED published a story earlier this week on a survey that was released by the National Association for College Admission Counseling (NACAC).  According to the survey, 90 percent of colleges saw an increase in financial aid applications this year.  While this number is not that surprising given the state of economy, some of the other numbers published do raise some eyebrows.  It is no secret that colleges were worried about enrollment decreases this fall due to “summer melt” (students who deposit, then decide to attend another institution over the summer) and no shows.  However, the numbers were not that staggering after all.  Another interesting note is that enrollment appears to be up for both public and private institutions.  So, what does this mean for the class of 2010?  Well, according to the article, several college officials reported that they plan to continue to use strategies such as offering admission to more applicants and increasing the amount of financial aid.    Don’t get too excited though. Even if a college increases the number of students they admit, they still probably won’t stray too far from their typical admitted student profile. Also, since increasing the number of admitted students and financial aid do not seem to be long-term strategies, it will be interesting to see what lies ahead for future college applicants.
Katherine Price
Educational Consultant
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Top Colleges See Little Fall in Freshman Commitments

Jacques Steinberg of the New York Times reports today that Top Colleges See Little Fall in Freshman Commitments.

Unsurprisingly, students offered admission to Harvard, Yale, Princeton, and Pomona are accepting those offers at more or less the same rates as in years past. All of these schools have increased their financial aid budgets this year over last to ensure that yields stay constant.

But as Steinberg admits, only a small fraction of colleges have reported yield rates, and many colleges (including the likes of Georgetown) still have room in their freshman classes. The effects of the economic meltdown on college enrollments still remain to be seen, and we’re several weeks from having a full understanding of how the economy will affect both college budgets and the experience of the students who do matriculate.

Stay tuned.

Mark Montgomery
Independent College Consultant


May 11 UPDATE:  According to an article in today’s issue of The Dartmouth, Dartmouth College’s yield was 2% lower than last year, forcing the admissions office to pull 50-60 students off the wait list. This is not a huge decline, and probably something that would have made the news, were it not for the kooky economic situation.

Community College Enrollments Continue to Climb

Yesterday I wrote about some research about average salaries of community college graduates, and I commented (negatively) on the researcher’s conclusions that students ought to think twice about attending community college.

It seems that hordes of students are ignoring this researcher’s advice.

According to Inside Higher Ed, a nationwide survey of 120 community colleges indicates that enrollments are way up at two-year colleges.

While a quarter of respondents are seeing modest enrollment increases of between 1 and 4% this year over last, 28% of respondents report an increase in headcount of 10% or more.

Also, 16% of respondents report an increase in full-time enrollments of 10% or greater.

Regardless of statistical averages about salaries and lifetime earnings, students and their families are making decisions based on economic realities.

Now let’s just hope that public policy and academic research keeps up with what is happening on the ground.

Mark Montgomery
Educational Consultant

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Colleges Worry About Declining Enrollments, But You Should Sense Opportunity Amid the Turmoil

Today’s New York Times includes an article about worried admissions officers across the land, especially at private colleges, who are noticing steep declines in the numbers of applications.  Conventional wisdom has it that the financial aid picture is so bad that students dare not dream of attending a private school for fear of being unable to afford it.
While it is true that some of the credit options for parents are a bit sketchy, college still have plenty of financial aid to give away–and perhaps fewer applicants to whom to give it.
What does this mean for you?  Well, it means that if you have played your cards right by applying to colleges that are both good fits for you and also likely to accept you, it’s altogether possible that your aid package may be sweetened as an incentive fo you to attend.
If admissions officers sense that they will have a hard time attracting good students, they may rejigger their aid offers in order to ensure that the size of their class does not decline.
It’s also possible that we will see a lot of movement on waiting lists this year, as colleges move to fill their classes in May.  This will primarily benefit students who are able to pay and who are not seeking large financial aid packages.
The students I really worry about are the ones who have applied to state colleges in the belief that this is the only place can afford.  Not only will classes be super-crowded at state colleges in the fall, but some will not be accepted.  And as state funding dries up, some public colleges are capping enrollment.  Some may actually accept fewer students in the past, leaving students who thought of their state college as a “safety” school are left hanging.
While it’s impossible to forecast all the craziness that this admissions season will bring, it’s important that students and their parents not lose their senses.  Good planning and a good strategy for admissions and financial aid will leave many folks with a variety of good options to choose from once those admissions letters come out in early April.
Mark Montgomery
College Counselor

Falling Stock Markets and College Budgets: Mergers & Bankruptcies on the Horizon?

Forbes posted an article on October 22, foretelling hard times in the country’s higher education industry.  With falling stockmarkets, declining endowments, and some colleges having loaded up with debt in the past decade or so, the article predicts that some colleges may be swallowed up by financially stronger competitors, or will at the very least face some very tough financial difficulties in the next few years.


The evidence is a September 2008 study by the National Association of Independent Colleges and Universities, in which one-third of the 504 member institutions surveyed indicated that the credit crunch had hurt enrollment.  About 20%  of respondents said they had fewer returning students than expected, and roughly the same number said they had a smaller incoming freshman class than expected.


Clearly the credit crunch is hurting individual families, and economic logic would have it that these individual decisions will have an impact on the higher education industry, as demand falls for high-priced tuition at private colleges and universities. I’ll have more thoughts on that story later this week.


As demand falls, some colleges that were not as conservative with their investments and did not leverage their future in favor of immediate gratification may begin to feel the financial pinch.  Moody’s is watching college budgets and investments carefully, and according to an article in the Chronicle of Higher Education, three colleges are on a “watch list” to have their bond ratings downgraded. The colleges in question are Simmons College, Franklin Pierce University, and Suffolk University.


Many other colleges will feel some pain.  But, as I said in an earlier post, most colleges have acted more like the pecunious ant than the spendthrift grasshopper.  The report from Moody’s bears this out, as seen from this quotation from the Chronicle article:

In its report, Moody’s said that the “overwhelming majority” of colleges have dealt with the freeze with “only minor budgetary or liquidity adjustments.” It attributed colleges’ general resilience to their conservative management strategies, their access to lines of credit and quasi-endowment funds, and their holding of fixed-rate debt.

 

So I’m not betting that many colleges will go belly up or that we’ll see a bunch of college mergers.  Maybe a few exceptional cases will make the headlines, but the vast majority will weather the storm.  It won’t necessarily be a leisurely cruise; but most boats won’t sink–even as the hurricane roars overhead.


Mark Montgomery
College Counselor











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