Higher Ed Watch

With the economy stuck in neutral, tuition prices and student loan debt skyrocketing, and parents and students increasingly questioning the value of a college degree, our public institutions urgently need a different approach to the challenge or educating an increasingly diverse mix of students at a reasonable cost. Today, New America's Education Policy Program released The Next Generation University, a policy report about the future of public higher education. The report comes at a time when too many public universities are failing to respond to the nation's higher education crisis. Rather than expanding enrollment and focusing limited dollars on the neediest of students, many institutions are instead restricting enrollments and encouraging the use of student-aid dollars on merit awards. But, according to the report, some schools are breaking the mold by boldly restructuring operating costs and creating clear, accelerated pathways for students.

The report focuses on six public research universities: Arizona State University, University at Buffalo, University of California at Riverside, University of Central Florida, Georgia State University, and the University of Texas at Arlington. These universities are continuing their commitment to world class research while increasing enrollment and graduation rates, even as the investments from their states have declined. 

The report includes case studies on each of the six universities, which were selected after an analysis of federal education data, site visits, and interviews. Based on similarities in their approaches to reform, the report's recommendations include:  

At the Institutional Level

1. Increase size to ensure broad access, test new ideas from pedagogy to student services, and serve growing populations.
2. Create direct connections between two- and four-year colleges to ease access for transfer students.

At the State Level

1. Guarantee a low net-price for low-income students.
2. Adopt performance-based funding.
3. Create transfer policies that encourage completion.
4. Ensure students in the K-12 pipeline are prepared.

At the National Level

1. Develop Next Generation Leaders for Next Generation Universities.
2. Acknowledge that external recognition remains important in higher education, and provide recognition for increasing access and student success.
3. Create a demonstration program that challenges four-year public higher education institutions to innovate.

These recommendation and lessons will be featured at an event held at the New America Foundation from 10am to 3pm. You can learn more about the event and watch a livestream here. Follow the conversation on twitter using #NextGenU.

Download the full report here.

In addition to the report, New America has released two related issue briefs:

In "Technology and the Next Generation University," New America's Rachel Fishman explores the barriers to technology-enhanced education and presents promising practices Next Generation Universities employ to overcome them.

In "Formation of the Next Generation University: Role of State and System Policy," HCM Strategists' Iris Palmer, Kristin Conklin, and Nate Johnson explore how transfer policy, financial aid, net price, performance funding and the K-12 pipeline affect Next Generation Universities within their state context. It makes recommendations for state and higher-education system policymakers on how to ensure public institutions are meeting the needs of the state.

HCM Strategists, in conjunction with the release of The Next Generation University has developed a new interactive tool:

Next Generation Universities: Select Dimensions of Research University Output, Productivity and Efficiency 2006-2011

This dashboard, created by HCM Strategists and Postsecondary Analytics, includes a selection of measures of public research university performance through the great recession, showing how they have fared over time and in comparison to the sector as a whole. It helps illustrate the very different ways research universities have experienced and responded to the challenges of the last several years, and which institutions have been able to sustain or grow the number of students served in spite of the financial challenges they faced.

Please note that the dashboard is a large file (2.5 mb) and may take up to a minute to load. It requires Adobe Flash, which is already installed in most browsers.

Also released at the event are two conference papers from the Edunomics Lab at Georgetown University: 1) More Students, More Degrees, More Dollars: How Universities Can Close Budget Gaps while Benefiting Students; and 2) The High Price of Excess Credits: How New Approaches Could Help Students and Schools.

[Last week the New America Foundation's Education Policy Program released "Undermining Pell: How Colleges Compete for Wealthy Students and Leave the Low-Income Behind," a report that presents a new analysis of little-examined U.S. Department of Education data showing the "net price" – the amount students pay after all grant aid has been exhausted – for low-income students at individual colleges. This is the fourth in a series of posts related to the report's findings. Read earlier parts of the series here, here, and here.]

As Higher Ed Watch reported this week, only a small number of private colleges are using their financial aid resources to make college more accessible and affordable for the neediest students. Instead, most are charging students with family incomes of $30,000 or less a net price exceeding $10,000.

The news is much better in the public higher education sector. Two-thirds of public four-year colleges continue to enroll a substantial share of low-income students and charge them a manageable net price.

However, the data also raise some major red flags. As more and more states divest from their higher education systems, public universities are increasingly adopting the enrollment tactics of their private college counterparts — using their institutional aid strategically, for instance, to compete for “the best and brightest” students and to increase their revenue. In a number of states, the growing privatization of public higher education systems is threatening to shut down what has long been a pathway to the middle class for low-income and working-class students.

Of 480 public four-year colleges examined in Undermining Pell, 164, or 34 percent, charge the lowest-income students a net price over $10,000; and 22, or 5 percent, require these students to come up with $15,000 or more.

Embracing Enrollment Management at the U. of Alabama

Many of the 164 public institutions are active participants in the institutional financial aid arms race. But few have embraced the competition with as much gusto as the University of Alabama.

It wasn’t always so. By the late 1990s, the University of Alabama’s admissions office had become complacent, according to a paper that several school officials wrote on the subject for the American Association of Collegiate Registrars and Admissions Officers (AACRAO) in 2010. While the admissions staff did some recruiting, the staff generally expected students to be interested in the school because of its long history and status as a flagship university. Heading into the new century, the university, which marketed itself mainly on its athletic programs and social traditions, was having trouble attracting top students.

Enter Robert E. Witt, the former business school dean at the University of Texas at Austin and president of the University of Texas at Arlington. Upon taking the presidency of the University of Alabama in 2003, he laid down a challenge to the admissions office: to “recruit top student scholars with the same fervor as top athletic prospects, and look beyond the state’s borders to find them.” The admissions staff, which was also charged with expanding the school’s enrollment from 19,000 to 28,000 over a 10-year period, met the challenge head on. According to the AACRAO paper:

The president’s message spread rapidly; with a clear and universally shared vision, a team mentality developed among the major players in enrollment management. The pervasive attitude became one of considerable pride and ambition. And because the vision became so pervasive throughout the institution, enrollment management targets were reached ahead of schedule.

To carry out its mission, the university set up full-time regional recruiters in several nearby states, including Florida, Georgia, Tennessee, and Texas. And the school put its money where its mouth was — establishing automatic scholarships for both in-state and out-of-state students who achieve high standardized test scores and good grades.

For example, at the University of Alabama, out-of state students with 1400 to 1600 SAT scores in critical reading and math who have earned a cumulative grade point average of at least a 3.5 are automatically eligible for a full-tuition scholarship for four years. Those with slightly lower test scores are eligible for scholarships covering up to two-thirds of their tuition. Meanwhile, the school goes all out for National Merit Scholars, covering their full tuition for four years as well as providing them with a reduced rate on campus housing, an additional $1,000 scholarship each year for four years, a onetime $2,000 stipend for summer research or international study, and a free iPad.

Seeking "Full-Pay" Students

But the University of Alabama is not just targeting high-achieving students. As Matthew Quirk of The Atlantic wrote in 2005 on enrollment management, the school is working hard to reel in those who can pay full freight as well:

At the AACRAO conference two members of the University of Alabama’s enrollment management team demonstrated how, in their campaign for out-of-state prospects, they overlaid income data from the U.S. Census on maps of high schools in Texas to target wealthy students.

Overall, nearly 30 percent of University of Alabama freshmen receive merit scholarships, averaging about $9,000 each. The university’s effort appears to have paid off — as it has seen its U.S. News ranking surge in recent years. Considered a second-tier institution in the late 1990s, the school now ranks 77th among all national universities and 32nd among public universities.

But with all the money the University of Alabama spends recruiting the best and the brightest and the wealthiest, the university appears to have little left over for those with the greatest financial need. While Pell Grant recipients make up 23 percent of the school’s student body, the lowest-income students pay an average net price of $13,815 — 37^th highest among all of the public colleges examined.

As the University of Alabama shows, private colleges are not the only ones preoccupied with prestige and rankings. Public college leaders are also driven to move up the pecking order, and they too have found that the most expedient way to achieve this goal is to chase after top students.

Looking for the Big Bucks

The use of strategic enrollment management by public colleges is not just being driven by the quest for prestige. Schools are also using these techniques to try to increase their revenue in the face of large-scale state budget cuts.

Such is the case at the University of Nevada at Reno, which has sustained major reductions in state funding in recent years. In an interview with the university’s alumni magazine, the school’s president, Marc Johnson, said the institution was pursuing an “enrollment management strategy so that we can purposely grow our student body, especially among students who will have a high probability of graduating.” By doing this, he said, “we’ll grow, make more revenue, and add back more faculty and staff positions and still increase our graduation rates.”

The key to the strategy is to attract full-pay students. But university financial aid officials acknowledge that “affluent students (and their parents) expect to be rewarded with academic merit aid.” As a result, “the university has set up a new scholarship award process” that “permits the university to remain competitive in that expectation.”

Under the process, students are automatically considered for a merit scholarship upon admission to the university. The size of the award that students receive depends on their academic record. University officials fully recognize that the shift away from need-based aid has been harmful to low-income students, but they don’t see any way around it.

These policies have certainly taken a toll. While 34 percent of freshmen at the school received merit awards in 2010-11, averaging $2,917 each, the lowest-income students paid an average net price of $11,230.

As these cases show, state disinvestment and institutional status seeking are working together, hand-in-hand, to encourage public universities to follow the lead of their private college competitors – to the detriment of low-income and working class students alike.

[Last week the New America Foundation's Education Policy Program released "Undermining Pell: How Colleges Compete for Wealthy Students and Leave the Low-Income Behind," a report that presents a new analysis of little-examined U.S. Department of Education data showing the "net price" – the amount students pay after all grant aid has been exhausted – for low-income students at individual colleges. This is the third in a series of posts related to the report's findings. Read earlier parts of the series here and here.]

Some private nonprofit colleges are making extraordinary efforts to recruit, enroll, and financially assist low-income students. Unfortunately, they are few and far between. Only 53 private colleges, or 11 percent of the schools examined in Undermining Pell charged students with family incomes of $30,000 or less an average net price under $10,000 in the 2010-11 school year. In contrast, nearly two thirds of the private institutions analyzed charged the lowest income an average net price of over $15,000 a year.

Certainly, a substantial number of private colleges have small endowments, making it extremely difficult for them to provide adequate support to those students with the greatest need. Indeed, many of these schools provide deep discounts because they believe they must do so as a matter of survival.

However, there are plenty of private colleges that have the means to enroll a substantial share of Pell Grant recipients and charge them a low price but choose not to do so. These include some fairly prosperous colleges that use their institutional aid as a competitive weapon to attract the students they desire, rather than to meet the financial need of their students.

Many of these colleges follow the same playbook: using so-called merit aid to bring in students that will help them build their prestige and propel themselves up the rankings. And while a number of these generally second-tier schools strive to compete with the most-elite institutions for top students, their endowments, while substantial, tend to pale in comparison. As a result, these colleges often have to rely heavily on tuition dollars to finance their operations, giving them a significant incentive to use their institutional aid to attract full-pay students as well. Meanwhile low-income students who enroll in these schools are generally left with a hefty gap between what the government says they should be expected to pay and what they are being charged.

A Change of Direction at GW

One such “striving” school is George Washington University (GW). For most of its history, the university was a commuter school that primarily served a diverse group of working adults seeking credentials that would help them advance in their careers.

That all changed in 1988 with the arrival of the university’s new president, Stephen Joel Trachtenberg. The former president of the University of Hartford immediately set an ambitious course for the institution: to be the destination of choice for students who didn’t make the cut at the nation’s most selective colleges.To accomplish this, Trachtenberg knew that he would have to make the school much more appealing to an upscale crowd.

Over 19 years, he turned what was a relatively low-cost institution into one of the most expensive colleges in the country and went on a building spree to provide the kind of amenities that wealthier students crave, such as state-of-the-art dormitories and a fancy new student union that won the American Institute of Architects’ highest award. And Trachtenberg opened up the university’s financial aid coffers for the sole purpose of “buying talent,” as he himself has acknowledged. According to a recent profile of the former GW president in The Atlantic, Trachtenberg operated under the philosophy “that students were more interested in attending a $40,000 school with a $20,000 discount than they were in attending a $20,000 school.”

Since Trachtenberg’s retirement in 2007, the university’s leadership has scaled back a bit (there are now nearly two dozen colleges that are higher-priced than GW, after all). But the school remains among the 30 least socioeconomically diverse private colleges in the nation. While 20 percent of GW freshmen receive merit aid, averaging about $18,500 each, only 13 percent of its students receive Pell Grants. GW’s lowest-income students pay an average net price of nearly $15,000, and student loan borrowers at the school graduate with an average debt of about $33,000.

Rising Up the Ranks at Miami

Another school that has had a remarkable rise up the ranks over the past several decades is the University of Miami, which pioneered many of the enrollment management practices that have become commonplace today.

In the late 1980s, the fortunes of the 60-year-old school were flagging. Most people outside the state had not heard of it, or thought of it as a party school that excelled only in college football.Many mistakenly believed it was a giant state school. At the time, the school was admitting about three-quarters of the students who applied.

What was needed, university officials decided, was to bring together all of the separate offices involved in enrollment to make a concerted effort to ramp up the marketing of the school and to do all they could “to improve student quality while maximizing tuition revenue.” This involved recruiting high-achieving students and rewarding them with generous scholarships. It also meant copying the trappings of more-prestigious institutions. “To be considered a top private university, the University of Miami needed to act more like a highly selective private college,” Paul M. Orehovec, the school’s former vice president of enrollment management, wrote in a history he has compiled of the university’s efforts in this area. For example, the school introduced a wait list to make it appear more exclusive than it was, and started a legacy program to give the children of alumni a leg up in the admissions process.

These efforts bore fruit as the University of Miami started to rise through the ranks. But this process accelerated considerably after Donna Shalala, the former Secretary of Health and Human Services, came on board in 2001. Under her leadership, the university became much more aggressive in recruiting top students.

The school, for example, started inviting several hundred prospective students to the campus each spring to compete for the new Isaac Bashevis Singer Scholarships — which cover four years of full tuition, totaling more than $150,000 for those who demonstrate “superior academic achievement and abilities for success.”This “one-of-a-kind weekend” gives these students the chance to “get firsthand information about life as a high-achieving student at the University of Miami.” All they have to do is have a meeting with a faculty member and try to convince that professor they are deserving of the school’s most “prestigious merit award.”

In 2011, the university awarded 67 Singer scholarships. But those who missed out had no need to worry, as they still had a very good shot at winning one of the school’s other merit awards. Overall, around a quarter of University of Miami freshmen receive non-need-based aid, averaging about $23,000 per student.

By the standards that colleges use to judge their performance these days, Shalala’s efforts have paid off big time. The University of Miami has catapulted up the U.S. News rankings — breaking the top 50 for the first time in 2009 — making it a top-tier university in the magazine’s estimation. The average SAT scores of incoming freshmen have risen over 100 points, to nearly 1300. And the university now admits fewer than two out of every five students that apply.

But not everyone has benefited from the University of Miami’s generous merit aid policies. While Pell Grant recipients make up 22 percent of the school’s student body, the school’s lowest-income students pay a hefty average net price of $21,415.

Besides the very richest colleges and some exceptional schools, nearly all private colleges provide generous amounts of merit aid, often to the detriment of the low-income students they enroll. But private colleges are not the only ones preoccupied with prestige and rankings. Public college leaders are also driven to move up the pecking order, and they too have found that the most expedient way to achieve this goal is to chase after the top -- and wealthiest -- students as well. Stay tuned to see how the merit aid game is being playing out at our country’s public universities.

[Yesterday the New America Foundation's Education Policy Program released "Undermining Pell: How Colleges Compete for Wealthy Students and Leave the Low-Income Behind," a report that presents a new analysis of little-examined U.S. Department of Education data showing the "net price" – the amount students pay after all grant aid has been exhausted – for low-income students at individual colleges. This is the second in a series of posts related to the report's findings. Read the first part of the series here.]

Until recently, it has been very difficult to assess how well individual colleges are serving low-income students. Policymakers, researchers, and journalists have mostly had to rely on a single measure to do so: the proportion of Pell Grant recipients each college enrolls.

While this dataset provides a useful tool for comparing colleges based on their record of admitting low-income students, it does not tell us anything about the schools’ commitment to making college affordable for these individuals. For example, if a college enrolls a large number of Pell Grant recipients but doesn’t come close to meeting their remaining financial need, it may be setting them up for failure.