Higher Education

Might some colleges manage themselves into extinction?

Without more efficient management, some colleges may not survive

NEWPORT BEACH, CA. – More colleges are facing a do-or die-moment: become more appealing to students and parents or face closure or a merger, scholars at a college finance conference here warned Friday.

It’s not just because of high tuition costs. How a college markets itself, the quality of its faculty, and the emotional connections forged with students once they’re enrolled are all vital to a college’s survival, they said.

“If I hear one more school say ‘we’re student-centered,’ small classes, et cetera, et cetera, I’m going to scream,” said Kent John Chabotar, a current political science professor and former president of Guilford College in Greensboro, North Carolina. “Yeah, they all are, exactly. So what else differentiates you from other schools students are considering?”

Chabotar, who also served as the financial chief at Bowdoin College in Maine for 10 years, emphasized that some colleges and universities are now at risk of either closing their doors or merging with other institutions. Especially threatened are those with rural locations, low enrollment, a small endowment or an overreliance on tuition for revenue.

Chabotar spoke on a panel with Neil Theobald, the president of Temple University, at the conference, hosted by the University of Southern California’s Rossier School of Education.

In the past 30 years, net tuition at private colleges has increased 220%, rising nearly twice as fast as the average cost of living, he noted, while household income has gone up 150% in that time. At public colleges and universities, average tuition rose roughly $2,100, or nearly a third, between 2008 and 2015.

And even though a large gap exists between the sticker price of a school and how much students actually pay after accounting for student aid, Chabotar said that half of all prospective students rule out colleges based on their sticker prices alone.

Related: As times get tough, colleges turn to nonacademics to lead

Perceptions matter, some scholars say. In the near future, a larger share of college students will hail from households that are poorer and have parents who didn’t earn a college degree. Without adults and peers who understand the college admissions hustle, more students will rely on information that can be misleading, like the sticker price.

“The vast majority of students and their parents do not do that much homework” to research colleges, said Don Hossler, a senior scholar at USC’s Center for Enrollment Research, Policy and Practice. “I’ve done a lot, a lot of work on this, and the vast majority of students don’t use that much information.”

Still, “the statistics are pretty clear, that if you are 18 years old, you should be planning on pursuing” a college degree, said Theobald, the president of Temple University in Philadelphia, a public institution with 29,000 undergraduates, nearly 40 percent of whom receive Pell grants – federal aid for low- and moderate-income students.

“Yet, in my interactions with students and with parents, they do not find this argument terribly convincing,” he said. “The world in which they live, all of these predictions of what might happen, just doesn’t resonate with them. Maybe that’s because they had the pins knocked from under them during the great recession.”

To attract more lower-income students and parry the cost fears of families, Temple has rolled out a series of reforms that may serve as a roadmap for other institutions.

For example, Theobald said, the school went against the grain by bringing on more tenure-track professors, who tend to earn higher salaries than part-time or adjunct instructors. Since 2012, Temple has hired 200 new tenured or tenure-tracked professors, he said.

That move aligns with one of Chabotar’s arguments, that “cost is not the top factor” in how students determine which school to choose, “the academic program is.”

Temple also started Fly in 4, a program that promises students that if they meet the obligations of their course guide and cannot graduate in four years “due to the unavailability of necessary courses,” the university will pay for the remaining courses needed to earn a degree.

This year, the university has some 620 more sophomores on track to graduate than it did last year, said Theobald. If all those students graduate in four years, he added, they’ll cumulatively save themselves $20 million in the cost of attendance.

Related: Finance expert tells colleges: Take a fine-toothed comb to your budgets

The program also barters with students who would otherwise work full-time in addition to their studies. If students pledge to work no more than 15 hours a week, Temple promises to reimburse them for the additional hours they could have worked. Research shows students who work more than 15 hours a week are less likely to graduate.

Theobald found pockets of spending that could be shifted to academics, like eliminating five varsity sports teams, removing duplicative services in the administration and leaning on technology to replace some workers.

Trimming college expenses can be made easier, said Chabotar, if college presidents are more transparent about finances. At Bowdoin and at Guilford, he said, he taught courses on college finances that included students and faculty. Each week he’d present a case study of a school and ask the class to develop cost-saving solutions. The final week, he’d lay out the financial situation at their own school.

“I figured they’d all run to the tall grass,” he said. “But they didn’t. They sat there and dealt with our problems really realistically, because they had the data and they had the context.”

This story was produced by The Hechinger Report, nonprofit, independent news organization focused on inequality and innovation in education. Read more about Higher Education.

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Mikhail Zinshteyn

Mikhail Zinshteyn contributes regularly to The Atlantic. His writing about education has also appeared in FiveThirtyEight, The National Journal, CityLab and other outlets. Born in… See Archive