Monday, December 09, 2013

 

If You Were a President...



Ry Rivard has been on a roll lately.  If you haven’t seen his latest at IHE, check it out.  It’s about the increasingly perilous state of many private colleges, particularly in the Northeast.  It makes an effective, if depressing, companion piece to the one from last week about public universities in Pennsylvania.  

In both cases, a combination of awful political choices, difficult demographic changes, and long-deferred economic dilemmas threatens the survival of many small, private  colleges.  A declining population of high school graduates in the region, particularly from higher-income families, is really starting to bite.  And with increasing numbers of options and increased marketing of those options, it’s harder for high-priced colleges to get by on local kids who see that college as the only option.  

There’s no painless and elegant way to correct regional overcapacity.  That’s especially true in an industry like higher education that is both labor-intensive and built on the assumption of growth.  

If you were the president of a small, struggling, not-terribly-prestigious liberal arts college in a region without much population growth, what would you do?  For the sake of argument, let’s assume that you’ve hit the practical limits of tuition discounting (“presidential scholarships”) as a strategy, and let’s further assume that you’ve already done a decent job of marketing.  And let’s say that your budget is mostly tuition-driven, so you can’t rely on a hefty endowment to bail you out. The freebies have already been taken.  And keep in mind that presidents can’t act alone; they have to work with trustees, alumni, faculty, students, faculty, and staff, among others.  Each of those has its own interests, and if it perceives those interests as threatened, will respond accordingly.

You could try to cut your way out.  In the very short term, this is probably the path of least resistance, at least if it starts with cutting by attrition.  But over time, this strategy has natural limits.  Beyond a certain point, it threatens the ability of the college to compete.  

You could try to counter population decline by importing students from countries that export them, like Brazil or China.  I’d love to hear from readers in colleges that have done that.  How well has it worked?  

You could branch out into the working-adult and online markets, though in most cases, it’s safe to assume that you already have.  Your competition probably has, as well.

You could try to grow your way out.  This was a favored strategy in the 2000’s.  If you’re already suffering declining enrollments, though, you’ll need first to figure out the “hook” that will bring in new students, and you’ll need to be able to spend money on it.  If you’re already struggling, this may not be an option.

You could try merging with another college.  

You could try high-risk financial shenanigans, and hope for the best.  This tends not to end well, but sometimes lightning strikes.

You could ramp up your alumni campaigns, though again, I’ll assume you’ve already done that.

Or, and this is where I expect to see much of the action in the next five years or so, you could decide to specialize.  It’s one thing to be an average liberal arts college among many.  It’s quite another to be a national leader in Nuclear Basketweaving, or Applied Widgetry, or whatever the distinctive local industry is.  

The specialization option is both costly and risky.  It’s costly internally, since it involves picking winners and losers.  The losers will not go gently into that good night.  And it’s risky externally; if you pick the wrong winner, you’re in trouble.  But some level of specialization offers the possibility of owning a distinct niche, and thereby of distinguishing yourself from the competition.  If you’re charging thirty thousand a year in this economy, you’d better offer some sort of value proposition that’s easy to explain.  

Some colleges achieve niche status through demographic identity, whether religious or racial.  (I don’t see a market for moving a coed college to single-sex, though I guess it’s conceptually possible.)  Others achieve prominence in a tentpole program, and rely on that.  A unique location can do the trick, if you have it.  A few have even adopted self-consciously conservative politics as their core identity, and have made themselves famous that way.  

If this is the direction of the next several years for small private colleges, and I think it will be, I expect to see escalating conflicts over shared governance and presidential powers.  It’s hard to pick winners in a shared governance setting, and it’s hard politically to do layoffs in some programs while actually growing others.  My guess is that we’ll see more stories about governance, process, and institutional identity.

Of course, I could be wrong.  Wise and worldly readers, if you were a president at a college like that, what would you do?

Comments:
It is too early (or too late) to address your question, but I want to thank you for reading my mind and commenting on that article from today's IHE! It was right in your wheelhouse, and you nailed it.

I will admit I was kind of surprised that one of you older blog posts wasn't quoted in the article.
 
You can start admitting students whom you would have rejected before, and pile on the developmental courses which you call almost anything but developmental. It works for a few years, until your faculty start asking why they are teaching middle school English and math.
 
My immediate reaction was to hit the international markets; I'd target eastern Europe, actually. But I don't know to what extent schools are already doing that.
 
What Anonymous at 0453 said ... you'll never get the grade schools and high schools to get it right if you keep enabling their failures, and nothing guts faculty morale quite like changing the job description from college professor to special education coordinator.
 
It works for a few years, until your faculty start asking why they are teaching middle school English and math.

Indeed. The grammatical errors that I find in essays and lab reports are simply inexcusable. Why am I stuck correcting grammar when I should be instilling style? And why are students in calculus-based physics stumbling over high school algebra?
 
I'd never be in such a position, so it is tempting to get snarky. I resisted that last night, and will try to do so tonight.

The main problem is that some of those "nothing special" schools might be in too deep to get out. (Those lists do exemplify "nothing special". I have only heard the names of a few of those PA state colleges and fewer of the private ones, some of which do have some unique characteristics that might help carry them through.) All it takes is one boarded up dorm ...

In a larger sense, I see two types of President that could do well in the broader group of colleges that want to avoid ending up in a similar situation.

One group are the ones who really understand how to manage budgets to make full use of every tuition and (perhaps more importantly) donation dollar. Capital expenses have to pay off in enrollment, not sink the college in debt. Classes have to pay for themselves. In that case, both students and donors may see you as the right choice for their future. Even then you might only defer the problem.

IMO success may require deferring disaster for your school until it takes out the others. Demographics and spending priorities are the ultimate problem for both public and private colleges.

The other group are the ones who produce short term gains at the expense of long-term disaster, such as the common methods alluded to above. (One problem is that some of those methods may have been tried already and resulted in the current disaster.) Their skill is to sell the flavor of the month, and leave for the next troubled school at the peak of their "success". If they can blame what happens next on their successor, this can keep up for some time. The model for this person could be "The Music Man".
 
Posting error.
Anonymous above is me.
 
You left out one possibility that seems to be getting traction: Relocating to a location with more favorable demographics. Several schools like those you're talking about have recently agreed to open campuses in Mesa, Arizona. The city is trying to revitalize its downtown by drawing these schools, who see a way to tap into a new set of 'local' students in expanding their enrollment. I suspect they're also using the opportunity to specialize a bit, since the new campuses allow them to set new priorities without directly tearing down the old.

I'd be curious whether you think such attempts are likely to be successful, or what you think are the pros and cons.
 
I suggest that they try everyday low pricing, and end all the financial aid malarky.

Nothing sticks in a middle class family's craw more than discovering that their thrift has made them not only ineligible for financial aid, but that they must pay more to cover the overspending habits of those who didn't save for college. My understanding is that up to a third of nominal tuition is redistributed to "needy" students. Some of those may actually be needy, but many are just those from families who knew better how to game the system.

I prefer to pay 100% of the cost of my own education and 0% of the cost of anyone else's. Let the alumni cover that, if they wish to.

This might be a tough concept to market, admittedly it might not appeal to many. But the market distortions created by financial aid have become a cancer on higher education.
 
every year it seems as if the SLAC where I teach ads 2-3 new admin positions for every new faculty slot. there is definitely bloat there that could be cut. We have an entire staff that spends the year "evaluating" student term papers, but they never tell us what they found.
 
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