Acute Revenue and Enrollment Pressures for Colleges

The financial condition of U.S. colleges is only getting worse, at least according to credit-rating agency Moody’s Investor Service.

In a recently released research note, Moody’s observes that:

A significant and growing number of public and private universities are experiencing notable challenges. Regional public universities and small private colleges, particularly those in the Northeast and Midwest, are increasingly unable to grow net tuition at a rate higher than inflation.

Nearly a half of private colleges and more than a third of public universities are projecting enrollment declines.

Moreover, when it comes to revenue, ratings matter, especially for private colleges. Moody’s notes that pricing power (the ability to maintain or grow tuition revenue per student) is strongly correlated with ratings.

Small regional liberal arts colleges are particularly vulnerable.

So what are the implications of these findings? In short, more of the same.

  • More cost cutting, program eliminations (academic and sports) and layoffs
  • Larger class sizes
  • Growing percentage of adjuncts vs. full-time faculty
  • Greater disparity between the student experience at the strong institutions (private universities with large endowments and public flagship universities) and the weak ones (regional public universities and small private liberal arts colleges with small or modest endowments)
  • More institutional mergers and closures

Campus Culture Really Does Matter

Campus cultures vary considerably. And if a parent needs proof of this, just read the Rolling Stones story that hit the newsstand yesterday, titled A Rape on Campus: A Brutal Assault and Struggle for Justice at UVA. Continue reading

College Applications Reveal a Deeper Problem

I’ve been away the past week and a half hiking in warm and sunny Sedona, Arizona. The timing was great: we missed a blast of Arctic air that gripped Colorado for much of the time we were gone. Coming home to snow on the ground last night was a bit jolting. But we were glad to arrive home without incident, having been fortunate to miss that big elk that darted across the road in front of us. But this blog is about finding the right college, not about my recreational activities. Yet it occurs to me that nothing really has changed in the world of higher ed during my absence (sans some rearrangement of college football rankings).

I did learn that more Chinese than ever are coming to the States to college. Bloomberg reports that the number jumped 75% in three years. That’s really good news for U.S. colleges that are in desperate need of full-paying students. Indeed, the influx of Chinese students is keeping some small liberal arts colleges alive. One wonders what will happen when the spicket is turned off or down.

More troubling news was reported by The New York Times in a story titled Applications by the Dozen, as Anxious Seniors Hedge College Bets.  We learned that 10 college applications per high school senior are commonplace, 20 are not unusual and 30 or more aren’t unheard of.

My first reaction was, what are we doing to our kids to foster such anxiety and insecurity? Continue reading

An Elite College Is Not in the Cards for Your Child

“Parents, calm down.” This quote is from a teen who is featured in this blog post entitled Parents: let Harvard go. It’s great advice.

The post is written by a former admissions officer at two elite colleges. Parents of college-bound kids would do well to read it, especially those parents who are wrapped up in—indeed, defined by—their children’s achievements.

According to the author, “your child is not getting into Harvard no matter what he or she does.” Continue reading

The Scary Economic Environment Surrounding Our Colleges

Cullen Roche authors a great blog: Pragmatic CapitalismHis post Wednesday, titled How The Economy Crushed the Democrats & Why Neither Party Will Fix It, supplements my Wednesday post well, the difference being Cullen is much more knowledgeable and articulate than I. In any case, I recommend not only the post but also the entire blog. Continue reading

So You Want To Be An Entrepreneur

I can’t tell you exactly how many college students I’ve spoken with who want to be an entrepreneur. But it’s a lot. I suppose it’s because they think entrepreneurs get rich. I also think it’s because some think of entrepreneur and successful business person as being the same thing.

Whatever the reason or motivation, any college student (or college-bound student) who thinks entrepreneurship sounds cool would do well to read Anna Prior’s WSJ article entitled What College Can Teach the Aspiring Entrepreneurs.

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