David Attis - Council of Graduate Schools

Academic Affairs Forum
Future Students, Future Revenues
Enrollment Shifts and Financial Sustainability
Council of Graduate Schools
December 6, 2014
eab.com
The End Is Near?
Growing Concerns About the Financial Sustainability of Higher Education
Presidents
Chief Business Officers
“I am confident about the sustainability
of my institution’s financial model”
“I am confident that my institution’s
financial model will be sustainable”
2
62%
52%
50%
41%
34%
26%
15%
12%
Agree or Strongly
Agree
Disagree or Strongly
Disagree
Next 5 Years
©2014 The Advisory Board Company • 29416A • eab.com
Agree or Strongly
Agree
Disagree or Strongly
Disagree
Next 10 Years
Source: The 2014 Inside Higher Ed Survey of College & University
Presidents; The 2013 Inside Higher Ed Survey of College & University
Business Officers; Education Advisory Board interviews and analysis.
Out of Balance
3
Revenues Under Pressure As Costs Continue to Grow
Revenues
Costs
 Long-term Demographics
 Employee Benefits
 State Budget Pressures
 Deferred Maintenance
 Federal Budget Cuts
 Increased Student Services
 Increased Financial Aid
 Rising Compliance Costs
 Declining Median Incomes
 Legacy Programs
©2014 The Advisory Board Company • 29416A • eab.com
Source: http://www.bain.com/Images/BAIN_BRIEF_The_financially_sustainable_university.pdf
What Got Us Here Won’t Get Us There
4
Revenue “Tailwinds” Can’t Be Relied On Going Forward
Revenue
State Funding
Federal Funding
Tuition
Philanthropy
Enrollment
Volume
Auxiliary Revenue
Net Tuition
Revenue
Demographics
Retention
List Price
Financial Aid
Decline in
high school
graduates
At-risk
populations
growing in share
Family
finances
under stress
Increasing need
and merit aid
competition
©2013 The Advisory Board Company • eab.com • 27528C
Source: Education Advisory Board interviews and analysis.
How We’re Responding
5
Delaying the Demographically Inevitable
Running To Stay in Place
Ruinous Competition
Deploying the Entire “EM Playbook”
Net Tuition
Revenue
Targeted
financial aid
Weaker Pricing, Escalating Support Costs
Better
articulate the
college’s brand
Flight
to Quality
Price
Shopping Across
Income Levels
Higher
Academic
Support Costs
Expand
recruitment to
far-flung states
 Nationalized Recruiting
Increase
applicant pool
 Everyone Trying Everything
Unsustainable
Discounting
 Net Price Transparency
Today
©2013 The Advisory Board Company • eab.com • 27533A
Five Years Hence
A Decade and Beyond
Source: Education Advisory Board interviews and analysis;
http://chronicle.com/article/The-Admissions-Playbook-Is-Up/141625/
Many Institutions Already Struggling
6
Concerns About Enrollment and Net Tuition Revenue
71%
80%
77%
75%
45%
40%
20%
25%
I am concerned about meeting my
institution's new student enrollment
goals this year
Increases in the discount rate have
decreased my institution's net
tuition revenue
Public Doctoral Public Masters/ Private Doctoral/
Private
Baccalaureate
Masters
Baccalaureate
©2014 The Advisory Board Company • 28672A • eab.com
Source: Scott Jaschik, “More Pressure Than Ever: The 2014 Survey
of College and University Admissions Directors,” Inside Higher Ed,
September 18, 2014.
A Way Out?
7
Diversifying Enrollment and Revenue
Sustainable Frontiers
Low-Income, High-Ability
?
International Undergraduates
Community College Transfers
Adult Degree Completers
Professional Master’s
Net Tuition
Revenue
Running To Stay
in Place
Critical Requirements
 New Program Designs
 New Student Support Services
 New Marketing Approaches
 New Online Infrastructure
Ruinous
Competition
©2014 The Advisory Board Company • 29416A • eab.com
No Margin, No Mission
8
Understanding Cross-Subsidies within Universities
Research
Marginal Contribution
per Student Credit Hour
Public Research University
Doctoral
-$250
Graduate/ Professional
$5
Upper Division Undergraduate
$25
Lower Division Undergraduate
$95
Student Services
©2013 The Advisory Board Company • eab.com • 27529E
Source: EAB interviews and analysis
Converging Interests
Professional Masters Address Challenges to Traditional Graduate Education
The Graduate School
Traditional
Degrees
Primary
Audience
Key
Challenges
New
Trends
Professional Schools
Continuing Education
 PhD
 MBA, M.Ed., J.D., etc.
 Certificates
 Academic/ researchbased master’s
 Professional doctorates
 Noncredit courses
 Executive education
 Summer programs
 Future academics
 Career starters
 Working adults
 Career changers
 High school students
 Struggling to subsidize
PhD programs and place
graduates in academic
jobs
 Short- and long-term
trends holding down
demand for MBA,
MEd, JD
 Noncredit programs
generally less popular
than credit-bearing ones
 Smaller cohorts, interdisciplinary programs
 Shorter, specialized
programs: Master of
Finance, LL.M., etc.
 Degree-granting authority
 Plan B options, PSM
 Degree partnerships with
academic departments
Professional Master’s Degrees
©2014 The Advisory Board Company • eab.com
Source; Education Advisory Board interviews and analysis.
9
Where the Growth Is
10
Large Fields Still Popular, But Smaller Fields Growing Faster
Growth in Masters and Professional Degrees Conferred by Discipline, 2006-2011
of growth from four
61% Share
largest fields (dark gray)
Engineering Tech, 2,410
80%
Transportation, 606
Criminal Justice, 3,352
Percentage
Growth in
Degrees,
2006-2011
Bubble size and label indicates
absolute growth in degrees
conferred, 2006-2011
Recreation and Fitness, 2,618
60%
Interdisciplinary Sciences, 2,618
Health
Care
41,110
40%
Public Admin/Social Work, 10,023
Business
42,847
Engineering, 9,071
20%
Education
13,888
Law
3,969
0%
0
50,000
100,000
150,000
200,000
Number of Degrees Conferred, 2011
1) Disciplines are defined by 2-digit Classification of Instructional Program (CIP)
codes. Data includes master’s and doctoral degrees.
©2013 The Advisory Board Company • eab.com • 27532C
Source: National Center for Education Statistics, IPEDS Data Center;
Education Advisory Board interviews and analysis.
A Market-Driven Approach to Program Design
Creating Niche Programs Micro-Targeted to Specific Roles
Rate of
Growth
Specialized
Professional
Programs
Core
Professional
Programs
Number of Degrees Conferred
Core Professional Programs
Specialized Professional Programs
 Larger enrollment
 Smaller enrollment
 Slower growth
 Faster growth
 Targeted to large professions and roles
within relatively stable industries
 Targeted to new industries, new roles
within rapidly changing industries
 Less focus on specialized skills
 More focus on specialized skills
Marketing focused on institutional
brand and reputation
Micro-targeting students based on
roles, skill clusters, industries
©2013 The Advisory Board Company • eab.com • 27528C
Source: Education Advisory Board interviews and analysis.
11
Not Just “Working Professionals”
12
Designing Programs to Serve Distinct Market Segments
Entry into new field
In related
discipline
Professional
Goals
Advancement in current field
Career Starters
Career Climbers
Recent graduates seeking
professional degree before
entering workforce
Mid-career professionals
seeking graduate degrees
for promotion or raise
 Accelerated format
 Flexible delivery
 Stackable credentials
 Stackable credentials
 Practical experience
 Professional development
Career Changers
Career Crossers
Mid-career adults seeking
graduate degrees to move
into new fields
Mid-career professionals
seeking cross-training to
advance in current fields
 Accelerated format
 Flexible delivery
 Interdisciplinary pathways
 Interdisciplinary pathways
 Practical experience
 Professional development
Academic
Background
In unrelated
discipline
©2013 The Advisory Board Company • eab.com • 27528C
Source: Education Advisory Board interviews and analysis.
New Program Types Require New Capabilities
13
A Contrast To Traditional Master’s Programs
Professional Masters Students
In Fast-Changing Industries
Strongly Focused on ROI
Long Out of College
New Program Requirements
Faster Program Approval
Rigorous Market Research
More Flexible Admissions Requirements
Evaluating Multiple Programs
Student-Centric Program Design
Shopping Online
Online Marketing and Recruiting
Working Full-Time
Expect 24/7 Support
Looking to Rise within Their Org
See Masters as Route to a Specific Job
©2013 The Advisory Board Company • eab.com • 27528C
Flexible Delivery Modes
Working Adult Support Services
Leadership Development
Career Placement
Source: Education Advisory Board interviews and analysis.

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