How Is the Economy Affecting Private College Enrollments?

Despite a terrible recession, rising unemployment and scandals about college loan programs, enrollment at most private American colleges is holding its own, according to a survey conducted by the National Association of Independent Colleges and Universities (NAICU). Indeed 74 percent of the 300 private institutions surveyed reported that enrollment was steady, and 5 percent said that they were seeing an increase in student admissions. Overall student enrollment in fall 2009
rose a modest 0.2 percent.

What prompted the survey was interest from Capitol Hill, explains Tony Pals, director of public
information at NAICU, based in Washington, D.C. “There was concern among policymakers
about the impact that the credit freeze has been having on institutions of higher education and
the ability of students to afford and attend these institutions,” he said.

How Private Colleges Maintain Steady Enrollment

The bottom line of this report is that private colleges are doing better at maintaining enrollment than many people feared. Pals attributed the steady numbers at most private higher education institutions to “actions taken by the federal government to boost funding for Pell Grants, federal work-study grants and student loans.” Moreover, colleges deserve credit based on keeping tuition increases down to enhance affordability. He noted that tuition rose by 4.3 percent from 2008 to 2009 at its 955 member colleges, the smallest increase in 37 years. Yet critics say that raising tuition even 4 percent at a time when the unemployment rate hit 9 percent and many people’s incomes were shrinking might still make affording college problematic for many students, particularly the working class and poor.

Sally Springer, co-author with Jon Reider and Marion Franck of Admission Matters: What
Students and Parents Need to Know About Getting into College and an associate chancellor
emerita at University of California-Davis, attributes the steady enrollment to colleges “working hard to provide as much financial aid as possible to hard-pressed families. In general, they’ve responded more positively to student aid appeals than in the past, increased the size of awards and number of students receiving aid.” They also were more receptive to students who required little or no financial aid than they were in the past.

College presidents surveyed in the report also noted that the actions of policymakers to increase financial aid helped private institutions maintain their admission numbers. “However, we aren’t out of the woods yet, and everyone needs to be watching the situation closely,” Pals says.

2010 a look back

Ironically, tough economic times are helping private colleges sustain enrollment. “In times of unemployment, more people go to college,” notes Richard Ekman, president of the Council of Independent Colleges, a service organization of 600 private colleges, based in Washington, D.C. Students are attending colleges to become health care professionals and teachers to replace manufacturing and others jobs that have been downsized or eliminated. In addition, private colleges are tuition-driven and rely less on shrinking state aid than public colleges. “Therefore the impact of the financial downturn isn’t felt immediately,” he says of the independents.

To make college more affordable and boost enrollment, private colleges increased institutional aid by 9 percent from 2008 to 2009, the NAICU survey reported. That aid made a major impact on helping students afford the cost of private college tuition and broadened their appeal. Moreover, colleges had to become more flexible to maintain their student population by extending admission deadlines, stepping up financial aid counseling and reaching out to waiting lists. Ekman says that private colleges are increasing aid and grants to help students move away from burdensome loans. Many colleges have augmented student work programs in which students are paid above minimum wage salaries to perform jobs that help pay their tuition. And intensifying intervention with students facing financial aid or academic issues that could lead to dropping out. “Financial aid offices are redoubling their efforts and encouraging students to come to see them before a major problem occurs,” Ekman says.

Many private colleges have also stepped up marketing and recruitment efforts to keep enrollment numbers humming. Institutions are “reaching out to students to reassure them that a private college education is affordable and attainable,” Pals said. Colleges are also tapping alumni by asking for referrals and encouraging positive word of mouth. Ekman adds that only a handful of private colleges are highly selective and get several times the number of applicants for every available admissions slot. Private colleges operate in a “very competitive marketplace,” he adds.

Where Admissions Are Declining

Despite steady enrollment numbers achieved by three out of four colleges, 21 percent of colleges reported a decline, a cause of concern. Ekman senses that most of those hard-pressed colleges are located in states such as Michigan, battered by high unemployment and the loss of auto manufacturing and related jobs, making it difficult for parents to finance their children’s college costs.

Students too have been affected by the recession, which has cut into their ability to take a full credit load. Indeed, 26 percent of all private colleges reported an increase in students changing from fulltime to part-time status, and if that number increases, it could affect graduation rates in the future.

Trinity Washington

At Trinity Washington University, a private college in Washington, D.C., where the student population is 65 percent African-American and 20 percent Hispanic, enrollment rose to 1,900 students in 2009 from 1,800 in 2008. Ninety-five percent of its students receive financial aid, and 60 percent of its full-time students obtain Pell Grants. Tuition costs $19,300 annually at this college, which has an all-women Arts and Science College but is co-ed in its School of Education and professional schools like nursing.

“We offer a tuition discount, which averages 40 percent for every student,” explains Patricia McGuire, its president since 1989. Institutional aid from the college explains the reduced cost of tuition. “Our mission is to make higher education accessible to the women of Washington, D.C., and Prince Georges County,” she says. Despite its modest $8 million endowment, the university’s thriving professional schools help lower the cost of its undergraduate education. Most undergraduates pay an average of $2,000 out of pocket plus taking out loans to finance their education.

Tough economic times have affected students at Trinity Washington. Many hold part-time jobs, and some freshmen juggle full-time jobs with undergraduate studies. “Most are self-supporting and don’t have mom and dad paying the bills,” McGuire adds. The school uses its Facebook page as a way of communicating with students, which can help faculty learn if a student is facing academic or financial problems and lead to counselors intervening.

“Our secret is not recruiting or marketing. Our secret is high-quality education to underprepared students,” says McGuire. Its required freshman curriculum emphasizes reading skills in every class, trains students in math and tests them on critical benchmarks in reading and writing. “We provide extensive one-on-one support and tutoring,” McGuire adds. “Just because a student comes to us with poor math skills doesn’t mean she’s doomed to failure,” she notes.

Hence, its academic standards have built the college’s reputation. So have successful graduates of Trinity Washington such as Nancy Pelosi, the speaker of the House, Kathleen Sebelius, currently secretary of health and human services in President Obama’s Cabinet and former governor of Kansas, and Cathie Black, CEO of Hearst magazines and author of the best-seller Basic Black: The Essential Guide for Getting Ahead in Work (and in Life).

Although state subsidies are channeled into public colleges and community colleges, private colleges also benefit from state financial aid for students. And when state subsidies are cut, private colleges feel the impact. In the NAICU survey, 32 percent of private colleges responding reported a decline in state aid, and 19 percent noted an increase.

Private Colleges Still Reaching Out to Minorities

The NAICU survey did not gather data regarding how the recession is affecting minority and Latino students attending independent colleges. Pals noted that private colleges “are concerned about the enrollment from all ethnic groups and concerned about maintaining access to students of all backgrounds.” Ekman adds that private colleges strive to create a diverse student body in many ways: economically, ethnically, racially and geographically. “Nearly every one of our presidents is committed to raising scholarship money,” he says, to maintain diversity.

Author Springer sees most private colleges striving to maintain their diverse student body despite the financial pressures. Many encourage applicants from underrepresented community and assign designated staff to oversee minority recruitment. Colleges also use financial aid stipends to promote access. But once minority students arrive on campus, they need to be “welcomed and supported” in order to stay and graduate, and most colleges are well aware of this, Springer adds.

Springer also notes that most public universities are facing the same economic pressure as private colleges. She recommends that when students apply to college they create a list of goodfit schools that includes one or two they’re confident they will be accepted into and can afford. She also notes that community colleges serve as the gateway for many students because they’re inexpensive and students can transfer to a fouryear college without losing time.

To survive in tough economic times, private colleges are turning entrepreneurial. Some are starting master’s programs for teachers to attract new students. Georgetown College, a liberal arts college in Georgetown, Ky., rents its athletic fields to the Cincinnati Bengals, the professional football team, for training camp to generate funds. Ottawa University, a small private college in Ottawa, Kan., opened satellite campuses in Overland Park, Kan., Phoenix, Ariz., Brookfield, Wis., and Jeffersonville, Ind., for professional studies and to appeal to working adults.

Minority students are encouraged to seize the initiative in looking for scholarship and grant money. Don’t wait for the adviser to contact you. Do research on the Web, write letters to colleges, meet with financial aid counselors at your number one college, and ask for assistance from high school guidance counselors and family members who have graduated from college.

Trouble Brewing if Recession Continues

Pals notes that if the economic downturn continues, “we could see a number of other budgetary cuts” at private colleges – “additional layoffs or further salary freezes or cuts.” Moreover, the number of private colleges closing could increase. NAICU reported that only five colleges closed in 2008, which Pals attributes to their “inability to fill a market niche.” Based on the NAICU report, the message to students is clear, Pals says. “Despite the recession, private college education is still possible, attainable and affordable. Despite sticker shock, no student should rule out private college.” He cautioned, however, that in these tough times, private colleges must “demonstrate and communicate their value to consumer and that they’re worth the out-of-pocket costs.”