President Cesareo: Enrollment, Finances Challenge New England Colleges
Editor's Note: The following opinion column appeared in the Oct. 14, 2013, edition of Worcester Business Journal.
BY FRANCESCO CESAREO, Ph.D.
People from all over the world recognize New England as the nation's academic mecca. With more than 150 public and private colleges and universities, our region is a major attraction for students seeking a solid, rewarding education that will, in turn, help them discover their personal compass as well as career success after graduation.
But despite the prestige associated with higher education in New England, schools across the region are faced with critical economic and enrollment challenges.
College enrollment decreased by nearly a half million in 2012; the declining number of high school graduates has changed the enrollment landscape. The U.S. Department of Education states that enrollment in Grades 9 through 12 is projected to fall in all Northeast states through 2018, while substantially increasing in the South. Massachusetts' 70 private colleges and universities find themselves competing for a smaller pool of students, while expanding their recruiting bases beyond New England. As the number of prospective students declines, the demand for financial aid is increasing, threatening the current model of higher education.
The advent of online applications, such as the Common Application, has made it easier for students to apply to many schools at once. However, it has also made it more difficult for admissions officers to accurately predict the size of an incoming freshmen class based on previously used formulas. As more students apply to eight to 12 schools, many colleges are accepting a slightly larger percentage of students to account for the difficulty in predicting the intent of applicants.
Another challenge has been the decrease in state funding of financial aid. From fiscal 2009 to 2013, state funding for the average MassGrant award declined 30 percent, in part because the number of applicants increased 89 percent. This has put more pressure on colleges to increase their own institutional aid awards and forced colleges and universities spending more on institutional financial aid to recruit and retain students. In 2012, Massachusetts' private colleges and universities invested $560 million in students from within the state through institutional financial aid. In the case of Assumption College, 95 percent of our students receive aid from the college as well as from federal and state sources.
All colleges and universities, including Assumption, face these significant challenges. However, despite the demographic realities and rise in competition, Assumption remains strong. Our reputation grows each year, as confirmed by our rise from No. 38 to No. 30 in U.S. News & World Report's 2014 Best Colleges list. The college's enrollment management division has focused on new markets. As such, for the seventh consecutive year, inquiries and applications reached record highs, and we welcomed 502 first-year students and 43 transfer students this fall, all of whom are academically strong. The college has also maintained its strong financial footing through this challenging economic climate. For each of the past 37 fiscal years, Assumption has had a balanced budget — and a surplus. According to Standard & Poor's — which has assigned Assumption an "A-" long-term debt rating — the college has a solid balance sheet; a mostly liquid endowment of $90 million as of Aug. 30, and relatively low debt.
The knowledge economy will make a four-year college degree more necessary and more valuable. Given the changed landscape of higher education, the entire industry cannot rely on past remedies to meet its challenges. What worked in the past will not adequately address the problems of today. Higher education needs to re-imagine how it goes about the task of educating students so that they live up to their full potential.
Francesco Cesareo, Ph.D., is president of Assumption College in Worcester, Mass.