Linking Finance and Enrollment

I’ve been working on a project for an institution where we are building a financial model that integrates new student enrollment, continuing student enrollment, and financial aid across all levels – undergraduate and graduate.  While not a new concept, for high end market position institutions with rich endowments, this may be a newer construct.

At Saint Joseph’s University, because of the collaborative, committee-oriented culture of the institution, we had this structure in place back in 2007 with a formal group – Tuition Enrollment Analysis Committee (TEAC) – you gotta love the alphabet soup of higher education.  The committee kept the institution largely on the same page across finance, academic affairs, and enrollment management.  There was, however, one exception to this when the budget officer, the only individual with intricate knowledge of the budget model, left the university, and institutional financial projections became uncertain.  Fortunately, we had smart people, like Bob McBride, who is a wizard on the finance, student, and enrollment side of building analytic tools.  This goes to show why replication of knowledge and skill sets is critical.  Having only one sole knowledgeable person on a campus serves as a single point of failure and an institutional risk should the individual win the lottery. 

For this reason, at the institution where I am working, we assembled a team of individuals from finance, financial aid, academic affairs, registrar, institutional research, and enrollment who all came together and worked together to facilitate building the model.  It’s been like watching poetry in motion as the team worked across their respective areas talking about how certain student categories are labeled and populated in the student information system.  Seeing the collaboration of individuals working together to problem-solve while iteratively building the model with new and different inputs has resulted in meaningful learning and professional growth for all involved. 

At the opposite end of the spectrum, at another institution, I experienced a completely different phenomenon.  The financial and enrollment model was held as a hidden tool unavailable for review outside of a particular area.  After viewing it once, I realized the enrollment inputs were being tracked through the continuing student experience with inappropriate metrics.  After raising this with senior academic administrators, I was essentially told to “stay in my lane”.  To ensure we had a tool that accurately tracked and projected enrollment, we developed a model within enrollment management as a hedge.  When the hidden finance model showed an enrollment shortfall in one particular year, I was asked to comment on the cause of the occurrence.  Articulating my lack of knowledge of how the model worked resulted in some increased transparency.  While helpful, in subsequent years, enrollment targets would change mid cycle.  When inquiring how or why this was happening, the feedback I received was, “this was a leadership decision”.  Respectfully, this is anything but leadership and shows a lack of planning.  

In the current higher education environment, to ensure financial and institutional sustainability, it is critical that enrollment and the finance areas, work hand and glove in a collaborative manner.  Adding to this group, student life, if housing capacity is a consideration, as well as academic affairs and registrar is also critical from a classroom capacity and teaching load perspective. 

The intersecting variables tied to tuition increases, new student enrollment targets, continuing student persistence projections, and financial aid spending are critical conversations that impact the institutional mission as well as revenue projections.  Having representation and collaborative conversations with each of the constituencies mentioned above are essential.  Tuition increases and financial aid spending are measures of student demand and value proposition strength not just financial levers or institutional expenses. 

Enrollment capacity metrics impact the student experience and learning outcomes and are more than financial inputs.  While the finance component of these conversations is critical, they are just one voice that influences institutional sustainability.  I have experienced these interactions and phenomena in a constructive and not-so constructive manner.  On the not-so constructive side, the downstream financial and employee morale consequences have real institutional sustainability impacts.