Using market analytics to advise higher education leadership on future planning, pricing, revenue

1. The Future of Higher Education: Falling
Downstairs or Purposeful Realignment?
FEATURING
DAN LUNDQUIST

2. Falling or Leading in a Time of
Change, Challenge and Uncertainty
• Facing similar challenges, healthcare,
finance, law, the arts, others are leading
• Highered?
– Puzzling prevalence of denial in highered
leadership, indeed culture
• Forces of change
– Unsustainable model meets unwilling market
• Value Era
• The Choice

3. Welcome to 2012
• Tom Friedman recently wrote “…we are
leaving an era of some 50 years' duration in
which to be a president, a governor, a mayor
or a college president was, on balance, to give
things away to people; and we are entering an
era — no one knows for how long — in which
to be a president, a governor, a mayor or a
college president will be, on balance, to take
things away from people.

4. Welcome to 2012
• “Outside of a handful of wealthy, privately
endowed universities, I think a lot of
presidents just find that the jobs aren’t that
satisfying anymore,” said James C. Garland,
former president of Miami University of Ohio
and author of Saving Alma Mater. “A lot of
these people went into administration hoping
to build something, and instead they are
desperately trying to stay afloat.”

5. Dayton Arts Survival:
“interesting but probably impossible”
• “Certainly speaking for the orchestra, we had made, I think,
every conceivable cut that wasn't draconian.”
• “So we wondered, could it be done differently?”
• “People thought it sounded a little bit interesting but probably
impossible, which is frankly what I thought. But again, I
figured as long as we're looking at the business model, why
not look at the business model.”
• “Arts organizations across the country are trying to find new
ways of doing business.”
• “To me it looks like a period of great, great transition. And in
some ways, that means it's a little messy. We see an
unprecedented amount of experimentation.”

6. Healthcare: Tackling a Behemoth
• Jim Reed will spend the next several years trying to take what were
once three separate health care nonprofits and create a national
model for progressive health care delivery.
• For some this might sound impossible : “it can’t be done”
• WHY That's because the local health care system had been so
fragmented in the past, with overlapping facilities and services that
didn't mesh well enough to ensure continuity of care
• RISK Pace of Change: Reed admits that based on his private-sector
business experience, which was at companies like International
Paper and Union Pacific before he went to medical school, it can
take five years in some instances.
– Reed can't say what St. Peter's Health Partners will look like five or 10
years from now
– BUT "The quality of care is going to be better," Reed said. "And
clearly, we can be more cost-efficient with it."

7. Higher Education
Myopia and hubris
• “Not enough of a crisis”
• “Unfortunately, families will have to pay more”
Search for solutions
• Illusory strategies that externalize solutions – NEW MARKETS! MOOCS! –
and take focus off sacred cows
• "Everyone knows education has to change, and the knee-jerk reaction is
to say that MOOC's are going to save us"
• “We must HAVE VALUE and BETTER COMMUNICATE IT!”
• NOT SO FAST… can we “sell” our way out of this?
– Despite growing skepticism, most are “sold” but UNABLE or
UNWILLING to pay “out of control prices”
• “I am not optimistic that many of us have the courage to
move beyond adjusting the current tactics.” CAO NAC&U

8. Past as Prelude:
What Can Recent Trends Tell Us?
Surveying mid-prestige/high-price private colleges,
early indicators reveal post-2008 trends:
– overall application decreases as high as 20%
– inside those gross numbers, financial aid applications
dropped by 5-10% while,
– “full-pay” applications decreased by a factor of three or
four times as much
Some showing price UP, discount UP and per-family
cost DOWN, academic quality DOWN
– NTR UP only because they are growing class size…for now

9. Supply Chain Gut Check: Income

10. Supply Chain Gut Check: Debt

11. Supply Chain Gut Check: Price

12. Family Ability and Willingness to Pay: 2012
$100,000
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$-
1 2 3 4 5 6 7 8 9 10 11
AVG EFC AVG OFFER

13. “You Say”: NYSFAAA member survey data

14. “You Say”: NYSFAAA member survey data

15. Affluent Students:
Attributes to consider a college that’s not my first choice
Increasingly cost sways students and parents to lower-choice colleges.
Source: Cappex July 2012 Survey: N= 1,270 Parents and 1,200
Students; Affluent income: $100k to more than $250k

16. Future Check: from unwilling to unable to
priced-out in a generation
• Across the affluence spectrum, ability and willingness to
pay is decreasing at best.
• As ability to pay increases, willingness to pay decreases:
– more and more students are going to their “second
choice” colleges because of cost.
• If the more-affluent current parents are balking at paying
today’s costs what will the next generation of parents
do?
– …the first American generation pundits predict less well off
than their parents….
• The next cohort of less-affluent parents will have an even
more difficult time paying if college prices freeze today.

18. “I’m from the government and I’m here to help.”

19. The Choice: Lead or Follow
• Wait for market forces?
– Family choice
• Wait for regulatory forces?
– Government money
• Wait for retirement?
– Opportunity won’t be better, later
• Or accept stewardship responsibility and lead
change from a position of strength and
knowledge?

20. The Choice to Lead
• Wesleyan
– Wesleyan University announced that it was moving away from need-
blind admissions.
– Established a three-year bachelor degree.
• Grinnell: President Raynard Kington on reviewing need-blind
admissions
– “I think everybody realizes that something has to change or that we'll
have to face even tougher choices down the road.”
• Sage
– 4 year tuition freeze
• a gain of $13M NTR
• Concordia
– 33% topline price slash

21. So What Do We Do?
• Take action: we are not “just” recruiters and counselors
– Bridging the on- and off-campus constituencies, we are valuable
sources of information
• Return home and announce your newly-realized authority with
commitment, passion, and intelligence
– Work creatively with on-campus colleagues to find sustainable
situation-appropriate solutions, take “prudent risks”
– Forge community partnerships to nurture the “supply chain”
– Have your president’s back and use data to urge leadership to:
• accept their stewardship responsibility to objectively and
creatively look to the future
• “Those were the days…” and they are gone
– Proclaim that New Normal rewards are success more than comfort
– Help people understand that accepting reality is not lowering ambition

23. Read www.DanLundquist.blogspot.com
Follow @DanLundquist
Write danlundquist@gmail.com or Dan@EducationConsultancy.org
See www.EducationConsultancy.org
Call (518) 986-1842