Growth, Barriers, Myths, and Successful Strategies

Idea Exchange concept

October 13, 2023

The following insights were originally presented in a keynote at the AASCU Symposium for Provosts: Transforming Academic Program Evaluation & Management.

I want to share the many reasons you can’t grow, why you must grow, and how to grow despite all the headwinds.

Let’s start with headwinds, barriers, obstacles, slings, and arrows. There are a hundred and one reasons why higher education in general and your college are doomed. You might be disrupted, “goldilocksed,” “cliffed,” out-competed, bad-mouthed, or just plain stuck in the mud. Let’s consider a few of these pessimistic prognostications.

First up is disruptive competition. Clayton Christensen’s research on competition in the business world showed that disruptors have been quite successful. Disruptors offer low-cost solutions that meet customers’ core requirements without offering all the bells and whistles. Some years ago, Christensen laid out a compelling argument that traditional higher education institutions, especially small private institutions, would be “disrupted” by lower-cost, more convenient forms of higher education.

Eight-hundred and sixty one colleges (and almost 9,500 campuses) have closed since 2004. However, the primary cause was not disruption; it was regulation. 78% of closed colleges were for-profits, shut down by the DOE. Non-profit colleges have closed, but relatively few, and they taught a tiny fraction of US college students.

Some of the biggest disruptors got disrupted. Traditional institutions swallowed them. Purdue bought Kaplan University. The University of Idaho is buying the University of Phoenix. Harvard and MIT sold their disruptor (EdX) to 2U.

Why haven’t the disruptors won? Well, they still might. On the other hand, college is a highly local service, with most students attending a college within 100 miles of their home. Students still want a college experience: not just classes, but a chance to get out of mom’s basement, go to bowl games and parties, make friends, and enjoy the status that still comes with a degree from a traditional university. Regulators have also put the brakes on the disruptors, including online for-profits and, more recently, OPMs.

Have we been “cliffed” – sideswiped by a failure of Gen X to procreate? Not really. The much-hyped demographic cliff is more like a molehill, a 1% annual decline in college-age students, which only explains a small part of the 5-9% declines experienced by many institutions. The purported demographic decline in traditional-age students is small compared to the non-traditional student demographic: over 40 million people with some college credits but no degree. The Cliff also assumed that enrollments by ethnicity would remain constant. They did not. For the fastest-growing demographic in the US, Hispanics, college attendance has increased dramatically. In 2010, 14% of Hispanics had a bachelor’s degree. By 2021, 23% had a degree.

Next up: Goldilocks ate our porridge. The “goldilocks economy,” which keeps growing despite rate hikes by the Federal Reserve, competes with higher education. When unemployment is low, enrollment is low. More precisely, the change in unemployment is closely correlated with college enrollment. As the unemployment rate drops, enrollment declines. We are experiencing some of the lowest unemployment rates in my lifetime, which undoubtedly hurts enrollment. This headwind is real; fortunately, it is probably abating thanks to Federal Reserve interest rate increases.

Competition is heating up. The remaining online players are spending hundreds of millions of dollars to attract students from across the country. Chances are, an online college, like SNHU or Western Governors University, spends more on advertising in your local market than you do. However, Gray’s preliminary analysis suggests that rising competition and marketing spending may help you. Medical Assisting provides an interesting case study. Hundreds of for-profit campuses that ran very large Medical Assisting programs were closed by the DoE. I expected that the remaining programs would grow. Completions per institution fell. Competition had created a rising tide of demand that that lifted all ships to a limited extent; when the competition left, students did, too.

A genuine and critical issue is politicians and pundits bad-mouthing college. As a result, parents and students are increasingly skeptical about the value of college and fear the debt they may incur. “College ain’t worth it” and “plumbers make more than philosophers” are appealing soundbites. They are also untrue. A recent Georgetown Center on Education and the Workforce study estimated that a college education leads to over $900,000 of incremental income over a lifetime. Gray analysis of wages by major and degree level demonstrates that graduates, even liberal arts graduates, get jobs and get paid more than the average household in the US. For example, history graduates earn over $100,000 a year by mid-career, about twice the national average income.

Why is all this pessimistic punditry so popular, even though it is at least overstated and often wrong? Honestly, I don’t know. But I recall the phrase, “lies travel around the world while truth is putting its socks on.” Given social media, this concept is truer than it ever has been. News travels faster, and the algorithms feed people stories not intended to enlighten them. Their commercial purpose is to keep people engaged by confirming their beliefs and biases. It is also true that bad news and predictions of doom are very popular and always have been. Stories of the end of the world or humanity were part of Mesopotamian culture and are included in the Bible in the Book of Revelations. They made Nostradamus and Malthus famous. Predictions of the end of higher education are also popular and have recurred throughout history. For example, TV and radio were predicted to destroy higher education. Even if you are wrong, you can become famous for predicting doom – and will usually be perceived as wise.

While these headwinds may be zephyrs or myths, enrollment is declining overall and at many of your institutions. In this situation, cutting costs, academic programs, and faculty is tempting. While improving efficiency does have a role in fixing college financials, it cannot right the ship and is somewhat dangerous.

Let’s try a somewhat difficult analogy: sailing. Bear with me for a minute. When going downwind, in strong wind and large waves, small sailboats tend to oscillate or rock – which gets pretty scary and causes many boats to capsize. When the boat rolls away from you, the natural reaction is to lean out and try to pull the boat back.

However, remember, it is oscillating; it will rock back on its own. So, now you are pulling the boat toward you just as the next wave tilts it toward you. Often, the boat simply rolls over on top of you. Of course, that has never happened to me.

Similarly, when you cut, people often gang up on you, claiming the school is insolvent or that vital programs are being cut. Parents and prospects hear about it; cost cuts cause further enrollment and revenue decline, and your financials may quickly worsen. In effect, you lean back, and they push you over.

To continue the sailing analogy, the way to steady the boat is not to lean back or slow it down. Instead, you pull in the sail, which, like an accelerator, speeds the boat up and stabilizes it. The way forward for troubled institutions is to speed up, that is, to increase enrollment.

Is enrollment growth really possible for beleaguered colleges? Let’s explore a few examples.

College enrollment has been declining 2% annually in the Dakotas. A small religious college was shrinking; enrollment was down to just over 1,900 in Fall 2016. Then, it hired a new President with a vision for the institution and a willingness to take risks and invest in growth. Today, its enrollment has broken records.

In middle-of-nowhere Maine, a small, poorly-endowed independent college was scraping bottom. Down to 540 students in Fall 2012, it undertook a bold growth plan. 2,349 students enrolled in Fall 2021.

A little-known public university in a small city in Massachusetts has grown from 2,694 students enrolled in Fall 2012 to 5,452 students in Fall 2021.

A women’s college in western Massachusetts has added almost 2,000 students since 2010 and tens of millions of dollars in revenue.

I believe growth is achievable at almost any institution. But how? Below are a few strategies schools use to turn around enrollment.

Sports. Often, athletes will not attend a college where they cannot play. Adding a sport can attract them – and they pay tuition, especially in DIII, where athletic scholarships are not allowed. Look for sports with long rosters and low expenses, like track and field, which carries a roster of approximately 30 athletes at a cost per athlete of $2,575.

Graduate Programs: Adding graduate programs has been a popular growth strategy for years. I suspect it is getting more difficult as graduate enrollment has begun to decline. But you can win in graduate education with accelerated, hybrid programs. A client is hosting its first class for a hybrid doctor of physical therapy program – 40 students have enrolled.

A Serious Commitment to Online Programs: This requires more than online courses; colleges must build support services aligned with online learners, specifically, evening and weekend support across the institution, including admissions, financial, registration, tutoring, career services – and faculty office hours.

OPMs: To scale up online also requires substantial investment in marketing and admissions.
Often, this leads to hiring an online program manager (OPM). OPMs have the money, expertise, and financial incentive to scale up online programs quickly. There are dozens of examples of such successes.

It is also true that OPMs can raise ethical, legal, and regulatory issues that should be carefully considered and managed. USC’s online Master’s in Social Work grew from a few hundred students to over 3,000, but the median student debt on graduation is $112,000 – and the median pay of a social worker ranges from $40 – 60,000. Lawsuits are pending.

Experiential Learning: Internships with employers can attract students and help them get a job after graduation. Universities like Northeastern, which have integrated work experience into their academic programs, have been very popular in recent years.

Links to Community College: Strengthening relationships with local community colleges, establishing articulation agreements, and sending recruiters can help you attract transfer students. These students usually dovetail nicely into your classrooms. Most institutions have material attrition in freshman and sophomore classes, leaving 300 and 400-level classes under-enrolled. The community college graduates who enter as juniors can fill up these classes – at almost no incremental cost to your college.

International: Overseas, America’s universities are still regarded as the best in the world. Bolstering international recruiting can attract more students, especially in STEM fields, that offer attractive work visas after graduation.

Adding ancillary revenue can also generate funds, but usually, they are modest. Colleges have added farm stands, outdoor adventure programs, and employee training programs for local businesses. The exception is healthcare, where revenue from university hospital systems often exceeds tuition and state funding.

Dynamic pricing is an emerging opportunity. The concept is to know your cost and align scholarships with the margin available by discipline and facility. Remember that the cost of an additional student varies widely by program. One more nursing student could cost hundreds of thousands of dollars since most nursing courses run full, and the accreditor caps their size. One more student may require adding sections to almost every class and certainly to expensive clinical experiences.

One more History student probably costs you nothing for instruction, as they can fit into existing classes and sections. But the 20th new History student might require a slate of new sections, faculty, and costs. Dynamic pricing uses discounts to fill classes but not overfill them. It offers just the right number of scholarships to attract students without overpaying. It is a relatively new field that will benefit from advanced cost models and machine learning models to optimize scholarships.

Some of these growth strategies can take you far afield. Let’s discuss a growth strategy close to higher education’s core: academic program innovation.

You need solid data on program markets and economics to make sound decisions on programs to Start or Grow. If the impetus for a new program is instinct, a stakeholder, or a local employer’s needs, the results can be disastrous. One community college built an optics lab at the request of local employers. $500,000 later, they had five students enrolled.

The results can be transformational, with the right data and program evaluation process. For example, the women’s college I mentioned grew primarily through program innovation.

Not all new programs have to involve major investments in new courses, faculty, or facilities. At one client, the provost, registrar, and faculty worked together to create interdisciplinary programs that are largely remixes of existing courses. For example, a new music production program combines courses in music, technology, and business with no new courses or faculty required.

Right now, there is a once-in-decade opportunity for growth: AI programs.

I appeal to you to act. We will not win the long competition against China with fewer college- educated people. We will not heal the breaches in our society with fewer citizens who can discern truth from fiction and tolerate views, ethnicities, and genders that differ from their own. The US needs college-educated citizens and workers.

Do not accept excuses for decline. Universities of all kinds have found ways to grow. Learn from them.

Growth is possible – and necessary. But growth requires leadership. It requires innovation and good data to help you select the right innovations. Most of all, it requires strength of will and constancy of purpose.

Time is not your friend. Do not wait to get started. If enrollment is declining, your resources will shrink, and your choices will get worse with each passing day.

Robert Atkins


Bob led Gray DI’s entry into the education industry and the development of Gray DI’s proprietary industry databases and service offerings. He has worked directly with many of Gray DI’s education clients, consulting with CEOs and CMOs on business strategy, pricing, location selection, curricular efficiency, and program strategy.

About Gray DI

Gray DI provides data, software and facilitated processes that power higher-education decisions. Our data and AI insights inform program choices, optimize finances, and fuel growth in a challenging market – one data-informed decision at a time.

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