Category Archives: College’s financial stability

“Direct Admissions” Trend Could Give Students a Welcome Option

The financial fallout from the pandemic lockdown, along with declining birth rates, could benefit top students by giving them a streamlined application process and college scholarships. Called “direct admissions,” the process allows admissions officers to review the electronic profiles of high school students and contact those deemed to be an ideal match with the particular college and/or scholarship. It can also be a great opportunity to alert students to smaller and/or lesser-known schools that they may never have heard of, but which might be a good match and fit.

Currently 162 colleges and universities are accepting students through direct admissions. Online platforms such as Concourse and Sage Scholars help facilitate the process, and the Common Application is also sharing student profiles with a number of colleges. These include prestigious large colleges like George Mason University, with more than 35,000 students, as well as lesser-known colleges like the University of Maryland, Eastern Shore, with an undergraduate enrollment of 2,385.

This is helpful to liberal arts colleges that are having a hard time attracting students.  The offers of financial aid are also beneficial because too often families just look at the “sticker price” (which few pay).

If a college reaches out to a student with a direct admission offer, she or he should be flattered, and research the college and available financial aid. The more colleges a student is exposed to, the better, and the more likely it is students will find a good fit. After all, there are more than 4,000 colleges in the U.S., so students should consider a whole group of schools, not just a few.

While elite and Ivy League universities aren’t likely to adapt direct admissions, it has taken off in some parts of the country – even among lesser known but highly regarded schools. For example, 17th ranked* Augsburg College in Minneapolis, MN plans to shift all applications to direct admissions, using the Common App and a Minnesota state program.

Robert Heineman, a retired political science professor at Alfred University in New York, was quoted in a Washington Times article as noting that the process is cheaper than traditional applications, which benefits schools struggling to financially recover from COVID lockdowns. Indeed, many smaller colleges are on the brink of closing due to lower enrollments. Students and families need to do their homework to ensure that the colleges they apply to are solvent.

Direct admissions also benefits colleges because declining birth rates have also decreased the pools of qualified students. According to the Pew Trust, ** fertility rates were down 15% in 2020 from the decade ending in 2010,

The only caveat with direct admissions is that colleges contact the student – students can’t request to be admitted through that process. However, if a student feels a college is a good addition to their college list, I’d encourage them to apply.

 

*U.S. News & World Report again named Augsburg one of the Best Regional Universities in the Midwest in 2022. This year, Augsburg is No. 17 on the list. Augsburg is also ranked fourth for best undergraduate teaching, eighth for social mobility, and ninth among most innovative schools.

**Ten states experienced reductions exceeding 20%. Mostly Western states led the way in incurring the most dramatic long-term fertility rate declines, despite often experiencing strong population gains overall, due largely to migration.

Is your target college in danger of going bust?

If you’re a rising senior, you’re probably looking forward to your upcoming college years with great anticipation. You’ve worked hard for the credentials that will qualify you for admission to College just aheadthe schools that fit you best. College is the prize!

But what happens to your aspirations if you enroll at a college that closes its doors when you’re a freshman? You’d be forced to transfer to another college –  one that might not suit you as well. It’s possible that the new one might fail too, forcing a second transfer in pursuit of your Bachelor’s degree. You’d end up spending most of your precious college years gaining and then losing friends, mentors, coaches, jobs, and some credits too. Not to mention the loss to your peace of mind.

Colleges fail

This is not a far-fetched scenario. Colleges fail. In fact, a surprisingly large number of them have failed or been struggling in recent years, even before Covid-19 struck. Experts predict that about 20% of colleges will close in the next few years due to a combination of the pandemic, changing demographics, state disinvestment, and unaffordable tuition. If you’re going to college in 2021, you should find out if your targeted colleges are likely to be among the 80% that will survive.

Top-tier private colleges with multi-billion dollar endowments were given millions in Federal pandemic relief (with many, but not all, returning the money). However, the most at-risk colleges were excluded from the relief legislation. This neglect, added to the problems noted above, will take a heavy toll on the ones most likely to fold, which are small, private colleges with small endowments. Some of them have been operating at break-even or a small deficit for years. Even a slight decline in enrollment can be ruinous because they don’t have large endowments to cushion the blow. The pandemic will be their death knell.

A number of small private colleges have already closed or have announced a closing date in the near future. Here are a few examples:

• MacMurray College, IL
• Urbana University, OH
• Holy Family College, WI
• Pine Manor College, MA
• Nebraska Christian College, NE
• Robert Morris University, IL
• Concordia University, OR
• School of Architecture at Taliesin, WI
• Watkins College, TN
• Marlboro College, MA

Colleges tightening their belts

Many small colleges are adopting severe austerity measures in an effort to avoid closing. Even if they succeed in surviving, you’ll want to assess the likely impact of these measures on you as a student.

Public institutions, even some large ones like Rutgers and Michigan, are also feeling the pinch. States are compelled to cut their education budgets due to the statewide expenses and loss of tax revenue wrought by the pandemic. Public colleges have never fully recovered from heavy cuts to their budgets in the wake of the Great Recession. Add the current budget crisis on top of that and it’s inevitable that some state campuses will be closed.

Even large public and private universities that are expected to survive the pandemic will need to tighten their belts. You should stay informed because your target universities may discontinue the degree programs, majors, and courses in which you’re most interested. There’ll be reductions in faculty that will change the faculty-to-student ratio and impair mentorship programs that may be important to you.

How to research a college’s financial health

You’ll encounter two problems when you search for financial information upon which to base your decisions. First, a private non-profit college is not obligated to make financial statements available to the public. Second, the financial condition of all individual public colleges will be aggregated within the entire state university system, so you won’t be able to discern the financial outlook for a particular campus. Obviously, you won’t find even a hint of the possibility of a college closing on its website. Websites are marketing tools that try to recruit you, not discourage you.

The best way to obtain the information you need to assess a college is to enter the college’s name in a web search engine. If a college is experiencing difficulties, this will be reported in the local press because colleges are important to a community’s well-being.

The Common Data Set (CDS) is another a valuable resource. CDS is an intermediary used by colleges to provide institutional data to interested parties. It’s a collaborative effort between colleges and publishers who report on them, including Peterson’s, the Thomson Corporation, U.S. News & World Report, and the College Board. The purpose of CDS is to improve the accuracy of the information that’s released to interested parties, including you. To find the CDS data set for a particular college, enter “Common Data Set “Name-of-College” into a web search engine.

COVID-19 has come and it will go, but the uncertainty plaguing students at certain colleges across the country will remain. Try not to share their predicament. Use available resources to assess the financial stability of colleges before you apply.