Is Enrollment Management Really Ruining Higher Ed?

If we listen carefully to New America’s Stephen Burd and read the new book he skillfully edited, Lifting the Veil on Enrollment Management: How a Powerful Industry is Limiting Social Mobility in American Higher Education (Harvard Education Press), we’re informed that the “industry” of enrollment management has harmed higher education in major ways. In a recent interview with Inside Higher Ed, Burd asserts that enrollment management has had a disproportionately negative impact on the most vulnerable students by siphoning finite financial-aid resources away from needy students in favor of those with no need. He talks about the rising cost to educate a student due to the “merit” scholarship “arms” race and the catering to wealthy students through high-cost amenities and experiences. In short, Burd claims that the enrollment-management industry “has played a pivotal role in making higher education less affordable and accessible for low-income students and even middle-income students.”

He is not alone, nor is he the first to call attention to this issue. Almost 19 years ago, in November 2005, Matthew Quirk wrote a lengthy article in The Atlantic, citing many of the same concerns that Burd and his colleagues enumerated in Lifting the Veil. Now, however, with a decline in the number of students going on directly to four-year colleges from high school, net tuition revenue is decreasing as more students, many without financial need, are receiving scholarships or, more accurately, tuition discounts, as incentives to enroll. Meanwhile, to afford the “merit” (above need) prizes, Burd asserts that low-income students are being asked to borrow to fund the gap between their demonstrated financial need and the typically lower amount of financial aid awarded.

In the 1970s and ’80s, a fair number of highly selective colleges exchanged financial aid applicant data to level-set the expected family contribution—not the aid award itself, but how much money a family could afford, based on standardized income and asset data. That way, the colleges reasoned, students could make the best decision based on program rather than on price. In the early 1990s, the Department of Justice considered this a violation of anti-trust laws and ended the practice except at a handful of colleges that are need-blind in admissions. That exemption is currently being challenged in the courts.

We believe it was the action taken by the Justice Department that served as the primary catalyst for the widespread practice of data-driven enrollment management in colleges and universities. Where college admission deans once collaborated with colleagues on best practices, over time they became true competitors, trying to out-bid one another to “win” a student.

In his interview, Burd defined enrollment management as “taking a management and marketplace approach to college admissions, and breaking down the firewalls between the financial aid office, the admissions office, the development office and recruitment, among others.” Of course, we believe that colleges should indeed manage their enrollments, making sure that they have students who will succeed academically with the right financial support either from the college, the parents or both.

As colleges became more competitive with one another, the for-profit body of enrollment management consultants emerged. Where there had been basically two major players in the “consulting” world in the 1970s and earlier—the College Board and ACT—hundreds of firms exist today. Ask any chief admissions or enrollment officer and they will tell you that just about every day the inbox delivers another solicitation from firms that claim to have a solution for their enrollment challenges. “Those firms are really what I’m focused on in the book, and their influence, which has only grown with time,” said Burd.

Full disclosure: After a combined 85 years in admissions, financial aid and enrollment management on college campuses, we formed a consulting firm in 2020. While we will do occasional audits of institutional practices and procedures involving admissions, financial aid and marketing, our primary purpose is mentoring/coaching new deans of admission and vice presidents of enrollment. Our views here are based on our four-plus decades at highly selective private colleges and universities, not our four years as consultants.

We would agree that at most colleges—particularly those that are less selective and perhaps financially challenged—the practice of gapping (wherein need minus aid = a positive number) is extremely problematic and limits access and certainly degree completion. Burd and his colleagues rightfully assert that “unmet need” has become a significant issue for higher education, particularly for those lower-income students who are forced to borrow heavily if they choose to attend a college that provides them with insufficient financial aid. Gapping is also very difficult to justify from ethical and equity perspectives. It just does not seem right to award scholarships or grants to students whose parents could afford to pay full price while providing less aid than is necessary to meet the needs of low-income students. Yet many institutions do just that.

In our experience at colleges that commit to meeting full need, the leveraging of financial aid to impact enrollment is primarily aimed at optimizing the yield of students with low or no financial need by awarding a scholarship or grant that will influence their decision to enroll. We have found that this practice is typically not used to determine the amount of institutional grants awarded to individual students with need. Most enrollment managers we know are indeed committed to access and fully funding high-need applicants, even if some of them work at institutions that cannot (or chose not to) afford to do it. We must remember that presidents and trustees typically set financial aid policy for their institutions, not admissions or enrollment officers.

One could reasonably argue, though, that if colleges meeting full need did not award non-need “merit” scholarships, they could admit and provide scholarships to more low-income students. That would be true only if those wealthier students would enroll without any discount. For many institutions, awarding a $20,000 non-need scholarship toward a $60,000 tuition charge means that the college stands a good chance of enrolling a good student who will pay $40,000 versus not enrolling that student and netting zero. And that additional revenue helps to fund aid awards to needy students.

Burd and his contributing authors shed considerable light on the imperfect distribution of institutional financial aid. However, we believe that the shadow cast by the enrollment management industry is somewhat overstated. There are many factors contributing to the financial and educational access issues colleges face today, along with a public perception of the “decline” of higher education. Among them: dwindling demographics, which has placed enrollment management under the spotlight; high “list” prices; ever increasing wages and health insurance costs; a 36 percent gap between what deferred maintenance costs and what colleges can spend, impacting the “look” of a campus as well as the “bottom line”; the real or perceived under-employability of recent graduates; intolerance of certain viewpoints on campus; state and federal attacks on diversity, equity and inclusion and the curriculum … the list goes on.

In our judgment, there is little doubt that the proliferation of enrollment management consulting firms resulted from demand; colleges and universities clearly need to increase both enrollment and revenue. There are many factors influencing institutional financial health, student access and the academic success of students from all income levels but enrollment management provides an easy target for blame because low-income students at colleges that do not meet full need are disproportionately affected by those practices. Meanwhile, an institution must craft recruitment and enrollment strategies that yield the revenue needed to fulfill its mission with the requisite number of first-year students, and ultimately, of graduates, while keeping its commitment to access a major priority. Therein lies the rub.

If enrollment management consulting firms and current practices were banned from college campuses tomorrow, the issues for low-income students would still exist. It is time for the federal government to give higher education enrollment officers the legal ability to work together to address this challenge. It is also time for Congress to stop pointing fingers and, in discussion with higher education leaders, to address the underlying issues that will help all students with potential to successfully enroll in and graduate from college.