In Turbulent Times, 2 Small Colleges Brace for the Worst

They find strategies to keep enrollments up

About a year ago, Heidelberg College pumped up its spending for a new, streamlined scholarship program, and then promoted its simplified formula so that students would know how much they could get before they even applied.

It worked. Last fall this small, mostly residential liberal-arts college on a campus dotted with Collegiate Gothic buildings brought in the second-largest class in its 158-year history, and, more significantly, a net increase in tuition revenue. It is on track for similar success this year.

At Tiffin University, a newer, more-Modernist campus across town, enrollment has been at least as solid. Thanks to its distance-education program and 11 satellite campuses, Tiffin’s student population has risen by more than 50 percent over the past five years, far outpacing growth at other private or public colleges in the state.

Together, these two very dissimilar colleges — located at opposite ends of this town of 18,000 in the farm flatlands of north-central Ohio — present a living laboratory for the variety of experiments and strategies that many small, private colleges are now undertaking.

And perhaps none too soon.

Like hundreds of their tuition-dependent private counterparts across the Northeast and the Midwest, Heidelberg and Tiffin have been making moves to deal with the financial ramifications of the fast-approaching decline in the pool of high-school graduates. They have done so not only in their heightened focus on admissions, recruiting, and marketing, but also by adding academic programs to expand their appeal to more kinds of students. Heidelberg has also re-established connections to alumni that previous presidents and trustees had let languish for decades.

But neither Heidelberg nor Tiffin could foresee the downturn in the economy of Ohio, the collapsing housing market, a credit crunch that threatens to limit the availability of some student loans, and a volatile climate on Wall Street that could derail fund-raising goals.

And they certainly did not anticipate a push from Ohio’s political leaders to bolster public colleges, which could make those state institutions seem even more affordable than private colleges to cost-conscious families.

“The challenges are enormous,” says Richard H. Ekman, president of the 580-member Council of Independent Colleges. “You can’t economize yourself much further than many of these colleges have.”

Spared the Worst

For now, cautious optimism rules the day. Admissions officials at both institutions say they still expect their students to be able to obtain loans this fall. And so far, both colleges have been spared the unexpected hit of rising interest rates — Heidelberg has about $18-million of outstanding debt, Tiffin about $14-million — that has taken a bite out of the budgets of some other institutions.

And while some at Heidelberg are nervously wondering whether the economy will throw a wrench in its plan to raise a record $24.5-million in a forthcoming campaign for a business-school building, a recreation center, and other needs, campus leaders continue to sound an upbeat message.

“We seem to be riding smoothly through the larger national storm,” says F. Dominic Dottavio, the president, who for five years has steered Heidelberg along an academic and financial strategy designed to right an institution that had been listing.

For Tiffin, two key steps were doubling the number of graduate students over the past three years and expanding online courses that are popular with adult students. The diversity of the student body “really buffers us,” says Paul Marion, who has been president since 2002.

Still, there is no denying that these are precarious times, particularly for colleges in regions like this, where a sharp drop-off in high-school graduates is just a year away. “There is reason to worry that the margins are getting closer,” says Mr. Ekman, “and it’s going to be harder to survive.”

Unsurprisingly, both Tiffin and, more recently, Heidelberg have made strengthening their admissions strategies a central priority. Enrollment is the financial lifeblood of these colleges, as it is for all but the wealthiest of institutions.

Both colleges have invested in consultants, sophisticated software programs, and telemarketing services to help them classify prospective students by traits and interests. Armed with that information, the colleges have restructured their financial-aid programs and focused their admissions offices’ attention on the students most likely to enroll, using predictive models based on previous years’ experience.

Neither institution has much of an endowment to draw from — Tiffin’s is about $5-million, Heidelberg’s about $32-million — so from their perspective, the institutional aid is actually a reduction in tuition revenue per student.

Tiffin says the overall approach, which it now also applies to its growing graduate and online programs, has helped to better ration resources and increase the rate at which prospective students apply and then enroll.

“There’s a psyche,” says Cameron S. Cruickshank, vice president for enrollment management. “Some students and families get a big kick out of the fact that ‘Hey, I got a $10,000 scholarship.’”

For Heidelberg, which has struggled through periods of up and down enrollment for decades — currently it stands at 1,565 — the strategy involves offering undergraduate merit scholarships of $5,000, $7,000, and $9,000, based on students’ high-school grade-point averages and standardized-test scores.

The tuition reductions provided by those grants contributed to a tuition discount rate of more than 49 percent for last fall’s freshman class, notably higher than the 40-percent rate that many small private colleges report. But since the program drew nearly 100 more students than in the previous year, Heidelberg ended up with $700,000 in additional net revenue.

“That was the victory,” says Thandabantu B. Maceo, newly hired as vice president for enrollment and marketing.

Kathy Kurz, whose enrollment-consulting firm Scannell & Kurz Inc. advises Heidelberg, says a higher-than-typical discount rate, by itself, should not be alarming.

For institutions like Heidelberg, where capacity exceeds enrollment, “a discounted tuition is better than no tuition,” she argues, as long as campus leaders are confident that the higher aid offers are making the difference in getting students to enroll.

Heidelberg has made that connection, she says: “They’ve looked at their data and they know if they don’t offer at least that much, they’re going to lose net-tuition revenue.” The extra income has helped the college chip away at an operating deficit that it has battled for the past two years.

At Scannell & Kurz’s suggestion, Heidelberg also offers an automatic scholarship of $2,000 to every student who submits a financial-aid request. “We know we yield better on aided students,” says Juli Weininger, director of financial aid. Indeed, only about 3 percent of its students pay the full tuition of $18,190. The proportion is in line with practices at many other colleges with similar profiles.

But money isn’t the only lure. During its several organized visiting days, Heidelberg turns out scores of students and faculty members to show off its academic programs and social opportunities, including a regionally acclaimed student choir. The newly reformulated alumni association, too, plays a greater role in admissions recruiting. And, prodded by Mr. Maceo, even trustees are being asked to telephone admitted students and encourage them to attend.

“We want to get them to apply,” he says. “We want to get them to visit. We want to get them to deposit” and commit. Heidelberg admits about 70 percent of its applicants.

‘Late to the Game’

With the pool of traditional-age high-school students shrinking, Heidelberg is also moving to recruit more nontraditional students by establishing ties with community colleges, a strategy that is already familiar to Tiffin, which has established satellite sites on two-year campuses, among other locations.

“We were late to the game” for community colleges, says Mr. Maceo, who is pressing to make Heidelberg “transfer friendly.” Along with typical transfer agreements, Heidelberg announced plans in March for a dual-enrollment agreement with nearby Terra Community College. It allows students there to attend one class a semester at Heidelberg, at Terra prices, and participate in Heidelberg’s student activities. Terra gets the tuition, but Heidelberg hopes those students later enroll with it. The college, which is soon to change its name to Heidelberg University, is also looking to add two graduate programs to the three it now offers.

Although some states, like Arizona and California, expect growth in traditional-age college students, Heidelberg has no plans to actively extend its recruiting beyond Ohio. “Our brand is more or less a regional brand,” says Mr. Maceo. In fact, 90 percent of Heidelberg’s students come from Ohio.

Tiffin, by contrast, recruits both locally, for its residential campus that serves mostly undergraduates, and nationally, for the array of programs it offers online, including degree-completion programs and master’s programs in business and criminal justice.

Its president says the university’s carefully cultivated identity as a professionally focused institution, and its relationships with such distant organizations as the California Highway Patrol and the Los Angeles County Sheriff’s Office, have helped bolster enrollment. “We call ourselves a professional university,” says Mr. Marion. “There are plenty of liberal-arts colleges around.”

Unlike Heidelberg, Tiffin does not have a tenured faculty. Its 55 full-time faculty members work under contracts. Tiffin was founded by former Heidelberg employees in 1888 as a two-year business college. As recently as 2003, its enrollment was about 1,500. Last fall it brought in 2,349 students.

Most of the recent growth has taken place in programs away from the residential campus. But the facilities here are vital, says James J. White, vice president for business and finance. “The campus gives the institution credibility to the people who are someplace else,” he says. “We’re not a virtual university.”

Tiffin’s physical presence has also helped its fund raising. In the past 12 years Tiffin has built six buildings and expanded three others, including residence halls and the library. Local donors and corporations, rather than alumni, provided the bulk of the $30-million it took.

“People like to invest in places that are on the move,” says Michael A. Grandillo, vice president for development and public affairs. Some of the donors are local people who appreciate how nice the campus looks, he says.

Heidelberg officials acknowledge that it lags behind Tiffin somewhat in local support, but they say that is changing. The college’s neglect of its alumni has been costly in many ways, as well.

Mr. Dottavio has spent a lot of his time as president on the road, connecting with alumni as part of a rebuilding strategy. “You can’t separate where you’re going from where you’ve been,” says Mr. Dottavio, who will become president of Tarleton State University, in Texas, on August 1.

Rita M. Locke, vice president for institutional advancement, says her newly enlarged operation is trying to personalize fund raising at Heidelberg. In the annual-fund drive, she has restored the practice of using student callers rather than professional telemarketers.

“Non-donors who hung up on us before” are giving again, she says. Alumni also seem to appreciate the messages that students put into the pledge envelopes they send to follow up on the calls: The inserts are paper bookmarks with pictures of the callers and some of the things they like best about “the ‘Berg.”

In an era of billion-dollar campaigns, Heidelberg’s fund-raising ambitions are modest, but they represent a milestone for the college. Ms. Locke says the $24.5-million goal is realistic, even if reaching it takes longer than planned because of the economy. Some initial gifts in the silent phase, including $2-million toward the renovation of a building for the business school, give her hope. That donation, from a 1958 graduate, is one of the largest in the college’s history.

The business-school project is another key element of Heidelberg’s plan for the future. Business is the college’s second-largest major, behind English, but admissions officials found that many prospective students who were interested in business didn’t end up choosing Heidelberg. “We’re not maximizing our enrollment in one of our larger programs,” says Mr. Dottavio. College officials hope that a new building, coupled with a revamped business curriculum, will turn that around.

The president and other academic leaders here say Heidelberg’s commitment to its liberal-arts mission leaves it more constrained than an institution like Tiffin to make major curricular changes that might help it attract students or save money. Physics, for example, has very few majors, but the college wouldn’t think of dropping it. The same is true formusic composition and languages like German, given the institution’s historic ties. The college was founded by members of the German Reformed Church to educate German immigrants in Ohio and for 50 years has operated a study-abroad program at the University of Heidelberg, in Germany.

Belt Tightening

Still, academic programs on both campuses feel the squeeze of tighter budgets. Adjuncts teach about half of the graduate courses at Tiffin. At Heidelberg, the percentage of courses taught by adjuncts has risen from 20 percent to 30 percent in the past few years, although officials hope that is just a temporary fix.

Heidelberg still lays claim to its ability to offer small classes, but to save money it has increased its average ratio of students to faculty members, from 12-to-1 to 15-to-1.

And professors are hardly being rewarded for the extra burdens; pay levels at Heidelberg are among the lowest in the state. “People work here for reasons other than salary,” says David Weininger, vice president for academic affairs.

Professors say they are adapting to the belt-tightening, even if it means that the choir students’ repertoire comes largely from arrangements in the public domain, and that biology students learn about some metabolic processes by testing their own saliva rather than more-expensive enzymes. “It works, and it’s free,” says Pam Faber, a professor of biology. “I can still teach good science on a shoestring.”

Faculty members recognize that the college may have to make further compromises, including changes in the curriculum, to keep its mission alive. As Heidelberg becomes more reliant on transfer students, says Ms. Faber, “you can’t have classes that are so unique to the institution that prerequisites don’t exist anywhere else on the planet.”

Heidelberg and Tiffin now even collaborate on a program, using criminal-justice faculty members from Tiffin and laboratory courses and facilities from Heidelberg, to offer a degree in forensic science, hoping to capitalize on interest stirred by TV crime shows.

Mr. Dottavio says programs like that make sense for Heidelberg because they build on its strengths. Although he is leaving, he says the “stretch goal” he laid out for the college several years ago, of gaining financial stability by increasing enrollment to 2,000 by 2010, is still within reach. The college has started on the changes it needs, he says, and “we have other pieces on the table that will make us stronger.”

Mr. Marion is even more bullish. Within a few years, he says, Tiffin should reach its campus capacity of 1,200 students. As for online and off campus, he says, “there’s really no limit.”

http://chronicle.com Section: Money & Management Volume 54, Issue 35, Page A1