Yglesias linked this article the other day (like, two weeks ago), and it is a must-read for anyone who wants greater insight into the clandestine world of higher-ed economics. The timing of this find is impeccable, considering the Lamp’s recent administrators-aren’t-all-they-seem-to-be bent. Quirk’s article focuses on the widespread practice of financial aid leveraging, which he illustrates with the following model:
Financial-aid leveraging is the enrollment manager’s secret weapon. It has become highly sophisticated since it was first developed, in the 1980s, but the underlying logic remains simple: targeting financial aid will further the interests of a school, typically by bringing in more net revenue or higher-scoring students. Take a $20,000 scholarship—the full tuition for a needy student at some schools. Break it into four scholarships of $5,000 each for wealthier students who would probably go elsewhere without the discounts but will pay the outstanding tuition if they can be lured to your school. Over four years the school will reap an extra $240,000, which can be used to buy more rich students—or gifted students who will improve the school’s profile and thus its desirability and revenue.
The financial aid office is in many ways the perfect mechanism for such a scheme. Its mission, unlike that of other administrative offices, is clear and its benefits are immediately tangible; people trust them. Of course, in the contemporary cut-throat industry that is higher-ed, no advantage is left unexploited.
The fulcrum of the practice of financial aid leveraging lies in the office of the enrollment manager, a position that has been gaining increasing traction in universities around the country. Indeed, our very own fair institution has one, though its website is conspicuously sparse– no supplementary information, no names, just a phone number and a juicy reference to student affairs. Read a little bit further into Quirk’s piece, however, and it becomes clear why those who fill the enrollment manager position are keen to stay behind the scenes:
With their ever-expanding reach, enrollment managers are inevitably dogged by controversy. But it’s the way they have changed financial aid—from a tool to help low-income students into a strategic weapon to entice wealthy and high-scoring students—that has placed them in the crosshairs of those who champion equal access to higher education. Adopting data-mining and pricing techniques from the airline and marketing industries, they have developed a practice called financial-aid leveraging that allows a school to buy, within certain limits, whatever class it wants. Often under orders from a president and trustees, enrollment managers direct financial aid to students who will increase a school’s revenues and rankings. They have a host of ugly tactics to deter low-income students and to extract as much money as possible from each entering class. [emphasis mine]
Naturally, this raises the following question: is Arizona’s enrollment plan (if such a thing even exists) as evil as Quirk claims such plans can be? Taking a look at the Freshmen enrollment data since 1997, there are only a few discernible, statistically significant trends that pertain to enrollment.
1) The steady increase in the size of incoming freshman classes
2) The increase in minority enrollment, and in particular the increase in Hispanic student enrollment as a percentage of total class size.
We’ve spilt plenty of ink on both of these issues, particularly the former. ABOR’s 2020 vision is a virtual mandate to ratchet up the number of degrees “produced” in universities across the state, but, instead of addressing poor graduation rates, the UA has decided to follow the ASU route. That is, increase class sizes and just play the percentage game. In regards to the latter, it’s certainly no secret that the UA covets the federal HSI (Hispanic Serving Institution) label and its accompanying Title V funds. The HSI designation, as we’ve pointed out before, is based purely on enrollment numbers (the magic number here is 25% of the incoming class), and therefore artificial; It bears no reference to the graduation rates of those students or the institutional and cultural support available on campus, meaning UA could still be the recipient of those federal funds even if the graduation rates for those very same students continues to languish behind the overall rate. And herein lies the danger. We might not be playing the UA News game, where National Merit Scholars, reputation, and graduation rates reign supreme, but we are clearly playing a game, and its effects are deleterious all the same. For example, while we don’t have access to student debt levels by ethnicity or SES, we do know that in a 2010 survey of 569 higher ed institutions, Forbes placed UA at 383. Here’s Forbes’ methodology:
They based 25 percent of their rankings on seven million student evaluations of courses and instructors, as recorded on the Web site RateMyProfessors.com. Another 25 percent depended upon how many of the school’s alumni, adjusted for enrollment, are listed among the notable people in Who’s Who in America. The other half of the ranking was based equally on three factors: the average amount of student debt at graduation held by those who borrowed; the percentage of students graduating in four years; and the number of students or faculty, adjusted for enrollment, who have won nationally competitive awards like Rhodes Scholarships or Nobel Prizes. CCAP ranked only the top 15 percent or so of all undergraduate institutions. [emphasis mine]
It’s worth noting that, according to the Chronicle of Higher Education, Forbes also takes into account student loan default rates. Granted the level of debt after graduation only comprises around 16% of the overall ranking, but the point remains all the same that, while the UA is certainly concerned with enrollment, the fiscal health of the lucky few who do end up eventually graduating seems to be a secondary concern at best. For more evidence, look no further than the Mac Scholar program. Although we are still low on details (our records request is still in the works), we do know that the the primary motivation behind the scholarship program is its cost-saving potential. After all, giving underprivileged students Apple products is much cheaper than granting them annual, renewable financial aid.
Whether or not the UA’s enrollment plan explicitly calls for erring on the side of over-enrollment at the expense of the students’ futures is too bold a claim, but it does certainly seem like it’s a case of “shoot first, ask questions later.”