Blog Viewer

School Rightsizing: By Default or Design?

By Jeffrey Shields posted 08-06-2019 08:36 AM

  

CEO Notebook |

Intentionally lowering school enrollment may allow your school to budget soundly and spend more time preparing for the future.

Jeff Shields
Jeffrey Shields, FASAE, CAE
NBOA President and CEO

Last month I had the pleasure of speaking at the EMA Heads Institute on the topic of independent schools’ changing tuition models. Since last year, NBOA has partnered with EMA to help schools understand our current competitive environment and, when necessary, reimagine pricing and discounting strategies to optimize both enrollments and financial resources that support world-class education.

That’s why a recent article about The George Washington University’s goal to downsize caught my eye — locked it in place, in fact. Administrators intend to reduce enrollment by 20% over the next five years under the mantra of “better, not bigger.” Strain on facilities, faculty, staff and services are motivating factors, but still, it is a bold move for an institution that depends on tuition as much as any private university, college or independent school.

Jump points out the term “rightsizing” can used to mask unplanned enrollment decline, but he was willing to give GW’s case closer consideration – as am I.

It’s worth noting that the article’s author, Jim Jump, is not only academic dean and director of college counseling at St. Christopher's School in Richmond, Virginia, but also the past president of the National Association for College Admission Counseling. Jump points out the term “rightsizing” can used to mask unplanned enrollment decline, but he was willing to give GW’s case closer consideration – as am I.

In GW’s case, the goal of reducing students is to help ensure quality. Following years of dedicated enrollment expansion, GW’s president recognizes that the university can’t serve so many students and maintain high quality education. We will have to wait and see how this strategy of rightsizing by design plays out at a competitive higher education institution.

For many of our schools, the reality is perhaps slightly different. Far too frequently, I hear from school leaders that their school is a “450-student school” or a “700-student school,” and yet they have not had that level of enrollment for years. It is critically important to build a budget around an achievable enrollment number. Otherwise, the school must continually address the financial gap through expense management and revenue generation over the school year.

Come September, when I return to speaking and visiting with business officers and schools across the country, the first question I will ask is, “How are your enrollment numbers for the year?” The answer to this question tells me whether the business officer will have the opportunity to focus on strategic goals with the head of school and board of trustees or spend the year chasing dollars to make up for the enrollment shortfall.

“Better, not bigger” might be appropriate for your school too – and may be easier and more effective if it happens not by default, but design.

I fully support earnest and strategic efforts to stabilize or grow a school’s enrollment. In fact, that’s what many schools are doing by implementing tuition-pricing models such as indexed tuition, tuition resets and the like. If you are chasing an enrollment target that your school has not achieved in recent years, however, is it time to rightsize?

For many schools, a difficult conversation about achievable enrollment with school leadership and the board not only helps educate and inform key stakeholders on the realities of contraction in many marketplaces, but also allows them to implement a long-term and achievable financial plan that will ensure a school’s financial health and deliver on its mission for generations to come.

As Jump rightfully points out, myriad important financial and staffing decisions will follow a commitment to reduce enrollment by 20%, but from where I sit, these decisions are already being made. “Better, not bigger” might be appropriate for your school too – and may be easier and more effective if it happens not by default, but by design.

jeff shields signature
Follow NBOA President and CEO Jeff Shields @shieldsNBOA.
From Net Assets NOW, August 6, 2019. Read past issues of CEO Notebook.

Sign in to leave a comment