Colleges and universities reigning in costs as enrollment and retention change

With fewer students to draw from due to changing demographics and the pandemic leaving many families struggling, colleges and universities are reining in costs and freezing or cutting tuition to be more competitive.

The pandemic exacerbated trends that were already in place, including lower revenue from shrinking enrollment, lower retention of existing students and fewer students using on-campus room and board, says Joseph Morone, chair of the University System of NH (USNH) board of trustees.

Morone spoke at a Business and Industry Association webinar in April on the topic of merging with the Community College System of NH (CCSNH). The merger is off the table for now.

In April, USNH, which includes the University of NH, Plymouth State University, Keene State College and Granite State College, announced it would be freezing tuition for in-state students for the 2021-22 academic year, the third consecutive year USNH has frozen tuition. Morone says the trustees are deeply concerned about the long-term financial viability of public higher education in NH as it is currently structured and the challenges it faces, including lower revenue, higher costs and the lingering effect of COVID-19.

Based on data prepared in 2017 by then chancellor of CCSNH, Ross Gittell, high school student populations in the U.S. are expected to decline 5% by 2032, while the Northeast is expected to see a 12% decline. New Hampshire is projected to see a decline of 26%.

The graying of NH has been driven in part by demographics, as many baby boomers find NH a desirable place to retire and in part by policies that have discouraged housing for young families, leading to steady declines in school enrollment.

New Hampshire is also exporting nearly 60% of its current high school graduates, says Morone, making it first in the nation for the percentage of high school students who leave the state for their college education. “From the perspective of an employer, that’s exactly where we don’t want to be because it’s a lot harder to recruit them back,” he says. “As the pool of students shrinks, competition among schools becomes more severe, leading to an out-and-out price war in the form of escalating offers of financial aid.”

Michele Perkins, president of New England College, with campuses in Henniker and Manchester, says changing demographics are no surprise.

“We have seen this coming for some time and began marketing and recruiting to places outside New England. We still draw most of our students from New England and the eastern seaboard, but we have also developed markets in Florida, Texas and parts of the South and the Southwest where population is actually growing,” says Perkins. “The bulk of that population growth is in minority populations, specifically Hispanic. We have the highest percentage of students of color in New Hampshire at 36%.”

Diversifying its student base and attracting students outside of its usual geographic reach has allowed New England College to maintain and grow its enrollment, while offering a robust and quality academic program, says Perkins. She admits it is not easy to establish a presence outside the region without the name recognition of Harvard or Middlebury.

She says the diversity of NEC works in its favor. “When we do attract students of color from other parts of the country and they visit the campus, they see there are a lot of other students like them,” Perkins says.

She says even though the net price for private school tuition has not changed much over the past five years, that doesn’t mean it is cheap, especially for families that have lower income or first-generation students. “We have a very generous scholarship grant program; we give out over $25 million a year to our students so that they can afford to attend New England College.”

New Hampshire in-state tuition is the second highest in the country for both 2- and 4-year institutions, says Morone. “We’re entering this crisis at a point where we simply can’t raise tuition. It is absolutely out of the question; our tuition is already too high.”

Cathy Provencher, USNH chief administrative officer, says a commitment from the state to flat fund its support for USNH at $88.5 million allows the system to freeze tuition for in-state students through fiscal year (FY) 2023, making it a four-year freeze.” The state funding accounts for about 11% of the total USNH budget, with the entire allocation used to offset tuition for in-state students or support state-mandated services such as the Cooperative Extension.

Limited options for increasing revenue means finding ways to lower costs in a system that claims it is already cost effective. Provencher says analysis by the U.S. Department of Education shows USNH has the lowest administrative cost per student in New England.

Yet the system is finding areas to cut costs. “The board and the presidents agreed, collectively, we have to aggressively downsize the system,” says Morone, noting they are cutting costs by 10%. Provencher says the streamlining began before the pandemic but has been accelerated by the increased financial pressures. Part of that streamlining is a reduction of approximately 500 faculty and staff positions through voluntary separation and early retirement.

“We were undergoing ways to restructure all of the administrative, back-office work and well on our way. Our campuses are working closely together to collaborate on programs across the system,” says Provencher. “This will be going on for many years as we look at ways to rethink academic program delivery and administrative work. The pandemic increased the urgency, but we knew this was coming.”

Dr. Susan Huard, interim chancellor of the Community College System of NH (CCSNH), says community colleges are always focused on affordability. “This year, we have millions of dollars in federal funds – grants, not loans – available to students whose families have been affected by the pandemic, so this is absolutely the right time to enroll,” says Huard. “We can help students with all kinds of expenses, not just tuition but also technology costs and other emergency needs that they face because of COVID-related disruptions.” Huard says CCSNH has the lowest tuition in the state, and the board approved a tuition freeze for the upcoming academic year.

Southern NH University (SNHU) in Manchester extended its 10-year tuition freeze for its online programs through 2022. The tuition freeze, which will keep online tuition at its 2011 rate, applies to all online course-based programs offered at SNHU.

For students attending on campus, the rates have been lowered from more than $30,000 a year to $10,000 to $15,000 depending on the program the student chooses, says Jodi Abad SNHU associate vice president student financial services.

“We have definitely known for quite a while that a campus-based education is out of reach for many families, even before the pandemic hit,” says Abad. “But the pandemic and unstable economy accelerated some of our plans at SNHU.”

Rivier University in Nashua has followed a set of strategic initiatives for a number of years to increase affordability: offer a competitive base tuition, provide scholarships and set a shorter time to completion, says Sister Paula Marie Buley, president.

Buley says Rivier is in the lower third of tuition among private institutions in NH and Massachusetts. “It’s important to start with a very affordable published rate,” she says. “If families have that lower tuition rate to begin with and we increase it by 2%, it has much less of an impact than an institution with a higher base. Part of our mission is providing access; it is one of the noble distinctions of American higher education: that all are welcome.”

Financial aid funded by USNH has increased from $119 million in FY 2016 to a projected $161 million in FY 2021. While the published undergraduate tuition rate is between $14,638 and $18,938, the average net tuition (the price a student pays after all financial aid is calculated) has held steady at about $11,000.

“Net tuition has remained very stable since FY ’16,” says Provencher. “It may actually decrease as we increase aid without increasing tuition.”

The Granite Guarantee program, which makes it possible for qualified students to attend tuition free, amounted to about $18.8 million in FY ‘21. The average award is about $9,000, says Provencher.

These articles are being shared by partners in The Granite State News Collaborative. For more information visit collaborativenh.org.