College 2005 November 2005

The Best Class Money Can Buy

The rise of the "enrollment manager" and the cutthroat quest for competitive advantage. The secret weapon: financial-aid leveraging

Several of Seton Hall's trustees attended the school in the 1960s, when it served blue-collar "good Catholic families from New Jersey," as Tom Green puts it. The school has since become far more selective, and more expensive. "Today we're a top-tier, national, major Catholic university in the United States," Green says. "They love that. But they hate the fact that we're now too expensive and too selective to serve working-class blue-collar New Jersey families who are first-generation. I'm happy to do either, because I see the benefit of both, but there's not enough money to field both teams."

Stanley Henderson, a former aacrao president and currently vice-chancellor at the University of Michigan—Dearborn, says that even tempting the leadership with these tradeoff tables is unethical. "It's the charlatans who will present this in a way that says, 'We can give you whatever you want and here are the data that show you what we can do,'" he told me. Instead, Henderson argues, the enrollment manager should balance the demands of the marketplace against the values of the institution and go to the president and trustees as an advocate for the best possible compromise.

But enrollment managers are often effectively ordered to squeeze more money out of poor students—"to nickel and dime these families making $48,000 a year," as Zucker puts it. Their continued employment depends on meeting specific goals. "You're only as good as your last fall's enrollment," Kalsbeek says. "You're wanting people to take this grand, principled, big-picture perspective on their work, but holy shit, you miss your target and you're gone."

The enrollment managers I spoke with weren't blind to where this was all heading, and the populations they were leaving behind—North Jersey's blue-collar families, Alabama's blacks and rural poor—were very much on their minds. Roger Thompson's university isn't yet so selective that he has to cut off poor but able students—and, he told me, "I don't really want to get there. I still want that kid from Jackson, Alabama. His father's a truck driver making seventeen grand a year, and no one's graduated from high school in the family, and the kid's got a twenty-four, or let's say a twenty, ACT. I want that kid to have a chance."

Only the most ruthless single-mindedly pursue profits or prestige at the expense of low-income and minority students. "It's really up to the institutions," Heffron says. "Many schools will tell us, Even though we can get fewer needy students to come, that's not what we're going to do. We're not cutting everyone until they squeak." Many schools mix the merit and need-based approaches, using the techniques simply to guarantee that they have enough students and revenue to stay afloat. And although competition increasingly threatens a university's principles, the most innovative work in the profession comes from enrollment managers who attempt to align market with mission.

David Kalsbeek, for instance, has an impressive record: DePaul is now the largest Catholic and the eighth largest private school in the country, and it's home to a top-ranked M.B.A. program. But those successes, built by Kalsbeek's formidable corporate tools and overseen from his corner office high above downtown Chicago (his 175-person division resembles a small consulting firm), allow the Vincentians to underwrite the school's commitment to educating poor first-generation Chicago students, rather than scrambling up the U.S. News rankings.

"No margin, no mission" is the watchword at DePaul. By expanding its profitable professional programs and slowly improving its faculty, campus, and marketing to attract more students, especially full-pays, the school has brought in enough revenue to enroll more low-income students. As a result, 26 percent of undergraduates have family incomes below $36,000, and 38 percent are the first in their families to attend college.

Tally Hart, a veteran advocate of need-based aid at the national level, is another enrollment manager who has found that the demands of ethics and the marketplace can pull in the same direction. When she joined the enrollment-management team at Ohio State University, she says, "My friends thought I just checked my morals at the border. I honestly don't think that many people thought about how enrollment management might be used for optimization of other things, like needy students." OSU was one of the first public schools to adopt the financial-aid leveraging (Hart prefers "management") techniques developed for private schools, but it retooled them to improve economic diversity and academic quality, not just revenue. Even merit aid can make college more accessible to the poor, if the additional revenue it generates is funneled back into need-based aid. When I asked which tradeoffs she faced, Hart replied, "None." Precise recruiting lets her find students who will increase socioeconomic diversity and academic quality, and also bring extra revenue in the form of state grants for low-income students. With those additional funds (which vary enormously from state to state) low-income students can actually bring more net revenue than their richer peers.

More-advanced enrollment managers also tend to focus as much on retaining admitted students as on deciding whom to recruit and accept. They smooth out administrative hassles, guarantee at-risk students the advising and academic help they need, and ensure that the different parts of the university's bureaucracy work together to get students out the door with a degree. The more schools consider how students will fit in and succeed, the less likely they are to gap them excessively or bribe them to come—practices that tend to hurt graduation rates (and rankings).

Admittedly, using enrollment management responsibly—finding the right students for each school and graduating them successfully—requires more hard work than simply hiring consultants to chase wealthy and high-scoring students. But the challenge is what people like Kalsbeek and Hart find appealing.

"All the acclaim in law goes to the lawyer who wins the unwinnable case, in medicine to the doctor who cures the incurable disease," Kalsbeek says. "In higher education it's the people who enroll the best and the brightest and then manage to graduate them?

"I had a conversation with an institution not too long ago that was interested in having me come on board, top tier. They wanted a larger share of their freshman class to have them as first choice, rather than as a second choice to an Ivy-caliber competitor. Why would you even get out of bed in the morning?

"We need places like that—we just don't need any more."

Nevertheless, competition draws a growing number of schools to the ugly side of enrollment management. "If you're sitting out there, you're not Harvard, and your competitors are offering merit-based aid, you've got to compete," Heffron says. "If you don't, you're going to fall on your moral sword."

The process only gets more intense each year. In April, as students are making their decisions, admissions officers grow anxious about whether they will hit their numbers. Kalsbeek relates an anecdote about a colleague, Jim DiRisio, the director of admissions at St. Bonaventure, who was serving in Iraq as a major in the Army Reserves. Being stationed in Baghdad, DiRisio said, provided the first time in ten years he had gotten a good night's sleep in April.

The most elite schools, cushioned by their wealth and the huge number of applications they get each year, have remained somewhat above the fray, maintaining strictly enforced firewalls between admission and financial aid. But they, too, use "preferential packaging" to give larger grants to more-desirable students. And the commitment to meeting need at some of these schools is under threat.

"The dilemma is you have this small number of institutions committed to need-blind admissions and need-based financial aid only," says Ronald Ehrenberg, an economist and a former vice-president at Cornell who studies higher education. "There can't be any more than twenty or thirty. Now we have these institutions that are a little below us in the prestige pecking order aggressively pursuing a merit-aid strategy. And the question is, How long will places like Cornell be able to continue to maintain these sets of principles?"

USC, Carnegie Mellon, Tulane, Washington University in St. Louis, NYU, Syracuse, Boston College, and Boston University are among the highest-profile schools committed to ambitious enrollment-management strategies. Other schools are being forced to adopt enrollment-management practices to hold their position, or just to survive. Gordon Winston receives pleading calls from colleges: A small, well-known liberal arts school finds that its best prospects are being poached by other colleges' enrollment managers, so it parries by adopting the same tools. A Catholic school in Brooklyn also finds that students are being lured away, but it is simply too poor to do anything about it.

More and more, schools are chasing the small number of students who have the money or the test scores that help an institution get ahead. As those students command higher and higher tuition discounts, they leave a smaller and smaller proportion of the financial-aid budget for poor students, who are increasingly at risk of being left out of higher education.

"This '05—'06 cycle, it's brutal," Brian Zucker says. "I can't believe the ridiculous competing offers that I'm seeing out there. The arms race has gone completely unchecked. Institutions are still not getting it. I'm seeing it from all kinds of schools. Schools that really surprise me that they're playing these games, because I thought they were better than that and I thought they had the bigger picture. But I guess not."

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Matthew Quirk is an Atlantic Monthly reporter-researcher.

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