Pre-COVID Higher Ed: LSU responds to a disappointing 2017 cycle
In previous looks at the University of Alabama and the University of Mississippi, we had seen how both schools experienced enrollment shocks, Mississippi in 2017, Alabama in 2018. Each time, the institutions reacted with a mix of price discounting and relaxing their admissions standards. Some readers will have taken this in and wondered whether more and better marketing could counteract competitive pressure. One of the nearby big state flagships, LSU, in fact reacted to a negative cycle by overhauling their marketing and enrollment.
A 2017 Wipe-out
Like the University of Mississippi, LSU had a bad 2017 cycle.
Entering class size fell:
Mostly due to in-state students but there was also a decrease in out-of-state recruitment (down about 120 students).Controversial LSU President, King Alexander, who was to depart the school in 2019 and then be dismissed from the equivalent position at Oregon State for Title IX irregularities occurring during his stint at LSU, reacted by appointing a new enrollment head, Jose Aviles. Aviles, who had earlier on in his career worked at the University of Delaware, a northeastern “Importer”, modernized LSU’s enrollment backoffice and overhauled the marketing organization, including assigning enrollment officers to specific high schools to deepen the school’s relationship with staff and students. The ACT was also made optional in 2019. These changes paid dividends and applications jumped in 2018.
The university was able to tighten admissions percentages marginally as applications increased. This tightening is a significant win for LSU; through its improved marketing, it avoided the rising admissions rates that typically follow in the wake of enrollment declines.
Increased applications combined with a static admissions rate of course means that LSU in absolute terms admitted far more students in 2018 than previously.
Together with improved marketing, LSU also resorted to that time-tested way of improving enrollment: steeply increasing the financial aid budget.
The 2017 admissions shortfall may be attributable to a large topline tuition increase occurring for the 2016 cycle, when in-state cost of attendance (COA) went up a jarring 12% vs. 2015. You’ll see from the financial aid chart above that this COA increase was not offset by discounts, so it marked a real price hike.
The increased financial aid was showered on both Louisiana residents and out-of-state students. LSU put a lid on overall price increases after the 2016 price hike (measured using Average Net Cost):
Flat pricing extended to out-of-state students, per CTAS estimates:
The surge in applications and admitted students in turn led to a deterioration in yields, a pattern seen at Alabama and Mississippi, but for LSU it was a manageable one:
This 10% decline from 2015 to 2020 is fairly large but LSU enjoyed materially better yields than Alabama and Mississippi after they had responded to their setbacks (both Bama and Ole Miss had yields in the low 20% range in the cycles right before COVID-19). As readers well know, yields have been declining on a secular basis throughout higher ed so LSU’s decline, while larger than average, can be considered a win given the university’s competitive situation.
It’s official: LSU is hot
The combination of intensified marketing, increased financial aid and modified testing requirements led to enrollment success:
Not surprisingly given Aviles’ history, the increased enrollment effort also included recruitment of out-of-state students.
2020 out-of-state enrollment continued to expand, with about 1,850 non-residents coming aboard (informal estimate). Given our finding that the market for out-of-state students for the large public universities in the South is largely static, LSU’s surge between 2017 and 2020 is a meaningful change to the market and will force a response from nearby large public universities.
(Data for out-of-state enrollment in 2021 has not yet been released.)
Earlier in this series, we pointed to the entrepreneurial spirit seen in southern public universities and examined how the large publics in Alabama and Mississippi had each crafted a different business response to a challenging demographic condition in their home territory and a tight, competitive market for out-of-state students.
LSU responded extremely vigorously to its 2017 setback, taking an approach different from Alabama, Mississippi and Mississippi State. Its approach was to:
- Overhaul the management of the enrollment process and
- End the minimum ACT score cut-offs used in the past, causing an
- Increase in the overall number of applications and acceptances.
- Increase financial aid to keep prices flat and maintain yield.
The final result was an increase in both in- and out-of-state enrollment. We expect the architect of this resurgence, Jose Aviles, to be a very hot name in higher ed management. This is a notable success in a tough climate.
Large southern public universities have executed a variety of business responses to pre-COVID market pressures. Our final piece on the southern pre-COVID market, we will look at an outlier, the University of Southern Mississippi in Hattiesburg. Southern Miss is smaller than the large flagships we have been examining but it has crafted its own response to the enrollment landscape, one that deserves a closer look.
You can also find this piece and other materials at the CTAS Higher Ed Business Substack.