More on PASSHE & Cornell College, transfer pathways
PASSHE Enrollment Decline
We’ve been following the travails of the Pennsylvania State System of Higher Education (PASSHE) system and the release of 2020/21 enrollment data shows further declines, with 5.4% fewer students than 2019/20, counting both undergraduate and graduate programs. The Clarion and East Stroudsberg universities were worst hit while the struggling Cheney campus saw a rise in enrollment. West Chester University, in the past a reasonably selective institution and the system’s largest college, was approximately flat. This has led PASSHE to ask for an outsize increase in state aid. In our post on the recently approved system reorganization in July, we noted that the PASSHE schools needed to cut their prices, something which the system administrators implicitly acknowledged in one of their statements but were unable to implement. Absent price cutting, the system faces the prospect of a downward spiral. The 2020 enrollment cycle was obviously highly unusual, so we await data on 2021/22. But this latest news does not disconfirm our pessimistic outlook.
More financial innovation from Cornell College in Iowa
In August, we had noted a new program from Cornell College in Mount Vernon, Iowa (enrollment 997) that essentially established transparent pricing beyond residents of Iowa to those of other midwestern state. Earlier this month, Cornell announced a further move, a “debt reduction pledge” where the school would pay off half of selected students’ federal student loans up to a limit of $12,000, if they met certain criteria (including graduating in 4 years).
From Cornell’s perspective, the loan repayment only occurs after graduation. Besides the ultimate cost reduction for the 65 students benefiting in each entering class, the program is also a source of financing: the federal student loans are deposited with Cornell for several years. In essence, Cornell’s way of getting an interest-free loan for 3 to 4 years in the amount of about $750k. Back of the envelope, that will save Cornell about $150k in interest costs per entering class. The program is a clever financial trick, converting need-based aid into a financing source.
The linked newspaper article tries to summarize the pledge’s requirements, which are lengthy. So here’s a question: this in essence reduces prices for certain entering students. Why does the pledge need to be this complex, with multiple conditions attached to it and opaque criteria for which students qualify?
So let’s step back and broaden the perspective on this Cornell pledge.
Higher ed’s complex financial aid/discounting mechanism is a significant competitive disadvantage for the sector. While we understand the economic motivation for price discrimination – it is an effective way of increasing college revenues – it is perceived negatively by consumers. (This is an assertion as we don’t have a study supporting the position. If you know of one, please do us a favor and write us an e-mail.).
Tactical financial benefits of the pledge have no doubt been quantified by Cornell’s finance office, and the proposal’s cost presented with a more palatable net impact on its budget. But what about the strategic loss – the lack of clarity among Cornell’s base of student candidates and their families, with its negative impact on their propensity to enroll? That can’t be felt directly and is essentially unmeasurable.
While we applauded Cornell’s Freeway Scholarship program for making the school’s costs more transparent, this pledge is an example of the countervailing impulse, a technocratic design that is complex enough to make for eye-glazing reading even when summarized in a general interest newspaper story.
The Freeway Scholarship and the new debt reduction pledge neatly encapsulate a tension within higher ed between customer-friendly clarity and internally-focussed bureaucratic squirreling.
Transfer: Two developments
Among many developments intended to facilitate the transfer of graduating Associate degree students to 4-years, California and Indiana made two moves:
Indiana University (IU) and the state’s community college network, Ivy Tech, are adding to its guaranteed admissions agreements for specific Ivy Tech programs, which lead directly and seamlessly to certain IU majors.
In California, Gov. Gavin Newsom signed into law a bill requiring the Cal and Cal State systems to establish a “joint singular lower-division general education pathway for transfer” and requires state 2-year colleges to place students declaring an interest in a Bachelor’s on a pathway to accomplish this. A second bill also signed into law instructs the 2-year colleges to harmonize their course numberings to facilitate transfers into 4-year programs.
The devil will be in the execution. We wish California and Indiana well as they tackle the thorny transfer problem.
Read this post and others at our CTAS Higher Ed Business blog on Substack.
Gov. Gavin Newsom signing the legislation at Cal State Northridge.