Tag: Colleges

  • How many colleges are there anyway? Version 2022

    How many colleges are there anyway? Version 2022

    I’ve always been fascinated by the idea of “colleges.”  We think we know what we mean when we say it, but do we really?

    When some people say “college” they might mean any four-year college that enrolls undergraduates.  Others might mean everything except for-profit colleges.  Do you include community colleges in your group?  Some people do, and others don’t.

    And of course, I’d be remiss if I didn’t point out that when some major news outlets talk about “college” they are really talking about the 15 or  50 institutions their readers or listeners fascinate over.

    Well, now you can see the answer.  Sort of.  I started with IPEDS data, which includes all post-secondary institutions that receive Title IV aid.  There are many institutions in the US that don’t and although they can report to IPEDS, they are not required to, and many don’t.

    But if we start with all the IPEDS institutions that enrolled at least one student in 2022, you get 5,978.  And that’s where the fun begins.  

    There are two quick views here.

    The first view (using the tabs across the top) shows several common ways of breaking colleges into groups: By region, Carnegie type, and control, for instance.  It’s not interactive, but you can see how your concept of colleges might be too small.

    The second tab makes up in interactivity what the first tab missed.  Use any of the filters to filter to the number based on your definition: Some of the filters are discrete, some are numeric ranges.  Any combination is fine, and the pink bar will update automatically with the new count.  Be sure to read the instructions at the bottom about how to use the discrete filters.

    Anything jump out at you here? Leave a comment below.

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  • Colleges that might close soon

    Colleges that might close soon

    OK, I admit it.  That headline is clickbait.  I have no idea which colleges might close in the near future, but I want to take a look at the problem from 30,000 feet.

    This is prompted by the recent announcement that Eastern Nazarene College in Massachusetts will close. It comes on the heels of several other announcements like this over the past few years.  And of course, because we’ve become accustomed to colleges surviving for long periods even during bad times, the surprise makes people wonder who’s next.

    The meta-answer will surprise you: While we of course feel bad for the people who lose jobs, the students who are displaced, and the community that finds itself dealing with the loss of a respected institution, these trends are small blips in the industry.  In fact, the institutions most likely to close (probably) collectively account for a small fraction of enrollment at America’s colleges and universities.

    Follow along.  

    One of the challenges in talking about this is the graduate/undergraduate split in enrollment (enrollment is complicated, y’all) and the wide range of different types of missions in higher education.  Some small institutions are completely undergraduate, while some are mostly graduate.  Some institutions are heavily supported by outside money from a congregation or donations (think seminaries or other religious institutions), and still others are small by design, often because they have enormous endowments and/or highly focused missions.

    But here is the hypothesis, and the data to give you some perspective on it.  

    Let’s suppose that colleges in danger of closing are very small, in either total enrollment or undergraduate enrollment.  Some of those, as I suggested, aren’t in danger but we’ll leave them in for the sake of simplicity.

    I took all four-year private colleges, since public institutions rarely close purely for financial reasons, and for-profit college closings happen frequently, without much fanfare.  And I grouped them by undergraduate and graduate enrollment in 2022, and arrayed them on a grid.  The values across the top break institutional graduate headcount enrollment into groups and the values down the left-hand column breaks them into undergraduate enrollment by that measure. 

    This is what the grid looks like. Click to expand:

    Let’s get draconian, and say that in the not-too-distant future every college in the second and third row will close: That is, those colleges with undergraduate enrollment of at least one student, but fewer than 1,000, regardless of graduate enrollment. All 687 of them will close. 

    If that happened tomorrow, it would displace about 268,244 undergraduate students, or about 9.5% of all undergrads enrolled in those four-year, not-for-profit institutions.  Not a small number or percentage.  Again, these are real people who feel the results of those decisions.

    But of course, four-year not-for-profit institutions are a small sliver of college students in America. All told, in the Fall of 2022, there were 15,964,998 undergraduate students enrolled across all types of institutions.  If we were to lose all of those 687 institutions and all 268,244 students, it would represent 1.7% of all college students nationwide.

    Again, not insignificant if you’re one the students affected.  But do we believe that we will see 687 closures in the coming years?  I suppose some people do.  I don’t. And if you don’t, you’ll realize the net effect will probably be much, much smaller than you might have anticipated.

    So when you hear about colleges closing, you should feel bad for the people affected.  But take a look at the data before you make rash pronouncements about higher education in general.

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  • First-year student diversity in American colleges and universities, 2018-2022

    First-year student diversity in American colleges and universities, 2018-2022

    I started this visualization to show how first-year classes at the highly rejective colleges had changed since COVID-19 forced them all to go to a test-optional approach for the Fall of 2021.  But it sort of took on a life of its own after that, as big, beefy data sets often do.

    The original point was to help discount the conventional wisdom, which is propped up by a limited, old study of a small set of colleges that showed test-optional policies didn’t affect diversity.  I did this post last year, after just one year of data made it fairly clear they did at the institutions that had the luxury of selecting and shaping their class. 

    This year I took it a little farther.  The views, using the tabs across the top, show the same trends (now going to 2022) for Public Land Grants, Public Flagships, the Ivy and Ivy+ Institutions.  In each case, choose one using the control.

    Note that I had colored the years by national trends: 2018 and 2019 are pre-test optional, gray is COVID, and blue is post-test optional.  This is not to say that any individual college selected either required tests or went test-optional in those years, but rather shows the national trend.  And remember these show enrolling students, not admitted students, which is why gray is critical; we know COVID changed a lot of plans, and thus 2020 may be an anomalous year. 

    The fourth view shows where students of any selected ethnicity enroll (again, use the dropdown box at the top to make a selection); the fifth view breaks out ethnicity by sector; and the final view allows you to look at diversity by sector and region (to avoid comparing diversity in Idaho, California, and Mississippi, for instance, three states with very different racial and ethnic makeups.)

    On all views, hovering over a data point explains what you’re seeing.

    If you work at a college or university, or for a private company that uses this data in your work, and want to support my time and effort, as well as software and web hosting costs, you can do that by buying me a coffee, here. Note that I won’t accept contributions from students, parents, or high school counselors, or from any company that wants to do business with my employer.

    And, as always, let me know what jumps out at you here. 

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  • First-year Discount rate at private colleges, 2021

    First-year Discount rate at private colleges, 2021

    This is always a popular topic, but the subject is misunderstood.  I want to talk about discount rate at private colleges.  

    IPEDS has the best data on first-year (or freshman) discount, so that’s what I visualize.  And the first part of this is going to get a bit into the weeds; if you work in a private college or university, and you use this in your work, or you send it to trustees, you can support my time, effort, software, and hosting costs by buying me a coffee.  If  you don’t want the details, and you think you understand this concept, feel free to skip down to the section that breaks down the views, below the line of asterisks.

    For those who always ask, no, I don’t do this for public universities.  It may be helpful to compare institutions within a state, but beyond that, state funding models and the mix of resident and nonresident tuition rates make comparisons across borders mostly meaningless.  And for the more knowledgeable who might wonder, I assume that all institutional aid is unfunded; that is, it’s not coming in as a revenue stream from an external source to provide funding.

    Let’s do an exercise to help you understand discount: Suppose you run an ice cream store, and you have more ice cream than you can sell.  You might offer a coupon, let’s say for 50% off a cone.

    The cone you normally sell for $4, you now sell for $2.  You just take less money for it.  There is no one there to hand you two extra dollars to make up for the gap.  The Department Store store down the street sells a very similar cone in its food court for $8, but offers a 75% off coupon.  They decide to take $2 for the cones they sell in order to be competitive with you.  

    The Gourmet Ice Cream Shop around the corner sells cones for $12, because they think their ice cream is much better, their store nicer, and their location more convenient to the subway station.  On occasion, they will tell the kids at the orphanage they’ll give them a free ice cream cone, but everyone else pays.  And finally, Mel’s Fair Deal Ice Cream store sells ice cream cones for $2.50, but never offers coupons.

    If everyone uses your coupon, your store has a discount rate of 50%, and your net revenue per cone is $2.  But of course, some people will pay $4.  If everyone uses the coupon at the Department Store, their net revenue per cone is also $2.  But their discount rate is 75%.  

    The Gourmet Store is more generous with the orphans than people realize; about half of their cones are given away.  So their discount rate is also 50%, but their net revenue per cone is $6.  And finally, Mel’s Fair Deal Ice Cream has a discount rate of 0% and a net revenue of $2.50 per cone.

    It’s important to remember that none of these stores cares where the cash comes from.  It could be from the customer’s pocket, from a parent or aunt, government food stamps, or a loan they take out from the government.  You count the cash, not the source of the cash.

    Now, guess what?  Almost all college aid is discount, much like those coupons the ice cream stores hand out.  It’s simply the college agreeing to take less cash than its published tuition rate.  If tuition is $40,000 and you offer a $20,000 discount or scholarship, you simply take $20,000 to educate the student, and write the rest off as an accounting transaction.

    The need for higher discounts in higher education are driven by tuition prices that are too high for most people to pay.  Colleges have to discount, or they’re going to have costs associated with making too much ice cream to sell that they can’t pay.

    (This is the part where someone will want to comment and extend the analogy ad infinitum: Which ice cream is better? Is one really worth six times more? Why don’t you make more flavors to attract more customers instead of discounting the vanilla to bring people in? Does your cost of ice cream production get lower if you produce a lot more?  Can’t you do research and optimization to figure out who should get the coupons when to maximize profit? And if so, couldn’t you lower price a lot and drive the others out of business?  Couldn’t you offer the coupon to fewer people and hope more pay full price? Please don’t be that person.  I’ll do a workshop for you if the price is right.)

    So, to easily calculate discount, in case it’s not clear, take the amount you have to discount and divide by the published price.  For a college, the discount rate is total institutional (unfunded) grant aid/total gross tuition. For average net revenue, take total gross revenue, subtract institutional (unfunded) grant aid, and divide that number by the number of students.

    For instance, if your sticker tuition is $40,000 and enroll ten students, your total gross tuition is 40,000 x 10, or $400,000.  If you award $100,000 in unfunded aid to make that enrollment happen, your discount rate is 100,000/400,000, or 25%.  After you take the aid away from tuition, your average net revenue is (400,000 – 100,000)/10, or $30,000 per student.  That’s how much cash you have to work with to do things like pay faculty, cut the grass, heat the buildings, and run the administration.

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    Now, below, you can dive into college discount rates, net revenue, mixes, and the shape of the industry. This data set is very rich, and I may do another angle on this topic later.  But for now:

    Discount arrayed (the first view using the tabs across the top) arrays about 950 four-year, traditional, private colleges.  I’ve removed lots of religious seminaries, some very small institutions, and, frankly, some suspect data from this for the sake of clarity.  This is IPEDS data so it’s reliable, but never perfect.

    Each college is a dot, colored by region and sized by freshman enrollment relative to the set displayed. The view shows discount rate on the x-axis, and average net revenue on the y-axis.  

    You can use the filters at right to limit the set further.  You can’t break anything, and you can reset the view using the controls at the bottom.  Try this: Use the First-year students filter to look at colleges with at least 2,000 freshmen.  Then look at those colleges with fewer than 250.  Interesting, no?

    The reference lines are the unweighted average of all 950 institutions in the set.

    Institutional grant policy shows how many colleges and how many students fall into institutional grant aid categories.  Some institutions give aid to 100% of all students.  The vast majority give aid to 90% or more.

    And finally, the Full-pay and Pell shows two variables: The percentage of students who get no aid (full-pay students) and those who get Pell grants at the institution shown.  And remember, it doesn’t matter where the cash from full-pay students comes from: That group includes some students whose parents write a check, and some who might get a Pell and whose parents take out an ill-advised PLUS loan for the cost of attendance.

    The point?  Discount rate is important for similar institutions in the same region, but as thing unto itself, it’s kind of meaningless.  Net revenue is more important, for the most part, but at some institutions where undergraduate education can almost be called a sideline business, even net revenue is not important as it might seem.

    Eager to hear your thoughts.

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