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Universities Looking Out-of-State In Hunt For Revenue

Universities Looking Out-of-State In Hunt For Revenue

In 2015, there were 90,000 incoming students in the University of California system. Of those, roughly 15,000 were out-of-state students. In the decade prior, enrollment of California residents grew by 10 percent — but enrollment of students from outside the state, including international students, grew by 432 percent.

In the hunt for revenue, colleges are increasingly turning to out-of-state students, a tactic not without its controversy. In fact, 2016 seems to have been a year for reporting on at least two themes brooded on by the public and state government: affordability and access.

Last year, The New York Times reported on an audit done in California that found “the prestigious University of California system gave favorable admissions treatment to thousands of higher-paying out-of-state and foreign students, to the detriment of Californians.”

The Center on Budget and Policy Priorities reports that since the recession of 2008, states have reduced public higher education spending by 17 percent while, concurrently, tuition has risen by 33 percent. The University of California, after $1 billion in cuts, has seen its state money reduced from 25 percent to 9 percent of its budget. Students, for their part, can expect to pay twice as much as they once did.

As I suggested in a previous blog, the drive for international students is seen as a way to keep colleges afloat because those students can afford to pay. The issue with non-resident students in the domestic sphere mirrors that: low-income students, and state residents in particular, are left behind. In fact, the NYT points out, a recent study in the journal Research in Higher Education found that “as out-of-state enrollment increases, universities admit fewer minority and low-income students.”

The Atlantic, in an article published that same year, echoes these findings. “Students from out-of-state are especially coveted,” they report, “because state universities typically charge higher tuition rates to students who went to high schools in a different state.”

At base, the issues of access and affordability are paramount. No one argues the importance of enrolling low-income and minority students from in state, and at the same time making it affordable. Across the country, we see that state government funding of public education has plummeted. And at private institutions, a lack of endowments also signals an increased need to make up the shortfall.

The question is, can colleges and universities, whether public or private, have their cake and eat it, too. One answer, I think — and Capture Higher Ed thinks — is that the money a college does have for admissions and enrollment needs to be allocated effectively. The solutions we have come up with — Capture Behavioral Engagement (CBE), Capture Recruitment Intelligence (CRI) and Envision among them — are aimed at getting the most out of what you have at your disposal. It is about spending money wisely — and fairly.

In terms of financing, the average Capture return on investment is substantial. If a school invests $1 with Capture, they can expect to get back $11.52 in the first year. Looking at the lifetime value of these students over the next six years, the value is greater still — 37 times! Or if a school invests $1 with Capture, they can expect to get back $38.27 over the next six years.

Capture’s products are concerned with using money efficiently. The idea behind the “mission-fit student” is locating a student that a college can invest in — one that will follow through to graduation. Losing a student that was not a good fit for your college invariably means money must be spent again to fill that space — and that money can be used to enroll and fund students who need financial assistance and will benefit from the experience of college.

All students deserve a chance to go to college. We can help.

By Sean Hill, Senior Content Writer, Capture Higher Ed