June 2010 Lawlor Focus

Summer Seminar Highlights

The theme of the 2010 Summer Seminar sponsored by Hardwick-Day and The Lawlor Group earlier this month, “A Time of Necessity, Authenticity and Creativity,” was brought to life as an acclaimed line-up of speakers addressed several current realities of the higher education marketplace:

• In reporting Pew Internet & American Life Project’s latest data on teens’ usage of mobile phones and social media, Amanda Lenhart stressed the need for colleges and universities to “know why you’re there and what you want to accomplish by engaging with teens” via those technologies. “It’s your ‘voice’ that matters most—your communication with them should be authentic and appropriately ‘institutional’ no matter which technology you use,” she advised.
• Katie Elfering of Iconoculture stressed the need for “hyper-relevance” in communicating with Millennials (the generation between ages 15 and 32 this year), who have multiple layers of identity and thrive on adding new ones. “For them, it’s all about tapping into the ‘me’ of the moment,” she noted. Elfering explained that when mobile technology and social media combine—through location-based applications, for example—“it results in relevance now. It provides both meaning and context.”
  
  
• In describing prospective students’ ideal online college search experience, Chris Long of Cappex also vouched for the importance of authenticity and relevance, considering that “students want the experience to be tailored to their needs.” He cited ease of use, timeliness and engagement as three more elements that are essential to recruiting students using social media.
  
  
• Journalist and author Anya Kamenetz posited that “we’re on the verge of an educational reformation” because “demand for education is outpacing any possibility of supply by 2025.” She picked up on the theme of relevance, as well, describing an open courseware model of higher education through which students will choose a goal and then build their own personal learning network, joining a community of practice comprised of people engaged in common tasks to further that goal. “The point is to go beyond one-size-fits-all,” she said.
  
  
• Todd Rogers, a behavioral scientist at Harvard, demonstrated the importance of goal-setting within the wider context of human decision-making, citing it as one of seven behavioral principles that could have implications for college enrollment and retention. In studying how people are influenced to take action, he’s found that having them imagine future possibilities and identify their goals is key to helping them follow through on things they intend to do.
  
  
• One thing the families of prospective students intend to do, according to “Marketplace Money” economics editor Chris Farrell, is deleverage: “We’re entering a long period of time of paying down debt, at both the government and household levels.” The higher education system reached a point of relying too much on families’ willingness to take out loans, Farrell noted, so “now the discussion is, ‘How can we afford it?’ because households have so many other worries” about their income, expenditures and savings.
  
  
• The president of Hartwick College, Margaret Drugovich, also expressed worries about the sustainability of higher education’s financial model and shared her belief that, when formulating and instituting radically new policy solutions, “the key to change is utilizing a transformational leadership style.” Using such a process, Hartwick launched a three-year degree plan that reduces the sticker cost by 25 percent for high-achieving, motivated students enrolled in it.
  
  
• In analyzing the effects of federal changes to the servicing of student loans, Tim Ranzetta of Student Lending Analytics and Jamie Wolfe of NorthStar Education Finance considered the implications of income-based repayment plans. “If private loan debtors do income-based repayment of their federal loans, that implies they have nothing left to pay their private loans with,” noted Wolfe, who then ran the numbers to determine an ideal discount rate for borrowers who are likely to utilize income-based repayment.

Lawlor Recommends

New ideas, new thinking and new strategies are the rule of the day for higher education as a consumer culture of frugality and practicality continues to prevail. Families are on a quest for value, seeking proof that your college will provide a reliable foundation for future employment at a reasonable cost during a predictable period of time. And families are exhibiting deleveraging behavior, including a resistance to taking on debt and even “buying down” to less prestigious schools.

This landscape promises to be a catalyst for innovation. The current economic model of higher education is not sustainable. No matter what the new ideas are, transformational leadership must become a part of higher education’s culture, and it must start at the top of the academy. Institutional distinction creates difference and enhances perceived value, so your institution must engage in a process of self-assessment aimed at improving its value proposition (and its cost of delivery).

Meanwhile, enrollment management and institutional marketing officers must also innovate, recognizing that the mobile phone has become the “first screen” for most prospective students. And while print is still a part of the promotional mix, social media provides a variety of affinity destinations for today’s digital natives. Therefore, you must promote your college via multiple channels with a consistent and frequent brand message and value proposition. And generally, you must do it not by adding incremental dollars to your budget, but rather by reallocating dollars toward promotional tactics that generate better return on investment.

In the news

The Chronicle of Higher Education and Inside Higher Ed both called attention to Moody’s Investors Service’s concern about the degree to which colleges have their financial resources tied up in illiquid investments. Moody’s reports that “weakened balance sheets and reduced institutional wealth are broadly evident” in the private higher education sector, so Moody’s is maintaining its negative outlook for the sector, stating, “We expect credit conditions to remain challenged for at least the next 12 months.”

Did you know?

Social networking is the fastest-growing mobile activity, with a 240% increase over the past year.

Source: CNET