Fewer funds and students put small liberal arts colleges on a collision course with increased costs.
Consider the fifth graders, how they grow. There are about three million of them in the United States this year. Most of them will finish high school in 1990, and assuming that about 20 percent come from evangelical homes, almost a half-million of them could be ready to start college that fall. Consider a 10-year-old: a grandchild, a niece or nephew, your friend’s child, or your own. Consider someone with a quick mind, eagerness for life, and a spiritual curiosity that make you assume, “Someday that one will go to college, maybe a Christian college.”
When such promising young people are ready for a Christian college education, will they be able to afford it? And which Christian colleges will still be able to provide it? Will the Christian colleges have withered from the harsh convergence of all the negative forces now gathering against them, or will they have emerged as a vibrant and more visible element in American higher education? Some observers fear that the surviving Christian colleges will be of just two types: either so expensive only the rich can afford to attend, or so educationally impoverished only marginal students will consider them.
These resilient institutions have already outlasted numerous predictions of their disappearance and have provided a special kind of education to millions of evangelical college students. To survive, they have mastered the art of living hand-to-mouth on penny-pinching budgets. Few of them have accumulated much endowment, but the relative abundance of college students and mortgage loans during the sixties and seventies, plus the “visibility” of evangelicals in the society, did enable many Christian colleges to expand their enrollments, faculties, facilities, and programs. Government student aid was plentiful, and tuition rates increased enough to allow improvement in the traditionally low faculty and staff compensation levels. But during the remaining years of this decade the Christian colleges expect to be facing a truly impressive array of problems, including fierce competition from one another.
Both the mission and the financial survival of Christian colleges depend on students. The number of students graduating from high school has already entered a long decline that will produce a 20 percent reduction during this decade, and it will stretch well into the 1990s as well. In addition, it is widely assumed that small private colleges will bear more than their proportionate share of the expected enrollment reduction. Some areas in New England and the Midwest will have to cope with 30 to 40 percent declines in the number of high school graduates available for recruitment by 1990.
Christian colleges typically obtain 80 to 90 percent or more of their revenues from student charges. Their operations are commonly so tight that even a small drop in student revenues can seriously affect the quality of education offered. On the other hand, the favored few with significant endowment income could benefit from an enrollment reduction that spreads the endowment over fewer students.
Less Student Aid From The Government
The cuts that have been made in federal student aid programs have raised significantly the net cost of college for the middle-class families from whom Christian colleges draw most of their students. The total aid reduction for students in the 65 schools of the Christian College Coalition has been estimated at well over $100 million per year. Unless Congress alters the situation by approving one of the much-discussed tuition tax credit programs, many students are expected to choose a cheaper public institution instead of a private Christian college.
Because a college spends most of its income on salaries and wages, and sets its price only once a year, it has a tough time “passing on” the results of rapid currency debasement. Although such inflation would tend to help a college trying to pay off indebtedness with the cheapened dollars, it also hurts the college by creating both financial and psychological resistance among potential students as the advertised price of a college degree escalates.
Many colleges are still trying to play “catch up” from the recent period of double-digit inflation when student and gift revenues could not match inflationary increases. The brunt of renewed high inflation probably would be borne, as it has in the past, by giving the teachers and staff subinflationary compensation adjustments, and by deferring campus maintenance. Both actions gnaw away at morale and quality.
Many Christian colleges have found it difficult to find money to maintain the quality and appearance of their dorms and academic buildings. Major donors often show little interest in such “unromantic” projects as steam lines, roofs, and energy-efficient windows. Many of the colleges have delayed normal and necessary maintenance work to put funds into salaries, student aid, and new buildings. This deferred maintenance has been dubbed a “ticking time bomb.” Sooner or later it will explode as a financial crisis, a health and safety crisis, or a student marketing crisis when potential students are turned off by unattractive dorms, outdated labs, and shabby classrooms. The push to construct new buildings will be replaced by efforts to raise endowments to maintain them and student aid to fill them.
Higher Student Charges
There is a wide range of total student charges among the Christian colleges, but assuming a typical 1982–83 figure of $6,000 a year, increases compounding at an average of 8 percent annually would put total charges at $11,100 for the fall of 1990. To the extent that family incomes would lag behind or exceed this rate, the real cost of college would either go up or down. For many colleges the student charges have actually been declining in relation to the median family income during the recent years of high inflation.
The more urgent concerns of most Christian colleges are that the gap will widen between public and private higher education and that the advertised price will scare prospects away even before student aid can be explained. Christian colleges have a special concern not to exclude poor students, but some of them also find it difficult to justify the common practice of charging the “richer” students enough to help subsidize those who cannot pay as much.
Tax considerations influence the contributions colleges receive, and any reduction in the tax-related benefits available to donors is expected to lower the gift income that keeps the students and their parents from having to bear 100 percent of the cost of a Christian college education. Most of the tax-reform plans now being considered retain a charitable contribution advantage for the taxpayer. Those options that eliminate or greatly reduce it, however, could be devastating, especially to the great majority of these institutions that have little or no endowment.
Low Endowment Income
Even those few Christian colleges that do have significant endowment funds have found it impossible to make their investments keep pace during periods of rapid inflation or when stock prices are falling. Because of their traditionally conservative investment philosophy, they do best during periods of economic and political stability, with steady growth in the gross national product. Analysts are predicting many things for the rest of this decade, but few are predicting stability.
High Cost Of High Tech
The entire Western world is in the throes of a fundamental shift from an industrial to an information and services society. The results will be felt in chronic high unemployment and major political, financial, and economic dislocations, but they will also be felt very directly by higher education. The way knowledge is generated, communicated, stored, organized, retrieved, taught, and learned will change dramatically as computers and other electronic media merge into one integrated system of interrelated technologies.
The lines separating the academic disciplines are expected to blur as the structure of knowledge becomes more unified. Liberal arts curricula will undergo extensive revision as the world of knowledge merges with the worlds of work and play. The definition of knowledge will be expanded to include not just “facts” but also how to find information in the universal electronic data base.
College libraries are already into the first phase as they computerize their card catalogs. Before this decade is out, the leading institutions will have computers and other electronic information media available to every student, teacher, and administrator. They will have instantaneous access not just to indexes and catalogs, but to everything from the telephone directory to the texts of magazines, professional journals, and encyclopedias. Video discs will offer “the best” of everything, from a famous philosophy lecture to science experiments.
All these advances cost money, lots of money: money for high tech experts who make more than some Christian colleges now pay their top administrators, money for complicated hardware and software systems, money to retrain traditional faculty whose main skill has been delivering lectures, money that many small Christian colleges will have trouble obtaining. But unless they keep up, the competition will bury them.
Christian colleges are used to competing with the large universities, community colleges, and secular liberal arts colleges. Though the task is not easy, they have learned through trial and error how to reach enough people with the right messages. But now as the pool of high school students recedes, and as fiscal restraint hits both federal and state legislatures, the public institutions are meeting the private colleges head-on in the student recruitment battle.
In addition, the competition among the Christian colleges themselves is becoming more intense. If there are 20 percent fewer Christian college students in 1990 than in 1980, then there will be 20 percent fewer Christian colleges or they will be 20 percent smaller, or a combination of both. Few Christian colleges are openly planning to reduce their student bodies and staffs in proportion to the expected decline in the number of traditional college student prospects. Each college is implicitly planning to maintain current enrollment at someone else’s expense or at least to insure that it does not decline any more than the other Christian colleges.
Marketing is gaining rapid and widespread acceptance in this struggle to survive, and will increasingly replace simple reliance on more advertising, more fund raisers, and more student recruiters. Some of the more aggressive colleges have already combined student and donor affairs in marketing units that report directly to the president. The intensified battle for “freshmen, friends, and funds” is raising the costs for all the combatants, at a time when they are already hard-pressed.
Which Christian colleges will prevail? The ones with a large endowment share for each student have some obvious advantages, even though endowment performance may be erratic. Those with that elusive element “prestige” in their public image should do well, especially if they are also good at marketing, not just advertising. A Christian college with a good educational and religious reputation, but priced markedly lower than its competition, should be able to maintain a strong position. And it should be an advantage to have an exclusive, or at least a favored, position with an identifiable constituency such as a denomination, geographical area, specific segment of the student market, or a television audience.
A history of balanced budgets and strict financial controls not only reassures potential donors but also avoids the morale problems caused by forcing college personnel to adjust suddenly to unaccustomed levels of hardship. A campus with mostly new and easy-to-maintain buildings will help. Many small Christian liberal arts colleges have tried to be miniature universities by offering a wide range of majors and special programs. The pressures of this decade of decline will tend to favor the colleges that are willing to focus on those few things they can do best. Quality will be more valued than ever.
Colleges with faculties, presidents, or trustees who cannot make major adjustments rapidly and easily will find themselves on a very rough road, but those with a clear vision of their mission to the church and the society, and a flexible plan for achieving it, should emerge stronger than ever. It will be a great advantage to “buck the trends” during this decade.
The life force in Christian colleges is immense and only a few of them will actually die. The sense of high purpose and accompanying survival instinct will carry most of them through these difficult years. But when the flood recedes, there likely will be a very different landscape in Christian higher education with at least two and possibly three distinct layers in the system. The future will be much more precarious for those at the bottom than for those on top when this fall’s fifth graders log onto the electronic college information and application system. It will give them facts and quality ratings on all the colleges that meet their interests and cost criteria. It will allow them to complete applications at the computer terminal, and then send them electronically to the colleges they select. The selections of those students will complete the answer to the question now being asked about the future of the Christian colleges.
Richard Kriegbaum is director of planning and research at Wheaton College, Wheaton, Illinois. He is coauthor of A Marketing Approach to Program Development (1979), published by the Council of Independent Colleges.
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