Appendix - The Environment for Higher Education
The environment for educational institutions in the period 2004 - 2008
offers both challenges and opportunities. As we look to Wooster's future,
we must assess the realities that Wooster and other colleges and universities
will face during the next five years. Major considerations include the
national and world economy, demography among high school graduates, public
perceptions about residential liberal arts colleges, competition for students,
and the world political situation.
Economic Realities. From 2000 to 2003, the United States economy
slowed significantly, particularly due to severe weakness in the technology
sector, to the decline in equity markets, to corporate scandals, and to
other world developments. Despite more recent signs of a recovery, there
appears to be continued economic uncertainty. There is no general agreement
on the direction of the economy for the next five years; some predict a
long period of weak performance while others see a prompt upturn and strengthening.
Given these varied opinions, it is not unreasonable to expect a continuation
of the volatility experienced in the last three years. A low inflation
rate is one of the few estimates on which many agree. In any case, competition
among firms and workers worldwide will keep pressure on employment, salaries,
and wages in the United States; and incomes of middle-income families will
most likely continue to grow more slowly than college fees, despite efforts
of colleges to hold price increases close to inflation.
The national concern over cost, price, and value in higher
education, as expressed in national reports over the last five years, has
been expanded to include a focus on access, accountability, and assessment,
as Congress prepares to renew the Higher Authorization Act. Colleges that
take publicly visible actions to restrain price increases and their own
costs, to explain their costs more clearly to the public, and to hold themselves
accountable through regular assessment may have an advantage in national
recognition and in competition for students and financial support.
Because the price of independent higher education at colleges of national
caliber is likely to remain beyond the capability and willingness of many
families to pay without financial aid, the demand for need-based
aid will continue. Although there is little sign of moderation in the intense
competition for students and hence of reduction in the need for merit scholarships
as a competitive tool, colleges will need to use such aid more strategically
to attract students with particular academic strengths, talents, and backgrounds
without overspending in this area.
In recent years, increased financial aid in the form of tuition
discounting has impeded Wooster's ability to fund basic needs.
Although during 1998-2003 the College was able to slow the increase
and stabilize the tuition discount rate at just above 50% through sophisticated
quantitative methodologies, this level is unacceptably high. The College
believes it important in the next period to attempt to lower the tuition
discount rate by up to five percentage points.
In May 2004, the College's endowment stood at $213 million,
down from its high level of $228 million in 2000 but $25 million more than
its level in 1998. The endowment is currently contributing approximately
$10.5 million to the operating budget, more than 18% of total revenue compared
with approximately 12% in 1998. Comparatively speaking, Wooster's endowment
per student is lower than that of colleges that do not attempt such expensive
programs as Independent Study and a generous faculty leave program. In
the current economic climate this endowment contribution is being achieved
by a spending rate that will, at best, prevent the endowment over time
from growing to keep pace with inflation, and could in fact diminish its
relative value. It will be important to increase the endowment in the current
campaign in order to lower the spending rate and to maintain support for
programs.
Levels of compensation for faculty and staff are linked
to the quality of appointments. To remain competitive, it will be important
to achieve salary increases at or above the rate of inflation for the period
ahead. To accomplish this, however, while maintaining a balanced budget,
will require additional resources and a lowering of the discount percentage.
Economic realities also affect the size of the faculty. The current range
for the student-faculty ratio is from 11.5:1 to 12:1, yet
experience is showing that the Independent Study program, the new writing
program, and the leave program will be best supported with a lower student-faculty
ratio. An average student population of 1750 has permitted a faculty of
about 150. Additional faculty positions would permit fuller replacement
of leaves and a student-faculty ratio better suited to the curriculum.
Support for higher education from foundations has flattened
along with the state of the economy. Nevertheless, Wooster has successfully
competed for a number of recent major grants, for example from the Howard
Hughes Medical Institute, and new grant invitations are being received.
Opportunities for such support will continue and the College is prepared
to take advantage of them. Federal and state support for
independent higher education has likewise flattened, and the status of
federal and state budgets does not suggest growth in the near future; it
would be unwise to make plans based on substantial increases in government
support for higher education.
Demographic Realities. The size of high school graduating classes
nationwide, in the Midwest, and in Ohio grew throughout the period 1994
to 2000 (by percentages of 14.6, 10.6, and 3.7, respectively), and by 2003
these figures had returned to the high levels of the mid-1980s. Likewise,
by 2003 the number of applications to the College had returned to its high
levels of the mid-1980's. However, for the period 2000-2007 the trend in
high school graduation numbers will change. The number of graduates nationally
will grow at only half the earlier rate, Midwest numbers will grow at only
2.2%, and Ohio graduates will actually decline slightly, by 0.6%.
The fluctuations in student enrollment that Wooster experienced
from 1985 to 1995 created problems of instability in planning. Wooster
faces the challenge of maintaining stability in its size and at the same
time attracting and retaining a student population of high quality. An
important opportunity is to meet this challenge by taking advantage of
the demographic situations in those geographical areas of strongest growth,
such as the South and the West.
Wooster has an historically strong commitment to ethnic diversity among
both the student body and the faculty and staff. The College has always
placed great value on the contributions made to the campus by members of
populations under-represented in higher education. This advantage will
be increasingly important in the future, and demographic realities offer
Wooster an opportunity to enhance a traditional strength. Nationwide, the
demographic rise will be most pronounced for three ethnic minority groups--African
Americans, Hispanics, and Asian-Americans--and thus it is reasonable to
seek an increasing proportion of applicants from these groups.
Public Perception. The public and the media will continue to assume
that colleges with the greatest financial, physical, and human resources
have the strongest claims to excellence. However, students and their families,
will seek additional indicators of excellence in judging the value of a
college or university, looking for colleges that:
- focus on the totality of student experience, by emphasizing strong
advising and mentoring relationships with faculty and staff in all phases
of their college lives and beyond and by providing defined and expected
student opportunities, e.g. off-campus study, clubs and organizations,
athletic teams;
- offer majors that students seek or can imagine pursuing;
- offer evidence of student success following graduation, including admission
to graduate and professional schools as well as obtaining first employment;
- uphold and encourage high standards of character, integrity, and personal
responsibility;
- are committed to keeping pace with technological change; and
- are known by friends, families, teachers, and counselors.
While general reputation can depend largely on measures of resources per
student, successful enrollment is more likely to be achieved by demonstrating
that Wooster represents value within the context of these latter indicators.
Especially, increased appreciation of the distinctiveness of Wooster's
curriculum will be essential. Our success will depend upon
our ability to demonstrate to the public that Wooster's distinctive
one-on-one style of education, embodied in Independent Study, is a
superior method of changing students’ lives and achieving the
aspirations of the College's constituencies.
The geographical location of colleges will continue to play
a role in student choice. In many ways, Wooster's location near Cleveland
offers the advantages of both rural and urban environments, and we should
capitalize on this fact.
In recent years, the College has enjoyed increased publicity on a national
scale for its distinctive features such as Independent Study. This recognition
has been achieved through the professionalization of both college relations
and institutional research. The College has many stories to tell, and it
will be important to maintain the momentum established by recent successes.
Effective gathering of data is increasingly valuable for this effort.
Competitive Realities. Aggressive competition for students, particularly
in Ohio, has been a critical consideration for more than a decade. The
relative stagnation in numbers of high school graduates in Ohio and the
Midwest suggests that this situation will continue. Moderating this for
the private sector in Ohio will be the rapid rise in tuitions at public
institutions and greater uncertainty about admission of students to highly
ranked private institutions in the East. In any case, competition for the
best students is expected to continue, and Wooster will have to compete
for strong entering classes capable of benefiting from the College's program.
The role of distance learning in competition among colleges is still unclear.
While opportunities for distance learning will appeal primarily to adults
and part-time students seeking individual course work for employment and
leisure purposes, some inroads into the traditional college-age market
are expected. Wooster must join with other liberal arts colleges in promoting
greater public appreciation of the value of the total residential college
experience, while at the same time exploring with its consortial institutions
possible benefits of distance learning in selected areas, such as less
commonly taught languages.
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