A Kentucky college makes a risky bet on enrollment as population cliff looms
Over the past few weeks, little Georgetown College has done something pretty extraordinary.
In a series of press events, they’ve announced free tuition to prospective students from Scott, Casey, Owen and Franklin County. If the students qualify for admission, they pay no tuition, although they have to live on campus all four years and pay for room and board. It’s a good deal -- the tuition is nearly $40,000 a year while room and board is about $12,000.
The most extraordinary part is that it’s not really clear how Georgetown will pay for it; they’ve talked about private fundraising. A private school dependent on tuition is betting that enough new students will come to offset the tuition loss. For a school that’s graded a D for financial health by Forbes Magazine, it’s a very risky move, one that could reap huge dividends or sink the whole ship.
But expect to see more gambits to get students like this one, particularly among Kentucky’s smaller and private schools. Higher education, both nationally and in Kentucky, is facing a significant decline in high school population, one that could have profound effects on the college landscape. Kentucky is expected to lose about 6 percent of its high school students, a trend that is expected to level off by 2026. (The Great Recession of 2008 plus 18, you do the math.)
“It’s a serious problem,” said David Mahan, associate vice-president at the Council on Higher Education. “There won’t be enough students to continue to grow, and it will be a challenge.”
New funding models
Because of statewide cuts, public universities have joined private schools in being dependent on tuition for funding. That makes the competition for students particularly fierce.
Who won’t be hurt? The University of Kentucky and the University of Louisville, the academic vacuum cleaners, sucking up students with the wide-ranging educational programs, big financial aid packages and marquee sports teams that the state’s two biggest schools have to offer.
Publics like Morehead and Eastern Kentucky University have a greater struggle, hamstrung by enrollment declines combined with a state performance funding model that pits them directly against UK and UofL.
Who else should be fine? The schools that saw the writing on the wall a long time ago and decided to do something about it. Here’s a gobsmacking statistic: Campbellsville University and University of the Cumberlands, which started out as tiny religious schools in Kentucky’s hinterlands, now have student enrollments of roughly 12,000 and 13,000 respectively. Georgetown and Transylvania, by comparison are at about 1,000. The vast majority of those students are taking online classes in niche programs like education, information technology and cyber security. Campbellsville has established eight satellite locations across the state, with one of its biggest in Harrodsburg, right in UK’s back yard.
You can turn your nose up at online education, but it’s where the tuition dollars are, so much so that even UK has expanded online classes for both crowded undergraduate classes and some graduate certificate and degree programs.
“Both public and private schools are challenged with changing demographics and the institutions that are innovating and making strategic initiatives are being more successful,” said Gary Cox, long time execcutive director of the Association of Independent Kentucky Colleges and Universities who just retired.
Other schools are looking for solutions, too. Tiny Midway University has added more sports and online programs. Transy also added more sports, and a similar discount to students at three Lexington high schools. Qualified seniors from Bryan Station, Frederick Douglass and Henry Clay high schools get a minimum financial aid package of $18,000.
“The reason we’re in those schools is that a lot of those students don’t look at four-year privates,” said Johnnie Johnson, Transy’s admissions director and the current president of the Kentucky Association for College Admissions Counseling. “It makes sense because we’re local, we want to keep our best and brightest in Lexington.”
He thinks the Georgetown College play is great for kids, but will make his recruitment in those counties more difficult. On the other hand, Georgetown’s endowment is $41 million, according to U.S. News, and Transy’s is $174 million, so Transy has a much wider safety net.
He thinks that statewide, demographics will cause some struggles. “I meet with enrollment leaders at all the institutions and we’re talking about different ways we can stabilize our individual institutions and higher education in general.”
The real problem is that colleges are too big to fail until they’re not. In 2016, St. Catharine’s College closed because of financial problems, sending students looking for a home, and creditors looking for a sale. Georgetown College is a beautiful campus near the heart of Georgetown’s downtown, and it’s unimaginable that it would some day not exist. Here’s to hoping their very big bet pays off.
This story was originally published December 27, 2019 at 8:03 AM.
