Navigating the CBE Frontier: Managing Enrollment and Revenue Targets
This article was originally published October 23, 2015 on The EvoLLLution at http://evolllution.com/managing-institution/higher_ed_business/navigating-the-cbe-frontier-managing-enrollment-and-revenue-targets/.
We met this summer with the program leads, academic deans, and business officers managing each of our existing UW Flexible Option programs to set enrollment and revenue targets for the coming year. UW Flex has now been in operation for about 22 months, and I think of our first year as establishing “proof of concept.” Flex does, in fact, work pretty much as we had hoped it would. In addition, our enrollments over the first 22 months have exceeded by about double the projections estimated in our business model.
UW Flex is a 100 percent cost-recovery program, meaning all our ongoing revenue will come from enrollments. We secured one-time funds as start-up capital, enough to sustain us for five years, after which we projected we would break even. We built our business plan on each program breaking even within 5 years, and then sharing revenue with our partners as individual programs grow beyond break even.
We have two enrollment options at two different price points:
- An “all you can learn” enrollment period for three months that allows students to take as many assessments as they can, receiving all the support they need.
- A “one competency at a time” three-month enrollment period, where students work on just one competency set within their three months, also receiving all the support they need.
As the first year was a proof-of-concept year this coming year is critical because programs are either on track to break even or they’re not. Since revenue is based entirely on enrollments, you can see why enrollment targets become so important.
The meetings we had this summer went very well, and what I wanted to share was the kind of data that we used to establish targets and set expectations about faculty and operational workloads.
First, we looked at enrollment trends over the first 18 months for each program, and used those trends to create straight-line projections for the first five years of each program. (Technically, these aren’t straight-line projections because we did adjust growth rates slightly downward after three years of growth. We based that curve on our experience with other collaborative degrees with which UW-Extension is involved. So these are more accurately straight-line projections with slight adjustments.) We estimated the proportion of students, per program, who will enroll in “all you can learn” or “one at a time”—based on the enrollments in that program within the first 18 months.
We then looked at the actual program expenses: faculty time for grading and “refreshing” competencies and assessments (the curriculum), numbers of Academic Success Coaches required to support enrollments, and operational expenses of marketing, recruitment, admissions, registrar functions, bursar functions and financial aid administration.
Some of these expenses are fixed—the development and “refresh” of curriculum is based on a fixed schedule. Some of the costs escalate as enrollment grows—the amount of faculty grading, the number of ASCs required to support students, etc. We also made assumptions about retention rates, based on our 18 months of experience. As we all know, the expense to retain a student is lower than enrolling a new one. All these expenses were likewise projected forward based on the yearly enrollment projections.
Finally, we charted the projected enrollment growth (representing revenue) against the yearly and escalating expenses, and saw where the revenue and expense lines crossed. This represented the break-even point.
We laid all these charts and tables in front of institutional partners: the program leads, the deans, and the business officers. We took some time to make sure everyone understood the models—and in fact, made adjustments to the models based on some detailed information that our partners shared with us about how students were performing. Then the conversations turned to what we all needed to do to maintain educational and operational growth in our programs, establishing expectations for the year about faculty assignments, marketing and recruiting, and other aspects of the program. We engaged in very productive conversations, for example about how an academic department will handle workload, scaling from a few “pioneering” faculty to having Flex work become an established part of departmental educational activity.
Enrollments for two of our programs—the Bachelor’s of Nursing and the Bachelor’s of Information Science and Technology—are strong enough that they should break even in another two years, which is ahead of schedule. That’s assuming, of course, that their enrollments continue to grow at the rates estimated. One other program will need to ramp up very slightly to break even in the right amount of time, and two programs will need significantly different marketing strategies to succeed. One of those, the Associates Degree from UW Colleges, will soon be marketed both to degree-seekers and to students who wish to “fill in” general education courses for other Flex programs and for brick-and-mortar programs. The Business and Technical Communications Certificate will also be marketed as a supplemental certification to other UW Flex students, and we’re also beginning to explore how to market it directly to businesses with large numbers of employees who desire this professional development.
The main point of this blog post, however, is not to focus on the strengths of the programs, but to highlight the data and process we used to do our planning, and the process we used to establish expectations in this coming, seminal year of UW Flex’s growth.
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This article was originally published on The EvoLLLution at http://evolllution.com/managing-institution/higher_ed_business/navigating-the-cbe-frontier-managing-enrollment-and-revenue-targets/.
Since 2012, Aaron Brower has served as the provost and vice chancellor of the University of Wisconsin-Extension. Prior to his current posting, Brower served as the Vice Provost for Teaching and Learning at the University of Wisconsin-Madison. He continues to hold positions as Professor of Social Work, Integrated Liberal Studies, and Educational Leadership & Policy Analysis also at UW-Madison. His work focuses on educational innovations, student outcomes, and integrative/project-based learning.