The business of higher education Interest and intent marketing

Though it makes no money, and most are non-profits, there is a rising cost to the run the business that needs funding. Since schools don’t make anything to sell, they rely on fixed revenue sources. In the private category, a school with an endowment of around one billion, the numbers are something like this: around 25% of the budget is from the endowment, 10% from annual giving, and the remaining 65% from full-pay applicants. Public schools have different math, but still use gifts, tax money, and full-pay applicants. The math depends on many factors, and full-pay includes many people getting private and public loans, but this is the business.

A school needs a certain percentage of full-pay students, so the admissions staff makes private school visits throughout the process.

This is the marketing strategy — go into a private school, especially one that has drawn students in the past, and hand out a view book. The students will get view books from all the schools, and they will all be about the same. Each one will focus on the school visit, all believing that getting someone on campus means they will be converted. In reality, a friend or family member went there, so the kid will too.

The rest of the applications will come from marketing, or making people aware of the school. This is where social can impact the decisions process. Sadly though, most social is either advancement-related, or via the dean of the college. Higher education isn’t awesome at thinking about this as a decisions cycle. Schools should be planning the 2024 class right now, using social marketing to generate awareness of the school to current juniors.

Right now, in high schools across the world, juniors are thinking about college. They know the deadline to apply. They are planning summer trips, around summer camps, to some of the schools on their list. They are probably Google searching your school, and probably not clicking on your website, because, lets face it, your website is a hot mess of confusion for a junior. They don’t know who you are talking to, or why your website features a lecture right now.

Generally, college leaders defend these preferences as a way to keep alumni engaged (and giving money), and to create a multigenerational spirit about an institution, while critics decry what they see as “silver spoon” admissions. While college leaders regularly defend affirmative action in public statements, relatively few speak out about legacy admissions.

The author is right, legacies are more about donations. From a business perspective, a recent graduate of a donor alum is more likely to start out life as a consistent donor. A full-pay graduate with wealthy patents starts off in a better financial situation than a student who needs to take out loans. That reality turns them into a higher giving donor faster.

Then there will be the percentage of people who are not full-pays. In this population will be some people who get aid, but need a loan to close the gap, and [people who get a full ride. This ride doesn’t include incidental costs like textbooks and spending money, so some of these people will also get a loan. In short, the only ones not getting a loan will be the real full-pays, the ones who received a 2.6 tax break on income. If they made 100 million, that is about 2.5 million, more than enough to give to a school on top of the tuition.