Taking a gamble: Undergraduate enrollment on the decline and the price of safety


As the effects of the COVID-19 pandemic and the rise of the delta variant continue to wreak havoc, colleges and universities across the country, including Stetson University, may be facing a crisis more pressing than ever.


In March of 2020, when the United States weathered the initial hit of the coronavirus, more than 1,300 colleges and universities made the decision to completely cancel face-to-face classes or shift to an online format, according to the National Conference of State Legislatures.


Suddenly, when faced with the question of plans for the fall 2020 semester, decisions had to be made in a variety of capacities for colleges and universities across the nation. To what extent would they be returning to normal functions, if at all? At the center of these concerns was the question of what exactly the student body would look like in the future if safety concerns amidst a global pandemic were evident enough to compromise a loss in enrollment.


As enrollment numbers are, of course, tied to finances, institutions had to take a gamble and wager if it was worth the safety risk to revert back to some degree of pre-pandemic norms in order to maintain some sense of financial stability. These questions continue to be of concern and the stakes remain high as we consider what the state of the university will be like going forward.


Enrollment on a National Scale


According to Inside Higher Ed, college and university enrollment saw a decline of more than 3% nationwide from the fall of 2019 to the fall of 2020, a number which turns out to approximately 651,774 less students. Freshman enrollment specifically for postsecondary institutions dropped by an alarming 13.1% in the fall of 2020, according to the National Conference of State Legislatures.


Numbers in the spring 2021 term became even more concerning as enrollment saw the largest decline in a decade. According to Insider, “College enrollment declined by 3.5%, or 603,000 students, from spring 2020,” which they report was “the largest one-year drop since spring 2011.”


These falling numbers are largely a result of undergraduate enrollment, which according to Forbes, dropped by 4.9% this past spring. Graduate enrollment on the other hand saw an increase by 4.6%, following the increasing graduate enrollment trend that has been present since 2018.

For private institutions specifically this past spring, Forbes reports that private non-profit institutions like Stetson saw enrollment drop by 0.8%.


Not only should we consider the impacts of fewer students enrolling, but we should also consider if the students who were already attending decided to stick around. For this metric, we can look to the nation’s college retention and persistence rates since the pandemic began.


The college persistence rate, which is reported by the National Student Clearinghouse Research Center (NSCRC) and refers to the percentage of students who return to any institution for their second year, dropped by two percentage points last year, according to Forbes. This is the largest one-year drop since 2009. The college retention rate, which refers to the percentage of students who return to the same institution, also dropped by 0.7% in the fall of 2020, also the largest decline since 2009, reports Forbes.


But what about private non-profit institutions like Stetson? Forbes also reports that “Private non-profit four-year colleges saw decreases in both their persistence and retention rates, with 2 percentage point and 1.3 percentage point year-over-year declines, respectively.”


Although these decreases were for the most part less than originally anticipated, the results could nonetheless be devastating. Regardless of the anticipated impact, what kind of implications do these drops in numbers present for institutions across the country? Will the economic impacts of COVID-19 be detrimental to the future of higher education in the U.S.? Will institutions across the country be able to recover?


Stetson Decline


After examining these numbers on a national scale, how does Stetson fare in comparison to the rest of the nation?


In terms of total enrollment, Stetson saw a 0.2% increase in enrollment from the fall 2019 to fall 2020 semester. This was largely due to the 20% graduate student enrollment increase, as undergrad enrollment dropped by 1.8% in comparison.


However, the following year, from the fall of 2020 to fall of 2021, total enrollment dropped by 5.7%. This is largely due to the alarming decrease in undergraduate numbers. Even though graduate enrollment increased by approximately 11%, undergraduate enrollment declined by 7.7%. While 3,125 undergraduate students enrolled in fall of 2020, only 2,884 students enrolled by fall of 2021.


These numbers present legitimate concerns when taking the enrollment data from fall of 2019 to fall of 2021 into consideration. From 2019-2020, the university has seen a startling 9.4% decrease in undergraduate enrollment from the fall of 2019 to the present—although the graduate enrollment did increase by 33.3% from fall of 2019 to fall of 2020, which is surely worth noting.


Although graduate enrollment proves to be promising in the future, undergraduate enrollment has continued to drop by startling numbers. With data like this, how has this been impacting the university financially, and to what extent should we be concerned? Brian Fortman, director of undergraduate admissions at Stetson University, recognizes the impact on a tuition-dependent university that comes as a result.


“Like most private colleges and universities, we’re tuition dependent. We rely heavily on our students as they’re coming through that process. And, I mean, as an admissions professional, we want to hit our numbers every year. We want to hit our enrollments. That’s what we do as far as our role with the university, so, it’s very important to us,” Fortman said. “I do think that the changes that we’re implementing, and hopefully getting high school students back to—I’m going to use that word normalcy—for them I think is important. I think that will be beneficial for us moving forward.”


Combating these struggles is no easy task. But Fortman drew attention to both the challenges existing in the higher education landscape before the pandemic, as well as the interruption to the academic experience that came with COVID-19.


“I think, even before the pandemic there were a lot of challenges…first, you’re seeing a decline in the number of high school graduates in most areas of the country, and that was even pre-pandemic…It goes back to the recession, in 2008 and 2009, which impacted birth rates. And when birth rates are impacted, down the line that impacts the number of students that are graduating from high school,” Fortman said. Throw in a pandemic, and these trends only become magnified.


Fortman also emphasized the shift in the college search process and its impact on undergraduate admissions. According to Fortman, the university had a fairly successful 2020 admissions campaign. More significant problems arose afterwards.


“When it [the pandemic] hit in March of 2020, most students were well into their college search process…so for the majority of the year, those students were still able to visit schools, and we were traveling all fall [of 2019]. So we were able to do a lot of the things that we’ve done from year to year,” he said. “Now you fast forward to 2021 and you have students who were impacted in their junior year. If you think about the college search process, most students start their visits spring of junior year, over the summer, and then throughout their senior year, and the students just didn’t have access.


Fortman says that last spring, enrollment numbers were looking optimistic up until April 1: “We were ahead on April 1, and so we felt like, up until that point, we were right where we needed to be. And then of course, April wasn’t as strong for us and then we lost some students over the summer as well, and that’s what led us to where we ended up,” he said.


Fast forward to this year’s recruitment, and while fortunately more opportunities are opening up for these students, Fortman says that they are still behind in where they would typically be in their college search. But with opportunities for more in-person recruitment increasing, Fortman feels that the chance for students to experience all that Stetson has to offer in person, rather than through a screen, will help undergraduate admissions immensely.


“One thing I think it points out is that this is the type of place that the students need to fall in love with. They have to come for a visit, they have to see it, they have to feel it, they have to smell it, and go through that process. And those opportunities were limited last year. So while they may have still applied, maybe their interest wasn’t as high because they weren’t able to do those things earlier in the process,” he said. “Because of the precautions that Stetson had to implement to make sure that our community was safe, students weren’t able to see the engagement that we have on campus. And so I do think that, you know, having all of our students back on campus is going to help. I think it creates a stronger atmosphere for our visitors.” 


Contributing Factors


As we examine the nuanced nature of this dip in enrollment, various factors have contributed to the decline. One worth significant consideration has been the financial capabilities of students and families during a global crisis such as a pandemic when many have found themselves in a much different situation to be able to attend college.


As many incoming freshmen had to make the decision of whether to invest in an educational setting only being offered in a limited capacity, CNBC reports that “one-quarter of last year’s high school graduates delayed their college plans…largely because their parents or guardians were less able to provide financial support.”


Other changes in college plans came as a result of these financial considerations as well. The more affordable option became attending schools closer to home, moving completely online, or choosing a more affordable college or university altogether—all which present financial implications for many institutions, especially ones that aim to attract students from out of state or internationally.


When the average cost of undergraduate tuition and fees plus room and board at four-year private colleges and universities comes out to $50,770 nationally as it did for the 2020-21 school year, we are left to wonder if this has played a major part in the enrollment decline during the past couple of years. Add in the various additional expenses besides tuition and housing, and it simply becomes unaffordable for many students during the economic crisis that the pandemic presents.


So, when taking decreasing national enrollment numbers like 3.5% into consideration, what does this mean for the economic stability of colleges and universities? When institutions are forced to deal with drastic changes, suddenly colleges and universities are losing revenue. Without the usual influx of money from room and board as well as fewer tuition payments, the economic impacts loom ever presently, and the financial stability of these institutions seems to be more pressing as they face more challenges than ever.


It Adds Up


The COVID-19 pandemic took institutions across the nation completely by surprise. Suddenly, these institutions had to deal with either completely shutting down with the initial onset of the pandemic or altering their operations entirely. Even when universities like Stetson were able to continue with some degree of normal functionality, it couldn’t come without major changes to normal operations.


In a survey by the National Association of Independent Colleges and Universities (NAICU), “Three-quarters of 68 institutions that responded to the survey said that COVID19-related spending in the fall exceeded their expectations.”


With the move to online and hybrid learning, costs to accommodate these new ways of learning and the ability to carry on safely were also needed. Inside Higher Ed reports that “Technology and related training was the most frequently mentioned additional expense among NAICU respondents… about a quarter of responding institutions said it was their largest pandemic-related expense.” As many institutions adopted their own COVID-19 testing practices, these protocols also did not come without associated costs.


Stetson experienced many of these revenue changes themselves as various efforts were made to the university to allow operations to continue. Jeremy DiGorio, associate vice president for budget and financial planning, emphasized the effect of the surge of direct expenses that came as a result of COVID-19.


“Stetson during this whole time was really trying to prioritize the safety of students in our community, as well as the continued learning of our students. So whatever we needed to spend our money on within that funding and beyond to make that happen was our priority,” DiGorio said.


As he laid out, these direct expenses took many forms. The university adopted a gateway testing program, put money into purchases for additional PPE, and also took on the task of transforming various locations like the dining hall and residence halls into socially-distant settings. Additional air purification systems were also updated to higher levels of standards. Increased IT infrastructure was also significant as equipment for virtual and distance learning to accommodate the large shift from Stetson’s typical in-person experience was needed. As the university was also operating with students on campus in the 2020-21 school year, contracts with local hotels for additional isolation rooms also created an additional expense. These added expenses did not come without a heavy price tag and a significant loss in revenue.


According to DiGorio, “It was about $3.7 million of direct expenses in fiscal year ‘21. We did have some expenses in fiscal year ‘20, because our year ends June 30, and we are still having some in ‘22 for testing, etcetera, but I did want to pull that number kind of as a basis. So we had about over $5 million in lost revenue in fiscal year ’21 by [having] less students on campus.”


Playing a factor in the decrease in revenue has been the university’s decrease in enrollment.

According to DiGorio though, the financial impact was better than originally anticipated.


“So enrollment last year was not as high as it was the prior year, but it was better than expected. And I think that a lot of it came from additional scholarships. So the university made a conscious effort to provide a welcome back grant in the fall of 2020, which did have a significant cost in budget, I think it’s about $2.3 million. So the additional scholarships that were given last year, as well as the lost auxiliary revenue, like housing and dining, was probably a significant loss of revenue.”


Combine these immense cost increases with an enrollment decline that is eliminating revenue, and we may have a problem that leaves many wondering if there is any chance for recovery.

Fortunately, to offset the unexpected effects of these direct expenses and lost revenue associated with the pandemic, the university received various iterations of federal funding from the government, which DiGorio explained.


“The government essentially had three iterations of federal funding. The first was the CARES Act. What was in the CARES, it was the peer funding or higher education emergency relief funding. And so really, there were three iterations of the peer funding that Stetson received. As a part of all three of those, there’s a student portion and an institutional portion, and you have to use your full student portion of that federal funding to be able to use the institutional portion,” said DiGorio.


“The student portion really goes to support the needs of students, which could be immediate financial need, or it could also be for additional scholarships to help offset the cost of tuition, reward, etcetera. So in all three of the federal funding distributions, the student portion was to be used first. And so we work in finance and budget with financial aid to work directly with students to make sure that’s being used,” he said.


Overall, according to DiGorio, Stetson received approximately $18 million in federal funds, of which over $8 million went and continue to be distributed directly to students: “Even as of today, financial aid is working on providing additional funds to students through scholarships to help offset this semester,” he said.


Also pointed out by DiGorio was the use of some of this funding to be used to help compensate for lost revenue. According to DiGorio, “Stetson made the choice to go to single occupancy residence halls last year, and some of that lost revenue that we would typically have had was to be offset by some of this federal support stimulus.” This, in turn, softened the effect of these revenue losses.


DiGorio drew attention to the impact of the pandemic, but also the federal funding, on the university’s budget: “A large portion of our budget is auxiliary revenue, which is through housing fees, and then dining fees like in the Commons behind us. And so you know, that lost revenue does have an effect on our total budget. So that was smaller last year, but also assisted by U.S. federal funding,” he said.


Although the university’s financial stability has been bolstered by federal relief efforts, DiGorio also focused on the efforts within the university specifically that were made to prepare for the economic impacts.


“So this happened in the summer of 2020. There was a Budget Prioritization Working Group across the university. And their charge was really, to balance the budget for the fiscal year 2021, looking at reduction in resources. So keeping that safety and health, the provost and the CFO really worked to try and figure out where can we reduce resources,” he said.


“Some of those resources were reduction in travel; there wasn’t any travel in 2021. Also reduction in some of the group experiences that we might typically have, because we were trying to be socially distant. But at the same time, the university prioritized the staff and faculty, so they didn’t have to lay anybody off, things like that, because other universities did have to do that. Other universities also took pay reductions, Stetson didn’t have to do that. And so I think we’re really proud of the way we were able to prioritize the community,” said DiGorio.


In DiGorio’s opinion, the university did better than expected financially: “We finished the last fiscal year in the black, which is always the goal of any university, so I think we did better than expected,” he said. ‘In the black’ refers to a business that is profitable and financially solvent.


“We also, towards the end of the academic year as we prepared for ‘22, really asked our staff and faculty to be very judicious when it comes to spending even with the budget that remained. So we really tried to be as frugal as possible to make sure that we could provide the best academic and student experience, but also make sure that we’re set up in the long term because we don’t anticipate receiving any additional federal funding,” DiGorio said.


What’s in Store

Given this information, what does this mean for the future of the university? According to Jeremy DiGorio, the university is on the right track.


“I think prior to the influx in federal funding last year, universities were very nervous about the long-term trajectory of what this would have on the universities. But because of the three iterations of that peer funding, it really allowed us to navigate and mitigate some of those additional expenses and keep us on a good, solid financial path,” he said.


In his opinion, the mitigation efforts that the university has made will be a significant help in the long run.


“I think there’s always going to be rising costs that are going to be challenges to us. But I don’t think that the pandemic has necessarily derailed us, because of the strategic decisions made by the university,” DiGorio said. “I think the rising cost of the economy, as a result of the pandemic is going to create challenges, but strategic decisions that we’ve made last year to really make sure that we can reduce the budget and reduce as many expenditures as possible set us up for a solid place in the future.”


In undergraduate admissions, Brian Fortman believes the university is positioned in a positive place now to provide students with the full college experience on campus.


“We have a great academic experience to provide for students now that our students are back on campus and they can fully engage in the other aspects of their college experience as well…The academics is obviously a big part of it, but there’s a lot of growth that students go through from that community aspect as well, you know, the relationships with their friends, being involved in leadership opportunities on campus, you know. So being able to have those opportunities back up and running is really exciting. I think it will help as we move forward,” he said.


Given the hand that they’ve been dealt, the changes that the university has had to deal with have come at no small cost. The pandemic is far from over, and consequently, we still have yet to see the full impacts of COVID-19 on the higher education system. Although we now have a more complete idea of where Stetson stands in terms of enrollment and its impacts, many colleges and universities have yet to report their own numbers for the fall 2021 term.


Will enrollment increase in the coming years as things creep back to some sense of normalcy? Or will the rise of new variants create an even more disruptive financial state for colleges and universities? Much is yet to be known, but if the Stetson plays their cards right, enrollment will hopefully be on the rise in the future.