Enrollment Pathways to Financial Sustainability: Choosing the Road Less Traveled

Abstract

Rising costs, burgeoning debt, and falling credit ratings are among the financial challenges faced by small, tuition-dependent private colleges, including many members of the Council for Christian Colleges & Universities (CCCU). In their efforts to generate more revenue, most of these institutions have focused on enrollment strategies as the primary pathway to sustainability. This study explored the question: Do enrollment-focused efforts improve the financial condition of these institutions? Using a multilevel model, the influences of admitted student yield rate, undergraduate enrollment growth, enrollment in graduate and nontraditional programs, unfunded tuition discount rate, and institutional aid from donor sources were correlated with Composite Financial Index (CFI) scores during a four-year period. The results supported the need for a balanced financial strategy with priority given to increasing donor resources. Positive trends in undergraduate enrollment contributed to increasing financial health in some time periods. However, as unfunded discount rates or admitted student yield rates increased, constraints were placed on financial performance. No significant correlation was found between graduate and nontraditional programs and financial health.