THIS session we’ll dig into consumerism and SROI and what it means for your institution. Dramatic changes in both K12 and HE – due to many macro factors, but mostly economic, the consumer of education is changing, so too must the providers.
1. The Rise of the Informed Consumer
and Student Return on Investment
Todd Bloom, Ph.D.
November 5, 2012
2. Welcome & Overview
• The Higher Education Marketplace
• Overview of Students’ College Attendance
Decisions
• A Closer Look at Choices and Choice
Process
• A Closer Look at Information
• Student Return on Investment Framework
2
4. Impacting Students & Institutions
Plan & Learn
Institutional
Student Success
Effectiveness
Who are our
Who am I?
students?
Who is
My aspirations? struggling/succee
ding?
VIRTUAL How to
What’s my path?
STUDENT FAIRS intervene?
4
5. Impacting Students & Institutions
Engage
& Enroll
Institutional
Student Success
Effectiveness
How do we best DIGITAL
Where do I go?
reach students? MARKETING (HE)
What info How do we
PRINT MARKETING
do I need? get a best fit?
(HE)
CONNECT Who will How do we ensure
support me? a great start?
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6. Impacting Students & Institutions
Progress
& Succeed
Institutional
Student Success
Effectiveness
How am I doing Are student
versus my goal? supports working?
How do I Are they on-
get help? track?
Where are they
What next?
now?
6
8. 17.6 M undergrads in
U.S. higher ed today:
37% 32% 36%
Enroll part-time Work full-time Graduate in 4 yrs
What are these buyers’ preferences and requirements?
8
9. Factors that Impact the Higher
Education Marketplace
Demography
– Fewer high school graduates nationally
– Demographic shifts having different impacts in
different parts of the country
– Greater racial and ethnic diversity….
McGee, Jon, (2012). Disruptive Adaptation: The New Market for
Higher Education. Eden Prairie, MN: Lawlor Perspective.
9
10. Factors that Impact the Higher
Education Marketplace
K-12 student demographics (2010 to 2020)
• flat for students who are White; Black;
• increase 25% for students who are Hispanic;
• increase 36% for students who are Asian/Pacific Islander
• increase 17% for students who are American Indian/Alaska Native
HE student demographics (2010 to 2020)
• flat for students who are White; American Indian/Alaska Native
• increase 25% for students who are Black;
• increase 46% for students who are Hispanic;
• increase 25% for students who are Asian/Pacific Islander
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11. Factors that Impact the Higher
Education Marketplace
Unemployment
– Affected all types of families during recession
– Continues to influence economic behavior & choices
Family income
– Median income now similar to 1996
– Real income declined for all family types
McGee, Jon, (2012). Disruptive Adaptation: The New Market for
Higher Education. Eden Prairie, MN: Lawlor Perspective.
11
12. Factors that Impact the Higher
Education Marketplace
Home values
– Source of financial risk for many families
– An anchor to mobility
Family debt and savings
– Families change in habits during recession (saved
more)
– Will those habits stick?
McGee, Jon, (2012). Disruptive Adaptation: The New Market for
Higher Education. Eden Prairie, MN: Lawlor Perspective.
12
13. Factors that Impact the Higher
Education Marketplace
What other macro factors do you believe are
dramatically influencing the higher education
marketplace and how?
Partner, Discuss, Share
13
15. When making economic decisions…
“A consumer is making a choice to
maximize expected utility or
minimize expected cost.”
Hal R. Varian,
Berkeley Economist
people.ischool.berkeley.edu/~hal/Papers/sigir/sigir.html
15
16. When making decisions about attending
college…
Students compare the costsof
college with expected income gains
and other benefits.
Office of the Under Secretary, U.S. Department of Education.
(1998). Factors Related to College Enrollment. Washington, DC:
The Department.
16
17. College Attendance Decisions
Charles F. Manski& David A. Wise’s five factors
that are most associated with enrollment:
1. Academic aptitude
2. Family income
3. Cost and aid
4. Quality of high school
5. Labor market conditions
theop.princeton.edu/reports/wp/Fletcher%20THEOP.pdf
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18. College Attendance Decisions
Other important factors in a student’s decision to
enroll, such as:
Family expectations
The decisions of peers
theop.princeton.edu/reports/wp/Fletcher%20THEOP.pdf
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19. College Attendance Decisions
Some students are early adopters,
who assume from an early age that
they will go to college. Their decision
is where to attend.
Other students make an intentional decision in
middle or high school that they will go to college.
Where to go is their next decision, which
tends to be based on resources, academic
achievement, and other traditional factors.
theop.princeton.edu/reports/forthcoming/ANNALS_03_Grodsky,R
iegle-Crumb_Manuscript_June2009.pdf
19
20. College Attendance Decisions
When making decisions about attending
college…
What other factors do students consider?
Partner, Discuss, Share
20
22. Students have more choices
than ever…
FOUR-YEAR? PUBLIC?
TWO-YEAR? PRIVATE?
TRADE SCHOOL?
LIBERAL ARTS?
FOR-PROFIT?
ONLINE?
BLENDED LEARNING? IN-STATE?
MOOC? OUT-OF-STATE?
22
23. Number of Degree-Granting
Institutions in the U.S.
1980-1981 – 3,231 Colleges
1,274
2-yr colleges
4-yr college
1,957
nces.ed.gov/fastfacts/display.asp?id=84
23
24. Number of Degree-Granting
Institutions in the U.S.
2009-2010 – 4,495 Colleges
1,721
2-yr colleges
4-yr. colleges
2,774
nces.ed.gov/fastfacts/display.asp?id=84
24
25. Can people have too much choice?
Study #1 - The Jam Study:
• Researchers set up two tasting booths for jam – one
with 24 different flavors and one with 6
• 60% of customers went to the booth with 24
choices, and 40% went to the booth with 6 choices
• 30% of the customers with 6 options bought
jam, while only 3% of the customers with 24 options
made a purchase
Iyengar, Sheena S., &Lepper, Mark R. (2000). When Choice Is Demotivating: Can
One Desire Too Much of a Good Thing? Journal of Personality and Social
Psychology, 79(6), 995-1006.
25
26. Can people have too much choice?
Study #2:
• Students in an introductory college-level course were
given the option of writing an extra credit essay.
• Half the students were given a list of 30 possible
topics, the other half a list of 6.
• Students with the list of 6 topics were more likely to
write the essay than the group given the list of 30.
• Students given fewer choices for topics wrote higher
quality essays.
Iyengar, Sheena S., &Lepper, Mark R. (2000). When Choice Is Demotivating: Can
One Desire Too Much of a Good Thing? Journal of Personality and Social
Psychology, 79(6), 995-1006.
26
27. Can people have too much choice?
Study #3:
• Customers chose chocolates either from a display of
30 or 6.
• Customers reported greater enjoyment selecting
from the display of 30 chocolates.
• Later, however, customers who selected from the
display of 30 chocolates were more dissatisfied and
regretful of their choices than the customers who
chose from the display of 6 chocolates.
Iyengar, Sheena S., &Lepper, Mark R. (2000). When Choice Is Demotivating: Can
One Desire Too Much of a Good Thing? Journal of Personality and Social
Psychology, 79(6), 995-1006.
27
28. Can people have too much choice?
Conclusions:
• Having extensive choices in a trivial context can be
de-motivating (perhaps even more so in the context
of significant decisions).
• The only context in which people are more
comfortable with extensive choice is when they have
previous experience with some of the options.
Iyengar, Sheena S., &Lepper, Mark R. (2000). When Choice Is Demotivating: Can
One Desire Too Much of a Good Thing? Journal of Personality and Social
Psychology, 79(6), 995-1006.
28
29. Can people have too much choice?
Information can add to the problems of choice
overload:
• Too much
• Varying quality
• Too little
• Trustworthiness
But high quality information can overcome the
negatives of choice overload.
www.nytimes.com/2010/02/27/your-money/27shortcuts.html?_r=0
29
31. Where do students turn for
information about college choice?
Peers:
One study showed that conversations with friends
increase the probability of college enrollment. But if a
student’s preferred college isn’t popular with peers, the
student is less likely to enroll in that particular college.
theop.princeton.edu/reports/wp/Fletcher%20THEOP.pdf
School Counselors & Admission Officers:
College choice can be shaped by data. In one
study, providing graduation data increased
enrollment by 15% in the college with the higher
graduation rate. www.aei.org/papers/education/k-12/filling-in-the-blanks/
31
32. Where do students turn for
information about college choice?
Online Tools:
http://www.nasfaa.org/WorkArea/linkit.aspx?
LinkIdentifier=ID&ItemID=10761
32
33. Where do students turn for
information about college choice?
Online Tools:
33 Image from www.mmm.edu/become/aid/options/index.html/
34. Where do students turn for
information about college choice?
Online Tools:
34 studentloans.gov/myDirectLoan/financialAwarenessCounselingLanding.action
35. Where do students turn for
information about college choice?
Online Tools:
www.consumerfinance.gov/payingforcollege/
35 Image from
http://money.cnn.com/2012/04/11/pf/college/consumer_bureau_
37. Assessing Return on Investment
What information should students know when
making decisions about college?
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38. Assessing Return on Investment
What do you think?
Please discuss in small groups:
• What are good measures of student
return on investment? Consider…
o Student Body Profile
o Finances & Financial Aid
o Alumni Profile
• What other categories and measures
would you add?
Report back to whole group
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39. Assessing Return on Investment
Student Body
Profile
4 yr graduation
Average GPA?
rate?
Average GPA in
Retention rate?
major?
% participating in
Levels of student
international
engagement?
study?
Quality of career Levels of civic
placement? engagement?
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40. Assessing Return on Investment
Finances &
Financial Aid
What are tuition & Amount of need-
fees? based awards?
Amount of non-
% of students with
need-based
loans?
awards?
Average student
Loan default rate?
loan amount?
40
41. Assessing Return on Investment
Alumni Profile
Levels of % who go on to
satisfaction? graduate study?
Rates of career Levels of civic
placement? engagement?
Rate of alumni
giving?
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42. Assessing Return on Investment
What factors are most important to the
student?
Please discuss in small groups:
• Prioritize the factors – rank order
• Distribute 100 points among the factors
Report back to whole group
42
43. Assessing Return on Investment
What is the value to institutions in reporting
an SROI to students?
Please discuss in small groups:
• How might the institution change what it
offers students?
• How might you do your work differently, if
at all?
Report back to whole group
43
44. SROI
Are you interested in continuing this
conversation?
Hobsons is interested…
Assembling group of interested institutions in
developing an SROI index. Contact me for more
information.
44
Assuming most or all of you have a college degree or two and that your degree was the second or third biggest purchase of your life…Was your degree a good value? Do you feel like you got what you paid for? Anyone want a refund???Are you still deriving benefits from the degree – or has the dividends shrunk over time?Do any of you wish you had shopped around more before attending the institution? What additional questions would you have asked?THIS SESSION we’ll dig into consumerism and SROI and what it means for your institution
Higher ed marketplace: Very high level overview for contextStudent decision-making and collegeChoice and information impact one another --- an informed consumer is often a more selective consumer, but maybe notThen we’re going to try to build out a framework for an SROI analysis that will highlight what you/this group sees as the most important factors in SROI
Dramatic changes in both K12 and HE – due to many macro factors, but mostly economic, the consumer of education is changing So too must the providers
UNEVEN distribution of HS graduates: From 2008 to 2021 = Increases of more than 15% projected for 8 states; increases between 5% and 15% projected for 8 statesDecreases of 55 or more projected for 16 states and the District of Columbia
What are the implications for how these consumers will behave? What will their preferences be?How will they be supported by society (e.g. voters and gov funding of HE)?
Because of these factors, student college attendance decisions are shifting as wellLook at attendance decisions through the lens of a consumer
Higher achievement = more likely to enrollHigher income = more likely to have a parent with college degreeMore aid Higher quality of of HS = higher income = more likely to have a parent with college degreeTricky – pro-tracked unemployment = less likely
First generation – spoke with Assoc Supt of College Readiness in El Paso – parents don’t want their kids to leave home.Peer group is incredibly powerful, though more so in earlier years – again linked to family income
There is some fascinating info on selection…Where to go? Did you know that being male more than doubles the odds of attending a first-choice schoolIn the end, social context and expectations matter John Ogbu’s study (1978) of educational achievement differences between majority and minority groups across several societies reinforces this point (Vietnamese ed attainment and college participation in Australia = low, but opposite in U.S.)
There is some fascinating info on selection…Where to go? Did you know that being male more than doubles the odds of attending a first-choice schoolIn the end, social context and expectations matter John Ogbu’s study (1978) of educational achievement differences between majority and minority groups across several societies reinforces this point (Vietnamese ed attainment and college participation in Australia = low, but opposite in U.S.)
OVER 30 years = 29% increase in number of institutions
Buyer’s remorse????
NAME SOME POOR QUALITY INFORMATION THAT prospective college students encounter:LoansSelectivityTCO/CostPersistence challenge
Uniform financial aid award letter (Financial Aid Shopping Sheet)Know Before You OweDATA Button and SAR
Financial Awareness Counseling
Consumer Financial Protection Bureau Cost Comparison Worksheet (now being revised from beta)
Rather tough marketDecision-making and choice behaviors that may be out of our controlProliferation of informationHOW DO WE CLARIFY OUR VALUE TO OUR PROSPECTIVE STUDENTS?