After three years of research on transfer student strategy, we can say with confidence: if you’re reading this article, you’re probably not recruiting enough transfer students.
Simulations of classroom capacity utilization at a “typical” institution demonstrate that targeting a transfer share of 40% of the incoming undergraduate class maximizes tuition revenue and fills remaining seats without creating bottlenecks. The graphic below displays the results of the model, built from publicly available and proprietary data sets, including IPEDS data and our Academic Performance Solutions initiative.
In our analysis of 1,500 non-profit colleges and universities, three in four institutions did not achieve EAB’s optimal transfer target of 40% of their incoming undergraduate class. To make the 40% target feel more real, consider that if your institution has 1,000 incoming first-time freshmen each fall, you should be looking to recruit 667 new transfer students for that year as well.
The opportunity: Filling capacity with minimal academic overhead…
While lower-division courses are often space-constrained, upper-division courses typically operate at only 74% capacity. At the average institution, an estimated 23% of this classroom capacity is already being filled by transfer students, but that still leaves thousands of seats empty over the course of the academic year.
For the 10,000-student, “typical” university, assuming average net tuition revenue of $13,000, filling the remaining capacity to 90% (so as not to create bottlenecks) by increasing the number of transfer students could generate roughly $2.7M in additional annual net tuition revenue.
The University of Florida, for example, created a seamless 2+2 pathway in the engineering program in partnership with a local two-year institution.
While these fill rates are typical, discipline-level variations in classroom capacity utilization do exist. For example, institutions can target transfer recruitment to programs with excess capacity to increase enrollment with minimal additional overhead.
… And strong ROI for your team
While our model suggests that a typical institution should target a minimum of 40% of their incoming class for transfer students, for many institutions, especially those looking to grow, the optimal target may be even higher.
The enrollment ROI of acquiring a transfer student is similar to that of a first-time, full-time student, despite their shorter stay at the institution:
- Transfer students are easier to recruit because they tend to be concentrated at local two-year institutions.
- They yield at much higher rates (50% in 2015, compared with 36% public first-time students and 29% for private) than first-time freshman.
- They also typically pay 10-20% more than first-time freshmen, amounting to an additional $1-2k in annual average net revenue.
- They even graduate at 5-20% higher rates than native students across institution classifications.
Two-year transfers also tend to be more racially diverse and are more likely to be local, helping institutions meet their diversity and access missions.
Transfer targets still all too rare
According to our research interviews, only 25% of institutions have clearly defined transfer targets and only 15% have strategic transfer enrollment committees in place to achieve their goals. Only a fraction of institutions have taken the additional steps of reviewing their classroom utilization, systematically evaluating opportunities for program alignment with local two-year institutions, and developing strong pathways in those disciplines.
Obviously, our “40% transfer” target is just a starting point based on the abstract “typical” institution. We recommend you measure your existing classroom capacity by program, define your growth objectives, and, with your unique mission in mind, set your own meaningful transfer target.