Are Grad Schools Entering Survival Mode?

0:00:12.0 Speaker 1: Hello and welcome to Office Hours with EAB. Today, enrollment experts Beth Donaldson and Todd Hielman dive into one of the biggest challenges in graduate education. How to strengthen domestic student recruitment, as international enrollment slows. They explore what graduate students are really looking for, how smaller schools can stand out against big online competitors, and the strategies enrollment leaders can use to sustain graduate growth in a shifting market. So sit back and I hope you enjoy.

0:00:48.7 Beth Donaldson: Welcome to office Hours with EAB. My name is Beth Donaldson and I’m the Managing Director of Adult Learner Consulting Services, working as a part of EAB’s Adult Learner Recruitment team. Today I would like us to unpack one of the most pressing issues facing graduate and adult serving institutions, the desire to grow their graduate enrollment, and that is how to really strengthen your domestic student market and recruitment efforts at a time where international enrollment is on the decline. So to help us explore the challenges and strategies, I’m excited that joining me today is my colleague and friend Todd Heilman, who’s a senior consultant and principal for Adult Learner Recruitment here at EAB. Todd, thanks so much for joining us. Can you get started with introducing yourself and sharing just a little bit about your role here?

0:01:40.5 Todd Heilman: Sure. Thanks Beth. I’m really excited to dig in today as well. As Beth said, my name is Todd Heilman. I have the pleasure of serving here at EAB as a senior consultant principal in our Adult Learner division. In my role, I work closely with our partners to ensure that they are prepared with the latest research and well positioned to meet their strategic enrollment management objectives. I’ve had the pleasure of serving this role for the past three years, but I’ve partnered with EAB for most of the 20 plus years that I have been on campus. I’m a former practitioner. I have served in various different roles from VP of Student Success, VP of Enrollment, Student Affairs, Marketing. I’ve kind of run the gamut of administrative positions. So throughout that time I have found this information extremely valuable. So I hope that everyone on the line today finds this valuable as well and really looking forward to digging in with you further today. Beth, I know you have a direct line of insight to this information as well.

0:02:33.3 Beth Donaldson: Yeah, I’m so excited with your expertise and I know that we’re going to have a lively discussion and you will keep me on my toes today. So Todd, we’ve right now seen so many headlines about international enrollment declines as well as just the changes that we anticipating an international student interest in U.S. Education. And so it would be great for our colleagues who are leading graduate enrollment efforts today to really understand from you, what does that matter? Why does it matter so much for them? And our graduate teams today really already seeing a decline in foreign students for the fall and potentially for the spring.

0:03:18.1 Todd Heilman: Yeah. This is such an important topic and question, and I’m really glad we’re talking about today. And I hope that this is really top of mind for all of enrollment professionals. We’re really seeing an immediate and dire impact to international students, and this is resulting in a 40% decline in international student interest in U.S. Programs. But I think more important than that, and I shouldn’t say more important, equally important to that is there also $3 billion in lost tuition revenue that’s occurring across the industry today. The current open doors projection for international enrollment has been modified just recently from a projected 3% increase to a 15% decline. However, I think this projection is still optimistic and I would not be surprised if we saw a 20 to 25% decline. And that decline may continue at least over the next several years. But the loss of international students and the loss of international revenue, many experts are projecting that this could take a decade to recover, if we ever recover to where we were from historical enrollment and revenue standpoints. So this has a cascading effect to everyone I know as I work with my partners, and probably the same for you, Beth. There may be institutions who say, well, we have a very small international enrollment, so this really doesn’t affect us. But the reality is this cascading effect really affects everyone. So it really has to be top of mind for every institution, whether you are relying on international enrollment, international tuition dollars, or not. So the need to expand your domestic student population and your domestic funnel is critically important to all enrollment leaders today more than ever.

0:04:33.3 Beth Donaldson: Yeah, Todd, that’s so interesting, right, in terms of that we’ve historically really relied on international student enrollment as we were thinking about the demographic cliff, right? And to your point, the effects here, at this point, we’ve seen some declines in the past, but now these declines may not see a turnaround on that in the next year or two, right? And so I think that’s really different this time around than in prior times that we’ve seen kind of decreases in international student enrollment due to the pandemic, right, or changes in interest in programs. So how would you really characterize this effect being different for both undergraduate and graduate than what we’ve seen in the past more so?

0:05:50.9 Todd Heilman: Yeah, great question. And to kind of amplify my previous point here, this cascading effect, I’m going to continue to say cascading effect, because I just think that’s what it really is. It cascades down from elite institutions all the way down to small private institutions. So the concept that I like to put this in is if we look at some elite institutions, they may have 10, 20, even 40 % of their student population is international. That student population is now at risk, right? So if we put that in a volume perspective, and I’m just going to say university X may have 10,000 international students. If they now have to supplement those 10,000 international students with domestic students, they have to enroll a multiple of those students. Right. So to supplement that tuition revenue, they may have to enroll 20,000 or 25,000 or maybe even 30,000 students to equate to the lost tuition revenue. So that’s where that cascading effect occurs. And institutions who historically have known their primary competitors now have new competitors they have never had to compete with because these institutions who are relying heavily on international enrollment have to expand their domestic footprint. So they’re reaching out and pulling students from other small private, small regional, even public institutions. Everyone is actually being affected by this today.

0:07:21.6 Todd Heilman: So that’s that cascading effect. I think that’s what’s different today. I’m not sure, other than the pandemic, that we have ever seen this type of disruption in the international market. And obviously, we do not want to have a political discussion today. But there was a downturn during the last administration, not to this extent. Now it’s even more drastic, more executive orders, more targeting towards loans, financial aid, optimization models. All of these things are now impacting research funding. I can just go on and on with these things are all converging at the same time, forcing this downward pressure on institutions for that tuition revenue or enrollment managers to build that funnel and to find alternate students to build that those loss of revenue or hate to say, butts in seats. Some enrollment managers like this would call it butts in seats or tuition revenue. But, both of those things are being significantly impacted today. So with that said, Beth, I know you’re talking to deans and admission leaders all the time. You’re on campus each and every week. What are you hearing during those conversations?

0:08:40.6 Beth Donaldson: Yeah, I mean, there’s so many different headwinds that are facing enrollment leaders right now. And so in discussions, you’re exactly right. The first thing that they’re saying is we’re really concerned about our overlap schools that are we’re seeing being more aggressive in their tactics to steal market share of our domestic students. And then as they’re thinking about and anticipating that they may have to make some really deep budget cuts at their institutions right across the board, I think a lot of enrollment leaders are saying that they’re feeling the pressure more to increase that domestic student market to be able to move the needle in terms of their net tuition revenue as their institutions are really saying we’re going to want to strategically have enough resources to innovate our academic programming or think about the changing immorality to reach international students who may not be physically able to come to the U.S. And being really thoughtful about having resources to increase and enhance their student services. So we’re having a lot of tough discussions, but really excited about being able to support our partners in this really important work to diversify their enrollment pipelines. So that’s a really great question, Todd. But let’s take it a little bit further, I think. Can you talk a little bit about the current state as we’re thinking about how they make additional plays and changes in recruiting domestic students for their graduate programs? I mean, right now, how do you feel in terms of how difficult it may be to fill their overall graduate enrollment targets, especially in some areas such as STEM, which we know a lot of international students are involved there? And as institutions are thinking about how they shift revenue and resources to really focus away from international student recruitment and focus more on domestic student recruitment.

0:10:48.7 Todd Heilman: That’s great, Beth. I’m really glad that you brought up the STEM component because international enrollment is a critical component to STEM programs. As a matter of fact, if we look back to fall 2024, 56% of STEM master’s program enrollments were made up of international students. That’s an incredible number, an incredible population of students that are now at risk. So many institutions, those that are heavily reliant on STEM programs, now have to again make up that volume elsewhere. 56% of the population, I’m not sure if I have seen in my career a percentage of the population that is at risk, such as STEM programs. So I think that that’s critically important. The more that we look at this and we start to drill down even further, for graduate students, we know that they are taking a much longer time to nurture, to do their pragmatic research, and to ultimately apply. So as we develop our graduate enrollment plans or overall strategic enrollment management plans, yes, it’s important to keep these STEM impact numbers in mind, and we will all be impacted by those. But the time that it’s going to take to dig out of this is an extended period of time because again, these adult learners are taking 18 plus months on average to first apply to an institution.

0:12:20.0 Todd Heilman: So the dig out of this is going to take a long nurturing process that many institutions today are just not equipped to do. I don’t know if I have been on a campus or talked with anybody on a campus who nurtures prospective students for more than a year, nevermind 18 months, 22 months, or even 36 months where we’re seeing that timeline go out that far. So critically important to have that nurturing program to move students along through the funnel, to have the incremental growth targets to get you there. So lean into your institutional value proposition. I’m kind of giving away some of my own thunder for the end of this podcast, but I think it’s important to note that here as well, that this is not a short-term fix and institutions really need to double down and dare I say reinvest or invest more heavily in their graduate enrollment marketing, right? Because we know that graduate enrollment targets are being increased for enrollment leaders, but the budget dollars are not yet moving along with those increased targets. So critically important to readjust those things and then to readjust your overall recruitment strategy.

0:13:37.2 Beth Donaldson: Thank you, Todd. I love the fact that you gave them a little bit of highlight and really great thoughts on how to build a successful graduate enrollment strategic plan like that gym plan. Because I think that that is so important to think about the resources, the goal setting, and how long to nurture students in this work because we know adult learners take anywhere from 18 to plus months to enroll. So let’s pivot a little bit now and talk about the competitive landscape. How should schools be thinking in terms of how to differentiate themselves from their competition, their current overlap schools, or maybe the institutions that they aspire to overlap with in the future? And really, really talk a little bit more about how they need to do things differently now than they may have done last year or two years ago in the recruitment process.

0:14:40.2 Todd Heilman: Yeah, great. Thank you. So we all know the competitive landscape is expanding and changing significantly. Historically, most institutions knew their competitors, right? They consisted of local and state universities, maybe some regional power outlets, or other primary market competitors who had similar program offerings. We all knew those were our primary competitors, but that is now changing. Now we not only have our historical competitors, right? We have more selective elite institutions and national online giants as well. And to make things even more concerning, the online giant competition is expanding, right? To put this into perspective, in fall 21, the traditional online giants such as the Liberties, the Western Governors, SNHU, the ones that we are all familiar with, were enrolling about one in five online graduate enrollment students, right?

0:15:32.7 Todd Heilman: So therefore, they were controlling about 20% of this market. Fast forward to fall 22, and we saw the emergence of new online giants, right? And this has been a significant shift as these new players have really have strong brand recognition. They have a strong hold in the marketplace, and they include brands such as Georgia Tech, Purdue Global, Johns Hopkins, even Harvard’s in this space now, as well as others. So in fall 22, these large brand name players grew at three times the rate of the traditional online giants, that’s a major disruption in a very short period of time. And even when we start to look at fall 23, the new online giants are still outpacing their traditional online giants in growth. So we like to tell our partners that, we don’t want you competing with the online giants just because you can’t put marketing spend. They all spend in excess of $120 million annually just on their media budget alone. $120 million is more than most institutions’ entire operating budgets, right? So you really can’t compete with them from a marketing perspective. The annual investment that we look at should really be tied to your region, the type of institution that you’re at, and your overall enrollment goals, right? So you almost have to reverse engineer your marketing spends to meet your projected enrollment growth. And to add another layer of complexity to this, we also know that while you’re doing that, there’s extreme cost-consciousness in the marketplace as well.

0:17:16.8 Todd Heilman: So as you start to diversify and to think about how you’re going to re-enroll these students, not only are you competing with these new players in the online space, you’re also competing with the mindset of prospective adult learners, and that is extreme price sensitivity in the marketplace. We used to say price sensitivity, now we say extreme price sensitivity. And one of our latest prospective student surveys, we found that 47% of adult learners are expecting to receive scholarship at the graduate level. A few short years ago, that was unheard of. And I think that’s up 17% in just two years. So that’s showing that extreme price sensitivity in the marketplace today. So institutions need to look at if they don’t currently have a financial aid optimization model, typical to what you would see on the undergraduate level, that is now common practice, and I dare say standard practice at the graduate level because it is required to meet students where they are today. I’ll also say that most students are looking at three things. So as you’re thinking about recruiting adult learners, the three things that you should really look at intently, and it should be on every one of the institution’s program pages, are cost, speed to completion, and ROI or social proof. That’s much different than what we used to look at with adult learners. Adult learners were not so cost conscious. They were always ROI conscious, and not so much speed to completion conscious, right? So things are changing in the marketplace today where you have to meet these students where they are, and thus many institutions are forced to either revise their current graduate enrollment plan or develop a graduate enrollment plan to meet these needs. So that’s a very long-winded answer. Great question. I know that we can dive into this in much more detail, but when you’re working with regional or smaller institutions, what advice best do you offer them in terms of competing against or differentiating themselves from giants, whether they be the historical online giants or the new players in this space that we talked about as well?

0:19:34.0 Beth Donaldson: That’s such a great question. I personally feel that most institutions are not able to effectively address the question of differentiation because I think most institutions really rely on talking about we have small class sizes or it’s a close-knit community, especially if it’s a small liberal arts institution, or that they have engaging faculty. And yes, I know and you know that those are wonderful characteristics for institutions to have, but we have to talk about those characteristics and couple them with what really matters to adult learners. And that is really how their academic coursework is tied to specific industry outcomes. Adult learners really want to know how extensive is this skill development going to be that I have? And so they’re looking at internships and research opportunities because in their minds, they want academic preparation that is really going to help them to reach their goals, which what we found in our survey, right, in our work with adult learners is the opportunity to advance their career or the skill sets to change their career. And so you said it so effectively, Todd, they’re looking for that ROI. And so I think what really matters for small institutions, regional institutions, is to really be able to hone in on the outcomes of their alumni to talk about the experience coupled with the support in order to differentiate themselves from the larger giants such as Southern New Hampshire or Western Governors in this space right now. So thanks for asking that, Todd. I love talking about that. So Todd, you mentioned about graduate degrees among domestic students, maybe softening. Can you explain a little bit more about what you think we’ll see and what’s driving that shift in their mindset to maybe pursue a graduate degree at this point in time?

0:21:46.1 Todd Heilman: Yeah, that’s a great question. And I think, what we’re looking at overall as an industry and as an industry, I just mean higher ed at large. We are fighting a media narrative now on the value of higher education, the ROI and the need for it overall. Right. Historically, when we look at graduate enrollment in times of growth, we typically see times of growth are in times of recessionary periods. That’s been typically the trend. And we’re not in a recessionary period today, per se. But the overall job market is not great. So we would typically see graduate enrollment growth. And we did see some growth for fall 24. It actually exceeded the National Student Clearinghouse projection, which was 1.3 %. But the national average was 3.3 %. But what’s hidden in that is really, where that growth occurred. That growth occurred primarily at private for-profit institutions or AKA the online giants. Right. So they did see that growth across the board. We did see some institutions or some geographic regions for growth as well. But it wasn’t at the level as those private for-profit institutions. So I think, first off, it’s really, the value of higher ed, that’s why your point about, value proposition and really strengthening your program messaging is really critical. So prospective students understand the outcomes that are expected. We’re also seeing competing priorities. That’s why speed to completion is so critically important. Right. Again, through our student surveys, we know that the overwhelming preference for prospective graduate or adult learners, I should say, is to be in person for their program.

0:23:42.6 Todd Heilman: But the reality is that just does not fit in their life cycle. Right. So they are preferring to be in person. If they’re continuing their educational journey, they’re thus enrolling, though, in an online program because that’s what’s facing against their life cycle. They may be raising a family, they may be working full time, they have competing pressures on their life cycle. So I think that’s important. And then ultimately, what I think we need to do, we again, education at large, is just to do a better job of understanding the social rules, the ROI piece on what a student can expect post-credential. And one of the drawbacks that we do is many institutions will put the starting salary with the credential on their program page. And more times than not, that’s not very impressive. So what we encourage our partners to do is to put the median salary at the midpoint of their career on their program page because that becomes much more impressive. So I think that’s part of the softening is just re-educating students. I think, in all honesty, the other piece is just a lot of uncertainty in the marketplace. Everyone’s seeing what’s happening with this international piece, with all of the executive orders that are in place, with the FAFSA debacle that we had last year, with the loan forgiveness debacle that we’ve had. So there has been a lot of black eyes on the industry over the past couple of years that we now need to speak to directly and overcome what may be a hangover negative effect for what’s happening across the board in the media today. So with that, we know that students are also applying to fewer schools. We’ve seen that across the board. A couple of years ago in our survey, two years ago, we know that the prospective student was applying at the graduate level. So an average of about two institutions. That has now increased slightly. I know this has implications for student recruitment and engagement strategies. How are you seeing schools adjust to this approach?

0:25:55.7 Beth Donaldson: Yeah, well, we really are counseling our partners and institutions that we really work with to really think strategically about how they reach students so that they will end up on that final list that they apply to. And so most importantly is making sure that their website is optimized to talk about those points that adult learners really want to know. And that’s the time to completion, the total cost, right, the modality and the outcomes very clearly that they can get to and navigate to within 90 seconds or we lose them. And so really being very thoughtful about maintaining your website pages, talking about the outcomes are key for you not to have students walk away from you and make the decision, right, maybe inaccurately that you’re not the right place for them based on the fact that they can’t find that information and that we want you to ultimately be one of the two or three schools that they’re able to apply to, right, and get their decision to them in a timely manner, definitely.

0:27:06.6 Todd Heilman: I mean, this is certainly important. And from your perspective related here, if a VP of enrollment today could only change one thing in their recruitment approach tomorrow, what would that one thing be?

0:27:18.9 Beth Donaldson: Oh my gosh, Todd, we’ve been friends for too long for you to throw out that question to me. I think that’s so hard. I have a list of probably 20 things. But I would say if the institution is really committed to growing their graduate enrollment and being able to increase their yield of adult learners, then I would say thinking really carefully about the admission requirements that they have will be important to this work. So removing application barriers such as having a requirement of three letters of recommendation and a personal essay and a creative review is something that, yes, it’s great for us to have five years ago, but not necessarily for us to have to make the right decision about an applicant. So I think if we are able to have programs reduce those barriers, right, have it very clearly outlined on their website, and as I mentioned, a clear turnaround in that mission decision so that your acceptance letter is first for them is something that we now need to strategically do for adult learners, and we haven’t done that in the past. We’ve done that for traditional age students, right, 17- and 18-year-olds thinking about undergraduate, but now we have to be very responsive to meet the needs of adult learners because once they make the decision to apply, we want to reach them before they make the decision that this may not be the time for them, right? Because as you mentioned, we know that the echo chamber says a lot about being cautious about pursuing a graduate degree. We know that graduate education is transformational for their life, and so we’ve got to make sure that we articulate that and make every stride to get them enrolled in our program so that they have amazing outcomes in life.

0:29:18.1 Beth Donaldson: So thank you for putting me on the spot there, Todd. I’ve probably talked way more than what you wanted, but as we think about just kind of final takeaways for those that have joined us in the podcast today, right, we know that there’s a dozen threats right now, Todd, facing higher education, but what’s one piece of advice that you would leave graduate enrollment leaders with as they navigate a path forward to really being able to grow their enrollment and diversify their future pipelines?

0:29:55.7 Todd Heilman: Now, that’s funny because you know that I’m not going to be able to give you just one piece of advice here, just as you weren’t able to give me one on the prior question.

0:30:03.6 Beth Donaldson: And I won’t hold you to just one, as you did for me, even though I cheated and threw in a couple of extra ones, if you noticed. Go for it, Todd. Give us all of your knowledge.

0:30:15.7 Todd Heilman: So I would say, there are several, and this is just a small subset, but when it comes top of mind to me, again, enrollment leaders really need to understand and plan for the extended periods of nurturing prospective students. That’s critically important. You have to be prepared to communicate with them up to 36 months. So plan for that in your communication workflow. I would also say, really rely on your institutional value proposition. And that seems so basic, but more times than not, when we’re sitting with admissions professionals, it becomes a very difficult question. When you ask someone, what is your institutional value proposition, you typically get a different answer from everyone. And everyone needs to know the elevator pitch of their institution and their value proposition. That’s critically important. And with that value proposition goes the other components that we have both mentioned. That’s the social proof and the ROI goes along with the value proposition. I also want to say that, we need to understand the extreme price sensitivity in the marketplace today, and we mentioned this earlier. We need to understand that price sensitivity and possibly look at our financial aid optimization models to ensure that we are meeting those students where they are.

0:31:38.7 Todd Heilman: And then I’m going to double down on diversifying your lead resources. Historically, we have relied heavily on test takers or from traditional lead sources. Now we need to be much more creative in capturing prospective student on our web pages. And, puts us into perspective for the audience. A decade ago, about 20% of the market was stealth. In today’s environment, 80% of the market is stealth. That makes predicting your enrollment targets really difficult because your institution does not know about these prospective students until they apply. That’s their first window into their communication plan. So critically important to think about those things. I can go on and on with many, but I know we want to wrap this up. And, we are here as resources. Beth and I love to talk about these things. So you can always feel free to reach out and talk about these things with us.

0:32:41.7 Beth Donaldson: Big sigh, that information is so helpful. I think before we go, though, I’d like to throw out a question for you. And I’m free to answer it as well. As both of us are former VPEMs overseeing graduate enrollment, what do you feel like is the one mistake that you made in the past in your recruitment efforts that now, with all of the research from EAB you’ve learned, but that you would say? Would you like me to answer the question first before you answer it?

0:33:16.2 Todd Heilman: No, I’m happy. My mistakes are top of mind.

0:33:20.9 Beth Donaldson: No questions about that. So self-aware.

0:33:22.9 Todd Heilman: Yeah, I think what many of us do is we lean on our laurels. We think that there are certain programs that are going to fill up regardless every year because there’s that continued demand. And one of the programs that I’ll just throw out that is not seeing the same demand that has seen historically is pharmacy. Typically, pharmacy programs, you would think we didn’t have to recruit for them. They kind of recruited themselves, and they filled their own class. Across the board now, I can’t think of one program that fills itself. Even when I was at a performing arts institution, we would always say our performing arts programs would fill themselves. That’s no longer the case. So every program, regardless of what its historical demand was, requires this in-depth planning and the need to move things along and change our recruiting structure. So that comes top of mind for me, but I would love to hear your thoughts on that too, Beth.

0:34:25.2 Beth Donaldson: Yeah, you are so right, Todd, right? We kind of, when we have success, we don’t really think about modifying our approach. And so that’s similar to my biggest mistake. And I think having a particular pipeline that has performed well has made me feel like, oh, we’re all good with that program, right? And not being very strategic to say, yes, we’ve been able to get a lot of students, per se, from one particular county, but let’s diversify the counties that we’re recruiting at. Or let’s look at different international student markets that have historically performed a little bit lower for us in the past. So thank you so much, Todd, for joining me today. And thank you for our listeners for tuning in to another Office Hours with EAB.