PHEV48N3_ResearchArticle_Reduce CurriculPHEV48N3_ResearchArticle_Reduce-Curriculum-Costs.Hoyt_.author-review_SCUP-MAY2020um Costs.Hoyt.author review_SCUP MAY2020

By clicking the link above, you will be directed to Kenneth L. Hoyts Research article, “Reduce Curriculum Costs While Increasing Student Enrollment.”

Introduction
Kentucky colleges and universities had been
looking for ways to reduce their academic costs and
increase their student enrollments. Addressing those
objectives was the focus of Optimizing Academic
Balance (OAB), a process that generated the findings
of the detailed report that informs this article. The
groundbreaking OAB research is the only multicollege, statewide project of its type conducted to
analyze academic costs. The James Graham Brown
Foundation, which provided a grant to the Association
of Independent Kentucky Colleges and Universities,
supported the project.

RESEARCH ARTICLE
Reduce Curriculum Costs While Increasing Student Enrollment Optimizing Academic Balance Analyses Let Kentucky Institutions
Stay Competitive
by Kenneth L. Hoyt
Results of the study supplied evidence needed to support tough institutional decisions. The 13 Kentucky colleges and universities  that participated in the research now have critically important data to use in making choices about how they best serve their students,
maximize scarce resources, and sustain financial stability.

The total impact of the entire OAB analysis for the 13 AIKCU participants has the potential to produce $37.9 million in bottom-line improvements.

What is Optimizing Academic Balance and How Does it Work?
Many colleges were facing tough financial choices
and required the means to improve their bottom line.
OAB provided colleges and universities with neverbefore-available, effective tools to use in making
tough financial choices and crucial academic decisions
needed to stay competitive in the student market.
The OAB analysis was completed in the context
of institutional mission, program quality, market
potential, cost, and revenue.

An OAB:
• Examines the cost and long-term viability of each academic major and general education
• Identifies opportunities for enrollment growth or expansion
• Recognizes areas where costs may need to be contained or reduced
• Provides knowledge that planners may use to redirect scarce resources to increase enrollment, maximize the value of the curriculum, and strengthen institutional viability OAB utilizes market potential data (admissions
inquiries; number of applicants; number of admitted students; and numbers of enrolled students, juniors,
and graduates) to measure demand for an institution’s
academic offerings. It uses student credit hours
(SCH) generated by programs as a proxy for revenues
and the direct (faculty and departmental) costs
for teaching each program. OAB may be applied
to all academic program offerings: undergraduate,
graduate, and non-traditional.

Kentucky Independent Colleges and Universities
With study results, Kentucky’s independent colleges and universities that are members of the Association of Independent Kentucky Colleges and Universities (AIKCU) were able to compare their costs and
performance for the first time with that of other
private institutions across the Commonwealth. That
was the outcome of the OAB analysis that produced
data-based tools that colleges and universities could
rely on to guide strategic decision-making and the use
of scarce resources.
The analysis, “Optimizing Academic Balance: Mission,
Quality, Market Potential, Cost, and Revenue,” gave
college leaders critical information as they worked
to provide programs and services for thousands of
students in Kentucky. It provided fact-based, college specific insights that the leaders could consider as
they addressed such key questions as:

• How can you be sure you are making the right decisions on programs and majors to attract and retain more students?
• What is your institution spending on specific majors, and how does that compare to similar colleges and universities?

• What majors are working well for students and that lead to graduation?
• What innovations might help make your college more competitive and improve its bottom line while sustaining unique values and mission?

A Backstory
For the past three years, 13 of the 18 AIKCU members had been engaged in compiling existing data, reviewing results, and determining what strategic changes could be made to improve the efficiency and productivity of their academic programs. The result was an academic cost analysis that gave the participating Kentucky institutions the ability to compare the cost of delivering their individual programs with the cost of their peer institutions doing the same. It also gave each college specific information on academic majors that had the potential to grow and attract more students, generating additional revenue; majors with issues affecting students’ success; and majors that could be scaled back or eliminated to reduce costs. The combined results from all colleges that took part in the analysis include the following findings, while figure 2 shows the bottom-line impact across all participating institutions.

• More than 120 academic majors at Kentucky’s independent colleges and universities had the potential to grow to meet the needs of more students and generate more revenue.
• Many of the challenges the institutions faced in ensuring student success could be addressed, resulting in more students graduating and producing more revenue for the institutions to provide programs, services, and financial aid.
• Very few majors needed to be reduced or eliminated to cut costs.
• Collectively, the institutions had the potential to add $37.9 million to their bottom lines.

The Facts to Face the Challenges
Kentucky’s independent colleges and universities faced the same challenges as other independent institutions across the nation: They worked to control costs and make higher education more affordable, maintain academic quality, and improve productivity.
In many cases the institutions had a particular interest in pursuing innovations and growth while upholding the values and missions that had historically guided their work. Making the best decisions to address those challenges required more than anecdotal evidence. Reliable data were the key. But that strategic decision-making
tool had not been previously available in a way that
could help the colleges identify and quantify their
successes, as well as pinpoint areas within their
institutions that could perform better. The OAB
analysis changed that, helping institutions align their
mission, quality, market potential, cost, and revenue
in support of increased enrollment and improved graduation rates.

How colleges and universities would
choose to use the benchmarking
data would be unique to each
institution and its particular
circumstances.

However, getting to that point of alignment required
extensive work by institution leaders, faculty, and
staff to provide the information that was necessary
to ensure an effective and reliable data-collection and
data-assimilation process. For example, determining
demand and market potential by academic major
required collecting five years of performance data on admission inquiries, applicants, admitted
students, and enrolled students. The numbers of
junior-year students and graduates by major were
used to measure student success. Detailed course
information, ranging from credit hours to numbers
of students enrolled in courses to faculty workload,
was compiled. Costs were determined using faculty
salaries and benefits, departmental costs, adjunct
faculty stipends, and other factors.
The analysis evaluated a total of 311 academic majors
at the 13 participating colleges.

Most colleges that completed an OAB analysis found that they had academic programs where the level of admissions inquiry was low, but the number of juniors and graduates indicated an opportunity to grow the enrollment. Some majors had high levels of inquiry but low levels of juniors and graduates, indicating that the major had student success issues that often could be improved, or, if necessary, the major could be cut back or eliminated. Student success, as shown in figure 6, was determined by the number of students that had enrolled in a certain major and continued through their junior year and graduation with that same major. Success
issues were those that prompted students to change a particular course of study or withdraw from the institution.

The OAB analysis offered reliable data that the institutions could use to guide their strategic decision making and use of resources.

Researchers found that the finding that costs should be reduced in a relatively small percentage of academic majors, that
very few majors should be dropped altogether—was evidence that the colleges were already operating efficiently.

The Key to a Strategic Approach
The OAB analysis offered reliable data that the institutions could use to guide their strategic  decision-making and use of resources. It provided detailed, comparative information on demand, costs, and student outcomes. Additionally, and perhaps most important to the participating institutions, each college or university received a customized, confidential report that included:

• Market demand potential
• Student credit hours generated by academic major
• Costs and revenue generated by academic major
• A focused set of recommendations regarding which academic offerings represented growth opportunities based on market potential, which programs were unlikely to attract more students, and possible programs that could be reduced or eliminated
• Academic major cost comparisons with other independent Kentucky institutions

Projections
Across all 13 AIKCU institutions, the average number of programs with potential for growth was 10, the average number of programs with student success issues was 3, and the average number of high-cost programs was 3. Therefore, a typical institution could
potentially realize.

1) a growth of 10 additional students in its 10-growth programs for an amount of increased revenue of $1,400,000; 2) retention of an additional 10 students in each of its 3 programs identified with student success issues for an additional cost savings
of $750,000; and 3) reduction of costs in its 3 high cost programs for savings on average of $900,000.

Addressing Varying Program Costs
With the OAB analysis, participating institutions had gained a barometer—a way of measuring how their program costs compared to their peers.
A number of factors had contributed to the varying costs. For example, specialized accreditations increased costs, longer-serving faculty members had higher salaries, and some programs required more financial support because they were designated as centers of excellence. And where there was no apparent reason for a particular institution’s higher expenditures, the OAB analysis provided the tools that enabled a college to conduct a deeper review of possible changes that could reduce costs.

Conclusion
When the detailed, individualized findings of the analysis became available, the colleges were in a
position to use the data as part of their strategic planning. They could identify opportunities for growth, compare costs with other institutions, recognize programs where changes could produce more revenue, and identify other key elements to improve their competitive position and strengthen their bottom line. The OAB report was given to the institution presidents, who would then
decide how to present and use the findings on the individual campuses. The analysis had not made recommendations for specific actions. Rather, it provided the foundation for decision-making that would be based on facts and actual results.

How colleges and universities would choose to use the benchmarking data would be unique to each institution and its particular circumstances. They could choose from a range of options based on the analysis that was specific to their institution. Examples
included:
• Continuing a program without changes
• Investigating why their program costs were
greater than those of their peer institutions
• Addressing student success issues in selected academic majors

• Engaging faculty in strategic academic decisions
• Selecting which majors the institution would
choose to grow to increase its financial standing
By strengthening their bottom line, Kentucky’s
independent colleges and universities would be able
to expand their services, financial aid offerings, and
the support they could provide to ensure greater
opportunities for more students to obtain a quality
higher education.

Author Biography

PHEV48N3_ResearchArticle_Reduce-Curriculum-Costs.Hoyt_.author-review_SCUP-MAY2020-2 (1)

KENNETH L. HOYT, PHD, is founding principal and president of The Higher Education
Practice, LLC. He has a 30-year career in higher education, having served as president of
Centenary College of New Jersey, president of The Ohio Foundation of Independent Colleges,
Inc., vice president for The University of Akron, and in various leadership positions at Otterbein
College and Baldwin-Wallace College. He holds a PhD in higher education administration and
leadership from Ohio University, an MA in journalism/PR from The Ohio State University, and a
BA in business administration/marketing from Baldwin-Wallace College.