Plumbing the Mysteries of College Application Data

One of my goals at Bacon’s Rebellion is to divine how colleges and universities function as business enterprises. What are the key drivers of revenues and costs? How well are they performing? Is their position in the marketplace improving or losing ground? This is not easy, as higher-ed institutions do not present their data in ways that lend it to outside analysis.

In pursuit of a keener understanding, I have been dabbling in a State Council of Higher Education for Virginia (SCHEV) database that tracks the number of applications, admissions, and enrollments for Virginia’s public universities.

These are critical metrics for assessing an institution’s health.┬áIt is a positive sign when the number of students applying for admission increases, a bad sign when applications drop. It is a sign of exclusivity — the ability to pick and choose students — when an institution accepts a low percentage of applicants and rejects a high percentage. Conversely, it is a sign of desperation when an institution accepts all comers. Finally, it is useful to track how students who, once admitted, decide to enroll and how many choose to attend a different institution.

The chart above shows admission data for Virginia’s flagship institution, the University of Virginia. As can be readily seen, the number of applications has surged — up 105% over the eleven years between the 2005-06 school year (when SCHEV data begins) and the 2016-17 year. Part of that increase reflects the fact that students are applying to more colleges than in the past. But in UVa’s case, the deluge in applications also reflect an increasing interest in the school. For all the controversies UVa has endured in recent years, it outperformed other public colleges by a wide margin. The average increase in applications for Virginia’s other fourteen public four-year institutions was 29%.

With skyrocketing applications, UVa could afford to be selective. In a sign of increasing selectivity, the university’s acceptance rate declined from 37.7% to 30.4%. That performance was all the more impressive compared to other Virginia institutions. Every other four-year college and university became less selective over the same 11-year period, some more so than others, as can be seen in the charts below. (A downward sloping lines indicates increasing selectivity.)

Speaking generally, Virginia’s most selective institutions tended to hold their own over the decade when measured by this indicator, while the least selective institutions lost ground, as seen by the upward sloping lines.

That brings us to a third metric, the “yield rate,” or the percentage of students granted admission who decide to enroll. Generally speaking, a higher yield rate indicates that an institution is in greater demand. A lower yield rate suggests that more students are saying, thanks, but no thanks.

As seen in the charts below, yields declined almost universally through the eleven-year period — VMI was the sole institution to buck the downward trend. (I deleted Norfolk State from this series because it was an outlier that rendered meaningless results.) The negative yield-rate trend likely reflects an increasing proclivity of students to apply to more colleges and nail down more acceptances in order to increase their choices, so declining percentages are not necessarily a reason for alarm. That said, the decline was downright precipitous for some institutions. Particularly alarming: Only one in five students accepted to the University of Mary Washington and Virginia State University wound up enrolling.

Admission, acceptance and yield trend-lines are especially worth watching for institutions that have increased tuition aggressively. There is widespread evidence that families are showing increased resistance to the high cost of attendance, particularly among institutions that lack a prestigious reputation. Some institutions have priced themselves out of the market.

For example, Mary Washington University could be running into price resistance.

Mary Wash’s yield rate is low — slightly fewer than 20% of accepted students choose to enroll. Even though applications have increased in recent years, the university has had to accept a higher percentage of applicants in order to maintain its enrollment goal. That means Mary Wash has been dipping deeper into the applicant pool and showing less selectivity. As long as it can increase the number of applications — through more aggressive marketing, perhaps — the Fredericksburg university can maintain its enrollment numbers. But the trends are worrisome.

The SCHEV data allows us to drill a little deeper, viewing the trend lines for both in-state and out-of-state students. Applications and enrollment have held up for in-state students, but enrollment has stumbled badly for out-of-state. That’s critical because out-of-staters pay a $14,600 tuition premium to attend (not including adjustments for financial aid). Out-of-state enrollment, which stood at 323 in 2005-06, fell by two-thirds to 102 in 2016-17. While Mary Wash accepted 86.7% of out-of-state applicants, a mere 9.9% of those accepted chose to enroll — down from 25% eleven years before. Given the out-of-state tuition premium, the out-of-state enrollment decline represents a loss of $3.2 million in tuition revenue.

That revelation sent me running to the most recent Mary Wash annual report: In fiscal 2015, the university lost $39.5 million in its net position (equivalent to net equity), and in 2016 saw a rebound of only $4.1 million. With $168.6 million in noncurrent liabilities (long-term debt) and $358 million in assets, the school is, in business parlance, fairly highly leveraged. Hopefully, more recent enrollment and financial trends have been more positive. But if I served on the Board of Visitors, I’d be asking a lot of questions.

University board members are unlikely to ever see this data from their college and university presidents. They would be well advised to acquaint themselves with it on their own initiative.

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11 responses to “Plumbing the Mysteries of College Application Data

  1. As always, any post about Virginia higher education should not include U.Va. and William & Mary. Both of them operate differently from all other public institutions in Virginia. They are the only selective institutions in the Commonwealth when it comes to admissions.

    • I could not disagree more. They are state-supported schools, built over decades with taxpayer funds and with the taxpayers owning their key facilities and much of their land.

      • I’m just pointing out that when you talk about admissions in higher education, it is ridiculous to compare 2 schools with selective to highly selective admissions with all the other schools in Virginia. The models employed by both schools is very different that the other schools when it comes to admits and yield.

  2. Interpreting these statistics is very tricky business, particularly as regards the selective first tier colleges and universities that have a strong incentive to manipulate the process in accordance with the demands and formulas of the private corporate ratings organizations such as US News & World Report.

    One consequence of this is the likelihood that these statistics tell us little about the quality of the education offered at a particular institution, or the “long term quality” of the students in the classroom. In these areas, there well might be an inverse relationship between the statistics and the educational quality of the institution, and the education received by the graduate.

    As to the less selective schools, namely the schools where all applicants are accepted, the statistics likely have significantly more relevance to what is happening in the reality on the ground.

    So I agree with Jim on his worry about Mary Washington College’s future, although even here this is not necessary an indicator of a problem with the quality of education a student receives there. Indeed, there may be an inverse relationship between those factors, as the statistics might speak only to a financial health in trouble as the institution tries to teach the old fashioned way, that is to truly teach its student, and demand student performance. This can adversely affect its bottom line financially, where the institution has the misfortune to be operating in a corrupt system.

    There is much more to explore here.

  3. In fairness, many HS grads these days are sending out more applications than their peers in years past. The on-line process makes that easier than when the applications all went out in big envelopes. I suspect that is a national trend that would force the “yield” rate down at most schools. And I suspect in Virginia the selectivity of the most prominent schools (UVA, W&M) increases the pressure to cover your bets. I also suspect, despite your doubts, that these data are tracked very closely by the leadership. Are there signs of stress? Yes. Is a big shakeout coming unless we find a way to stop the rampant cost increases? Yes.

    • Very fair and accurate comment. This is not their father’s application process.

    • Tracked by leadership? Yes.

      Shared with boards of visitors? Perhaps, but I’ve seen no sign of it.

    • Bingo. I applied to four colleges and found the process to be a royal pain in the ass. Using a typewriter with pre-printed forms was miserable.

      My kids applied to at least 10 colleges each and it was a breeze. Log on, use the “standard” core information registry to pre-populate the basic information. Bang out (or cut and paste) a few short essays and press “enter”.

      If you’re going to count applications I think you can’t really measure anything before 2010 or so. That’s when (to the best of my recollection) the process really got easy.

  4. The online Common Application, particularly combined with rankings like USNews, has had a big vicious-cycle-type impact. It is much easier to apply to more schools. This drives down the admission rate of selective universities, which in turn makes them more prestigious through the USNews criteria. Among Virginia publics, only UVA and W&M really play in this category. Note that other schools have really used this to their advantage much more than either of these schools. The University of Chicago had an admission rate higher than UVA and W&M not all that long ago (about 50%) and it is now far lower at about 8%. Vanderbilt had lower SAT scores than UVA and W&M and now has an average about 130 points higher than either.

    Out of state applications are what lowers UVA and W&M overall admit rates. In-state, both actually admit closer to 45% of applicants. These can be high-quality applicants, but significantly higher than the overall rates shown in the graphic above.

    What I see with some of the other schools in Virginia is that there may be too much capacity at current price with job market and demographic trends. Instead of looking at admission and yield rates, though, I think it would be better to look at this from SAT score trends (and perhaps GPA, but grade inflation and reporting might distort this). Both of these are available on SCHEV. I recall something on this blog that indicated VCU is “digging deeper.” I think this would be a better indicator than yield.

    The last point is about debt levels. I imagine a lot of this is tied to trying to have good facilities (gyms, business building, student and dining centers) to attract applicants, low interest rates for state backed debt, and trying to keep up with other universities in research funding in STEM.

  5. The last of the Baby Boomers was born in 1965. It seems to me that the last of their babies (Echo Boomers, as I recall) will have already made their applications to college. Isn’t there an inevitable shakeout coming just due to demographics? Immigration may prop up the number of 18 year olds but are young people who speak English as a second language as likely to apply to college (and get in) as those who spoke and learned in English their whole lives?

    I think higher ed in America is in for a rough decade.

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