Top Schools Get Yield in Slump

Posted on June 3, 2009. Filed under: college admissions, College Advice, college applications, college counseling, college financial planning, college search, education |

Colleges are very concerned about their yield rates. This basically means that universities want a high percentage of the students they accept to attend – this is what raises their yield percentage.  Colleges want high yields, which makes them more selective and prestigious. With the recent economic downturn, colleges across the nation were especially concerned that their yield rates would go down. This past season it was particularly difficult to estimate yield as affordability was a huge factor and some students needed to stay in state to fund their education.  Somewhat surprisingly, this article demonstrates the determination of families to provide an outstanding education for their children regardless of financial difficulties. The yields of selective colleges remain high with some rates even going higher than previous years.

June 3 (Bloomberg) — Jill and George Edwards say they’ll eat into savings intended for retirement to send their son Mark to Johns Hopkins University, and they won’t cut costs by sending him to a top school in their home state.

Mark, 17, a high school senior in a Los Angeles suburb, chose to study neuroscience at Hopkins, a private college in Baltimore. He rejected the University of California at Los Angeles, the No. 3 public college in U.S. News & World Report rankings. Hopkins’s price of $53,890 for the next school year is more than twice that for in-state students at UCLA.

“This puts us in danger of getting to a ripe, old age and not having any money,” 50-year-old Jill Edwards said.

The worst recession in at least 50 years isn’t deterring families from paying twice or three times as much for college as they might. Rice University in Houston, Amherst College in Amherst, Massachusetts, and Williams College in Williamstown, Massachusetts — all costing $43,000 to more than $50,000 annually — are enrolling a higher percentage of accepted students than last year, the schools’ deans of admission said in interviews.

Parents are digging deeper to pay for colleges they deem best for their children’s future careers, said Chris Munoz, vice president for enrollment at Rice. Enrollment is a sign that consumers are recovering from recession shock as President Barack Obama wins support for his economic policies, said Richard T. Curtin, director of the monthly Reuters/University of Michigan Index of Consumer Sentiment.

“Our data suggest that consumers have increased their level of confidence because they are more optimistic about the future, not about their current situation,” Curtin said in an interview. “And that’s heavily tied to the expectation that President Obama’s stimulus package will be successful.”

Analyzing Yields

Now that the May deadline for deposits has passed, more than 2,600 private and public four-year colleges are tabulating and analyzing the yield, the proportion of students offered admission who decide to enroll, said David Hawkins, director of public policy and research for the National Association for College Admission Counseling, in Arlington, Virginia.

Yield is important to colleges because each sets a target enrollment needed for solvency, Hawkins said. Also, students may perceive yield as a measure of a school’s desirability, he said.

Johns Hopkins is the biggest recipient of federal funds for science, medicine and engineering, according to the school. For the Edwardses, the individual attention and research opportunities at Hopkins make it worth the financial sacrifice, even after the family’s assets declined at least 15 percent, Jill Edwards said.

Magnolia Trees

The family won’t tap tax-deferred retirement accounts, she said. Jill, who visited Hopkins with Mark in April as magnolia trees began to blossom there, worked in employee benefits for 14 years and is no longer employed. Her husband, George, 60, is an environmental scientist for California’s Orange County.

“It is definitely a surprise that as many students are accepting our offers in light of the economy,” Munoz said. Rice’s yield climbed to 36.7 percent, from 35 percent a year earlier, he said.

The Index of Consumer Sentiment increased to 68.7 in May from 65.1 in April and 59.8 in May 2008. The number peaked at 96.9 in January 2007.

Confident or not, parents and students began visiting schools 18 months ago, before the economy soured, said Philip Smith, the former dean of admission at Williams.

‘Heart Set’

“Kids get their heart set on a school,” said Smith, who in retirement still reads applications. “The mind-set came earlier than the downturn. That may explain something about this year.”

At Amherst, the yield increased to 39 percent, from 37 percent last year, said Tom Parker, dean of admission and financial aid. Williams’s yield rose to 45 percent from 42 percent, said Richard Nesbitt, director of admission.

Not all schools were up. The University of Chicago’s yield fell to 37.2 percent from 37.7 percent, said Ted O’Neill, dean of college admissions.

“My guess is that the economy hurt us a little,” he said.

At Hopkins, the yield increased to 32 percent, from 30 percent a year earlier, saidJohn Latting, dean of undergraduate admissions. The target for the class was 1,275, and the school received 1,400 deposits, said Bill Conley, dean of enrollment and academic services.

Alumni of Hopkins include Michael Bloomberg, New York City’s mayor and the principal owner of Bloomberg News parent Bloomberg LP.

Double Major

Eddie Brooks, an 18-year-old from Bucks County, Pennsylvania, who plans to major in physics and engineering mechanics, picked Hopkins over three less-expensive choices.

A year at the University of Pittsburgh would have cut the outlay to about $5,000 annually after a scholarship. Brooks also turned down an offer from Case Western Reserve University in Cleveland, which would cost the family about $25,000 a year, and one from Rensselaer Polytechnic Institute in Troy, New York, where the annual expense would be $35,000.

Brooks’s parents sent a $600 deposit to Hopkins, although the family’s assets have shrunk about 40 percent, said his mother, Denise Brooks, 46, the researcher director for a market- information company.

“We’re going to go into debt,” she said. “We can do it and are willing to do it.”

Laurie and Richard Sabra of Hollywood, Florida, were unable to make the same choice for their son Joey. They didn’t qualify for need-based financial aid and weren’t able to borrow more against their house.

Joey, the second of three children, turned down an early- admission offer to Duke University in Durham, North Carolina. He’s enrolling in the honors program at the University of Florida in Gainesville.

‘Initially Sad’

A Florida Bright Futures scholarship and a National Merit award will cut the cost to about $12,000 a year, Richard Sabra said.

“I was initially sad,” said Joey, 18. “I found the University of Florida could present opportunities equally as good as I’d have at Duke.”

Duke’s price next year is $53,390, said Christoph Guttentag, dean of undergraduate admissions. Of 548 students offered early admission, only six aren’t enrolling, he said.

Some public colleges reported lower yields. While applications increased 9 percent to a record at Binghamton University, New York State’s highest-ranked public college on the U.S. News list, the yield fell to 24 percent, from 25 percent a year earlier, said Cheryl Brown, director of undergraduate admissions at the school in Binghamton, New York.

‘Higher Caliber’

“We admitted a higher-caliber group with better scores and higher achievement in high school,” Brown said in a telephone interview. “They were wooed, I suspect, by a number of other schools.”

Andrea Plate, 17, of Mamaroneck, New York, rejected the University at Buffalo, another campus of the State University of New York, where her parents were students. She accepted Loyola University Chicago, a Roman Catholic, Jesuit institution that will cost almost $22,000 the first year compared with $16,500 for Buffalo.

Andrea’s father, Rick Plate, vice president of a software company, said he plans to tap a home-equity credit line and other sources, although the household’s assets have declined about 30 percent.

“We wanted to give our kids a choice,” Andrea’s mother, Jackie, said. “Growing up, neither my husband nor I was given a choice.”

Parents don’t want to disappoint children who worked to win entrance to a school, said Debora L. Spar, president of Barnard College, an affiliate of Columbia University in New York.

‘Dream School’

“If a kid has the opportunity to go to his or her dream school, it’s hard to put a price tag on that,” she said.

Parents see education as an investment in children, said Anthony Marx, president of Amherst, which tied with Williams for the No. 1 ranking among liberal-arts schools tracked by U.S. News.

“It used to be the home was the most productive long-term investment you could make,” he said. “People are less sure about that now.”

By Janet Frankston Lorin


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