PASSHE Institutions Merging

[Ship69]

The thing that always undermines that is the lack of any selectivity of the incoming class. I've made all the arguments to families. You can show good facilities, you can give examples of wildly successful students, you can show the honors programs, and on. But when they see students they know with horrible SATs and remedial HS classes getting accepted, the better students just don't want to be associated with them. If you take AP calculus, you are skeptical of a program that admits the kid taking Geometry their senior year.

It is frustrating. Young people don't realize that your education is largely what you make of it, and whether the guy sitting next to you wants to do much doesn't really matter. I went to school years ago when there was a lot less separation of kids into academic groups, and the bright kids always found a way to shine. And they actually pulled up the less motivated kids to an extent because most people don't want to look like a dummy.

Hard work can overcome a lot of things. One of my grandsons was not a college prep student in high school and wasn't encouraged all that much (the average kids, more than the AP or special ed kids, are the ones who often fall through the cracks). But out of high school he got two assembly line jobs where he got laid off (last hired, first gone). He got tired of that and enrolled in the Penn State Harrisburg engineering program. The math wasn't easy for him (he'd had no advanced math in HS), but he soldiered his way through it, and he always showed some mechanical aptitude, even as a kid. He not only got the engineering degree, but recently got his MBA from Ship. Today, he has an engineering job in the Volvo Mack Trucks plant and gets good performance reviews.

So sometimes the kid taking geometry his senior year is doing that because he never was really encouraged to do much else. You're right, though, in that this is a hard thing to get across to students.

[ironmaniup]

I'm with you. Most households are low information consumers of a college education. They only know what they know - and most of it is just taking what they're told at face value. This is why blue collar people flock to the desperate privates who advertise those "free tuition" programs without the fine print. Its also why the Pitt and Penn State branches (diploma outlet stores) still have students. There are so many options that most don't understand why Westminster is charging $40,000 and IUP is charging $15,000, why St. Vincent is offering $20,000 in grants but IUP is only offering $1,500, and what the true lowest cost is.

Privates used to sell more personal staffing, smaller spaces, and amenities. They don't have the lock on that claim anymore. In other words, you no longer need to pay more for a Buick or Cadillac to get leather seats and the 12 speaker stereo.

My metaphor is always Aldi. For years, Aldi was known as a lower income community grocery store. Then Aldi started moving into the suburbs people started realizing that Aldi sells a lot of the same for less without the brand names & bags you want to reuse so people know you shop there. PASSHE is Aldi: largely the same education at a fraction of the name brands. If PASSHE can figure out how to market that, they're golden. At the least, they should test it with the failing Penn West model. They can't get students in the door, so sell out on cost savings. They have more to sell because they can show how they're mostly online to save money.

The thing that always undermines that is the lack of any selectivity of the incoming class. I've made all the arguments to families. You can show good facilities, you can give examples of wildly successful students, you can show the honors programs, and on. But when they see students they know with horrible SATs and remedial HS classes getting accepted, the better students just don't want to be associated with them. If you take AP calculus, you are skeptical of a program that admits the kid taking Geometry their senior year.

[IUPbigINDIANS]

Well...one problem our schools can't fight is the allure of suburban kids wanting to go to southern schools. It's a thing around here...they see the games on TV...hear about the cocktail parties in the parking lots and getting into the frats and sororities. They aren't paying that much either...and kids in my area are going to Alabamastan, Auburn, Tennesseeastan, Clemson...etc. The University of Tampa...a D2 school...is now one of the IT schools (well..maybe not after these storms) kids from up here are heading to....

Those schools are hot. There was actually just an article about it in (if I recall) USA Today.

I've been to many of the 'big' name schools in the South. It's just different. I can definitely understand the allure.

[IUPNation]

I'm with you. Most households are low information consumers of a college education. They only know what they know - and most of it is just taking what they're told at face value. This is why blue collar people flock to the desperate privates who advertise those "free tuition" programs without the fine print. Its also why the Pitt and Penn State branches (diploma outlet stores) still have students. There are so many options that most don't understand why Westminster is charging $40,000 and IUP is charging $15,000, why St. Vincent is offering $20,000 in grants but IUP is only offering $1,500, and what the true lowest cost is.

Privates used to sell more personal staffing, smaller spaces, and amenities. They don't have the lock on that claim anymore. In other words, you no longer need to pay more for a Buick or Cadillac to get leather seats and the 12 speaker stereo.

My metaphor is always Aldi. For years, Aldi was known as a lower income community grocery store. Then Aldi started moving into the suburbs people started realizing that Aldi sells a lot of the same for less without the brand names & bags you want to reuse so people know you shop there. PASSHE is Aldi: largely the same education at a fraction of the name brands. If PASSHE can figure out how to market that, they're golden. At the least, they should test it with the failing Penn West model. They can't get students in the door, so sell out on cost savings. They have more to sell because they can show how they're mostly online to save money.

Well...one problem our schools can't fight is the allure of suburban kids wanting to go to southern schools. It's a thing around here...they see the games on TV...hear about the cocktail parties in the parking lots and getting into the frats and sororities. They aren't paying that much either...and kids in my area are going to Alabamastan, Auburn, Tennesseeastan, Clemson...etc. The University of Tampa...a D2 school...is now one of the IT schools (well..maybe not after these storms) kids from up here are heading to....

[Fightingscot82]

I don't get that ... people already assume lowest quality. I hate to say it being an alumni and all, but, it is what it is. That's the public perception.

So, why not sell it as the lowest cost? There's ways to do it without sounding like it's a blue-light special.

I'm with you. Most households are low information consumers of a college education. They only know what they know - and most of it is just taking what they're told at face value. This is why blue collar people flock to the desperate privates who advertise those "free tuition" programs without the fine print. Its also why the Pitt and Penn State branches (diploma outlet stores) still have students. There are so many options that most don't understand why Westminster is charging $40,000 and IUP is charging $15,000, why St. Vincent is offering $20,000 in grants but IUP is only offering $1,500, and what the true lowest cost is.

Privates used to sell more personal staffing, smaller spaces, and amenities. They don't have the lock on that claim anymore. In other words, you no longer need to pay more for a Buick or Cadillac to get leather seats and the 12 speaker stereo.

My metaphor is always Aldi. For years, Aldi was known as a lower income community grocery store. Then Aldi started moving into the suburbs people started realizing that Aldi sells a lot of the same for less without the brand names & bags you want to reuse so people know you shop there. PASSHE is Aldi: largely the same education at a fraction of the name brands. If PASSHE can figure out how to market that, they're golden. At the least, they should test it with the failing Penn West model. They can't get students in the door, so sell out on cost savings. They have more to sell because they can show how they're mostly online to save money.

[IUPbigINDIANS]

I've been told a million times that they're afraid to sell "lowest cost" because they don't want people to assume lowest quality. But the #1 grievance with a college education is the cost, so...

I don't get that ... people already assume lowest quality. I hate to say it being an alumni and all, but, it is what it is. That's the public perception.

So, why not sell it as the lowest cost? There's ways to do it without sounding like it's a blue-light special.

[Fightingscot82]

I agree that the state schools need to be touting their value a lot more than they do. While I'm a big fan of our current leadership at Shippensburg, I think we could do more in this area. A business or engineering degree from Ship is looking like a good value these days considering the current average cost of college.

I've been told a million times that they're afraid to sell "lowest cost" because they don't want people to assume lowest quality. But the #1 grievance with a college education is the cost, so...

[iupgroundhog]

F&M's total tuition and fees is over $70,000. That's living on campus with a meal plan. BUT...the average student pays about $34,000. That's a huge discount rate and unsustainable. The $70k scares away the poors but the huge "scholarship" tempts a lot of the middle class because little Jane was offered a huge scholarship and a lot of time its presented as a "$136,000 scholarship" covering four years. I only know one person who went to F&M and she's from a well off well known family in Lititz. Her parents paid a lot of money for her MRS degree.

PASSHE has frozen tuition for the past six years by successfully lobbying for additional funding. Its another thing they could be advertising with but they don't. Individual schools have had to raise fees along the way but that base tuition is the same as 2018. This is also before considering that most of the PASSHE schools have reduced tuition for many out of state students. The cost gap is widening and needs to be exploited now that the base population is about to nosedive.

I'm speculating but I think this has to do with 2 factors; 1) the decrease in student-aged population, and 2) losing ground within their competitive set. Nobody can control the decrease in students. However, F&M, which is a great school and I would consider a near-Ivy even though they are not labeled as such, might be losing students to Ivy league schools who in the past opted to go to smaller, highly competitive school, and they might be losing ground to other small, liberal arts-type schools e.g. Swarthmore/Haverford, etc. Although it's located in a small city, location might be an issue when compared to schools in or near major cities. Also, and I think this is true, F&M has not recruited the global market to the extent that their competitors have. That's critical for these selective private schools.

[Ship69]

F&M's total tuition and fees is over $70,000. That's living on campus with a meal plan. BUT...the average student pays about $34,000. That's a huge discount rate and unsustainable. The $70k scares away the poors but the huge "scholarship" tempts a lot of the middle class because little Jane was offered a huge scholarship and a lot of time its presented as a "$136,000 scholarship" covering four years. I only know one person who went to F&M and she's from a well off well known family in Lititz. Her parents paid a lot of money for her MRS degree.

PASSHE has frozen tuition for the past six years by successfully lobbying for additional funding. Its another thing they could be advertising with but they don't. Individual schools have had to raise fees along the way but that base tuition is the same as 2018. This is also before considering that most of the PASSHE schools have reduced tuition for many out of state students. The cost gap is widening and needs to be exploited now that the base population is about to nosedive.

I agree that the state schools need to be touting their value a lot more than they do. While I'm a big fan of our current leadership at Shippensburg, I think we could do more in this area. A business or engineering degree from Ship is looking like a good value these days considering the current average cost of college.

[Ship69]

If they have to give that much aid...then obviously have a cost structure problem. No school is worth this much in tuition.

Estimated costs for a year at F&M are $70,000. These schools are offering massive aid to try to compete with PASSHE schools. How long they can sustain it without seriously compromising their schools is another question. Some of these small privates have surprisingly large endowments. I think Dickinson's is more than $600 million, about 10 times what we have at Ship.

[Fightingscot82]

Franklin & Marshall College in Lancaster County is making cuts as well. They had an $8 million budget deficit which has been partially caused by increased financial aid. Apparently, they're giving something like $50,000 per student in aid per year. If PASSHE can continue to stay relatively stable on tuition, it's going to put a lot of pressure on the privates.

F&M's total tuition and fees is over $70,000. That's living on campus with a meal plan. BUT...the average student pays about $34,000. That's a huge discount rate and unsustainable. The $70k scares away the poors but the huge "scholarship" tempts a lot of the middle class because little Jane was offered a huge scholarship and a lot of time its presented as a "$136,000 scholarship" covering four years. I only know one person who went to F&M and she's from a well off well known family in Lititz. Her parents paid a lot of money for her MRS degree.

PASSHE has frozen tuition for the past six years by successfully lobbying for additional funding. Its another thing they could be advertising with but they don't. Individual schools have had to raise fees along the way but that base tuition is the same as 2018. This is also before considering that most of the PASSHE schools have reduced tuition for many out of state students. The cost gap is widening and needs to be exploited now that the base population is about to nosedive.

[Fightingscot82]

Drexel should be a fascinating case study for someone who works in higher education. Virtually no school has put itself on a growth path like Drexel has. The influx of money is virtually unmatched over the last 15 years or so. From 2011 to the end of 2017 I worked at 3000 Market St. which is basically on the Drexel campus. Every year there was a new high rise building being built to serve as our new neighbor. But sometimes the bigger they are, the harder they fall.

Drexel grew so fast academically and with respect to facilities and big new programs that it is not surprising that they have to make adjustments in the current environment. But these are short term reductions/corrections. Long term, note that he mentions 2 times monetizing their real estate portfolio. That means selling some of these new buildings, in my estimation. This real estate is prime stuff for the corporate world in Philadelphia. Drexel will be ok.

Drexel is tied in with the corporate environment and the city of Philadelphia as much as any institution is. Their development philosophy is based on big time corporate partnerships. They might need to do some belt tightening but it has a lot going for itself.

Drexel will be fine. They've got $2.5 BILLION in assets.

[IUPNation]

Franklin & Marshall College in Lancaster County is making cuts as well. They had an $8 million budget deficit which has been partially caused by increased financial aid. Apparently, they're giving something like $50,000 per student in aid per year. If PASSHE can continue to stay relatively stable on tuition, it's going to put a lot of pressure on the privates.

If they have to give that much aid...then obviously have a cost structure problem. No school is worth this much in tuition.

[IUPNation]

Drexel should be a fascinating case study for someone who works in higher education. Virtually no school has put itself on a growth path like Drexel has. The influx of money is virtually unmatched over the last 15 years or so. From 2011 to the end of 2017 I worked at 3000 Market St. which is basically on the Drexel campus. Every year there was a new high rise building being built to serve as our new neighbor. But sometimes the bigger they are, the harder they fall.

Drexel grew so fast academically and with respect to facilities and big new programs that it is not surprising that they have to make adjustments in the current environment. But these are short term reductions/corrections. Long term, note that he mentions 2 times monetizing their real estate portfolio. That means selling some of these new buildings, in my estimation. This real estate is prime stuff for the corporate world in Philadelphia. Drexel will be ok.

Drexel is tied in with the corporate environment and the city of Philadelphia as much as any institution is. Their development philosophy is based on big time corporate partnerships. They might need to do some belt tightening but it has a lot going for itself.

How many schools sit next to one of the busiest transportation hubs along the Northeast that students can walk from their campus housing right on to a train and head home up and down the eastern seaboard? Hell...they can do that and get on a SEPTA train to the airport and fly home.

It really is in a prime location.

[IUPNation]

Drexel has been catering to wealthier students for some time. They give suburban kids that Instagram ready city life and parents are happy they're attending a school that uses co-op's to stay job focused. Its not a school that rural & middle class families are willing to borrow their way to experience. Drexel is a good school, but this must mean their margin is pretty slim.

If PASSHE can ever effectively sell on value & price, they'll bring a lot of private school to their knees.

Their Co-op program is pretty nice...I would have loved that.

IUP had internships but I could never do one because I had my walking orders that only 4 years of schools was being paid for and I HAD to be done by May 1988. So..I had to stay in class rooms year round to get that done.