University Business - September 2011 - (Page 29)

MONEY M AT T E R S Net Revenue and Financial Aid Implications of Going Global Considerations beyond curriculum for international experiences at home and away By Kathy Kurz I NCREASINGLY, COLLEGE AND university leaders are recognizing that no undergraduate education is complete without exposure to cultures outside the United States. erefore, many institutions are striving to create a more global experience for their students, through enrolling more international students, encouraging students to study or work abroad, setting up satellite campuses in other countries, or some combination of all three. According to Institute of International Education (IIE) research, colleges and universities report that more than 18,700 students did for-credit internships or worked abroad in 2008-2009, (the most recent year for which data are available), an increase of more than 5,000 over the previous year. However, the impact on net revenue (charges minus financial aid) is sometimes forgotten as plans for globalizing the curriculum are under discussion. For tuition-dependent institutions, particularly those that are under capacity already, this can be a serious omission. The reality is that increasing international representation often means attracting students with nancial need. resulting revenues to support studyabroad scholarships and faculty grants. Because of the competition for fullpay international students, however, the reality is that significantly increasing international representation at many institutions means attracting students who need assistance. Internationals who require financial aid are not eligible for federal or state funds, so any aid that is provided will need to come from institutional resources. Furthermore, it is very difficult to accurately assess the need of international students. Most institutions simply use the family’s statement of what they can provide as the expected family contribution, rather than attempting to calculate an EFC. As a result, needy international students often are discounted at a much higher level than needy U.S. citizens. For example, Macalester College (Minn.) is listed by the IIE as one of the top U.S. institutions in terms of international student enrollment. For freshmen entering in fall 2010, however, the average institutional grant for enrolling international students was more than $9,000 higher than for U.S. citizens. As Brian Lindeman, director of financial aid at Macalester, says, “We believe that enrolling students from around the globe is a vital part of our mission. We strive to enroll a significant number of international students from a significant number of countries. e distribution of the financial aid budget is a reflection of Macalester’s values.” CONSIDERING NET REVENUE Similarly, encouraging more students to study abroad can have unintended consequences for net revenue. Most institutions that fully embrace the idea of encouraging students to study abroad will allow students to take their financial aid with them both on institution-sponsored programs and, through consortium agreements, on other affiliated programs. Under consortium arrangements, institutions typically keep only a small processing fee, and the rest of the tuition charged goes to the institution sponsoring the program. is means that institutional financial aid is being used to pay for tuition that will never show up as revenue on the home institution’s books. In addition, even if the program is sponsored by the home institution, more Kathy Kurz is vice president of the enrollment management consulting firm Scannell & Kurz, Inc. She can be reached via the firm’s website, September 2011 | 29 MEETING NEED Let’s start by examining the implications of enrolling more international students. Certainly there are some pockets of fullpay international students, and many institutions are beginning to target them in an effort to increase enrollments and net tuition revenue. e State University of New York, for example, issued a press release in June announcing their plans to use agency recruiters to add 14,000 international students by 2016. If they meet their goals, they anticipate using the

Table of Contents for the Digital Edition of University Business - September 2011

University Business - September 2011
Editor's Note
College Index
Ad Index
Behind the News
Financial Aid
Money Matters
Internet Technology
Shared Governance
Acknowledging Achievement
Looking Back
Spotlight on Procurement
EduComm 2011
End Note

University Business - September 2011