Academic

Why September drives your dean crazy

By Eric Chiappinelli

Last month I explained the melt (link), how it affects the demographics of the incoming class, and why it drives your dean crazy. But the dynamic of the melt that profs are least familiar with is likely to be the most challenging one for your dean. Money.

By early September, your dean will know the ?10-day numbers? in admissions argot, meaning the enrollment on the 10^th day of classes. By that time, there is unlikely to be any change in enrollment until January.

Once your dean has the 10-day numbers he or she will also know the final net tuition number. Knowing that number is critical to planning for the rest of the academic year. At private and at many, if not most, public institutions, a law school?s revenue is primarily tuition net of financial aid from recycled tuition dollars. Most private law schools get somewhere north of 90% of their total revenues from tuition.

But here?s why September drives your dean crazy. Different students have very different effects on the net tuition. Students with large scholarships have less effect on the school?s bottom line when they melt. The school loses gross tuition (i.e., the sticker price) but recovers lots of that in the financial aid dollars so the net tuition number may not be affected much. Students with small scholarships have a larger effect on net revenue when they melt.

For example, at a school with $35,000 tuition, a melting student who had a $25,000 scholarship reduces the school?s net tuition revenue by only $10,000. However, a melting student who had a $5,000 scholarship reduces the school?s net tuition revenue by $30,000.

So, just because the entering class is larger than expected, your school may not have a lot of extra money if the entering students were awarded lots of financial aid. Conversely, a smaller class may not mean the budget is too tight if the entering students didn?t get a lot of financial aid.

There?s no good way to predict what effect the melt will have on the law school?s finances until the 10-day numbers are in.

It all depends on which students melt and your dean has very little control over that. September drives your dean crazy.

Full post as published by The Faculty Lounge on September 16, 2009 (boomark / email).