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LEHIGH UNIVERSITY’s Case Study

Lehigh University: Analyzing Enrollment Options

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Lehigh University: Analyzing Enrollment Options

  • The Lehigh University leadership wanted to freeze enrollment for 5 years, in order to bring admission rates and yield back to historical levels, after their COVID-19 response had skewed them.
  • Realizing the financial impact would be too great, a finance team presented 9 scenarios with alternative enrollment pause durations.
  • Based on this data, Lehigh’s leadership decided to freeze enrollment for 3 years (rather than 5) and place the construction of a new residence hall on hold. The pause on enrollment would be lifted once Lehigh was able to significantly increase application rate and reduce acceptance rate into the low 30%, and increase yield.

Addressing changes to university enrollment policy at Lehigh

In 2021, Joseph Helble joined Lehigh’s leadership team as the university’s new president. This shift in leadership opened the door for Lehigh to reevaluate their identity. Part of their reevaluation included becoming more selective in their admissions process to elevate their prestige. To achieve this, leadership contemplated a decision to temporarily freeze Lehigh’s enrollment for five years.

However, Jim Quinn, Director of Financial Planning, and Warren Loller, Budget Director, of Lehigh University quickly realized that an admission freeze for half a decade could present financial strains for the university. Rather than scrap the idea entirely, they broke down the intended plan into nine alternative scenarios—the leadership team’s base plan and eight different enrollment pauses (four with standard capital and four with P3). Their goal was to develop a solution that met the university’s needs without breaking its financial models. In doing this type of modeling, Jim states, “the analysis uncovered that we don’t have an expense problem, we have a revenue problem. That enabled us to focus our attention on where it would matter most.”

Modeling Lehigh’s long-term plans

Their planning went beyond the immediate enrollment freeze—rather, they strategized the entire upcoming decade. In doing so, they focused on where the university’s budget was most flexible or amenable, and where it wasn’t. This allowed them to maintain desired sustainability levels without
overspending or cutting corners.

Taking it a step further, Jim and Warren also explored P3 comparisons as an alternative to the various scenarios they were contemplating, giving them additional insight into the potential future outcomes of the options available to them.

Ultimately, Jim and Warren presented tangible reporting models through Synario. This allowed for a deep dive into how the changes and the enrollment pause would impact long-term financial plans. In order to maintain the most accurate projections, only the capital initiatives pertinent to this analysis were included in the projections; all other investment opportunities were excluded.

Based on trend analysis, they discovered that modest growth over the decade following an enrollment pause (and the eventual trickle effects afterwards) was the best possible option. The pair settled on a plan with leadership that would maintain the university’s financial stability and credit while achieving the desired effects. This involved freezing enrollment for three (rather than five) years, and halting the construction of a new residence hall until the three years had passed. During this time, Lehigh would seek to significantly increase their application rate while reducing acceptance rate (goal: low 30%).

Before and after utilizing Synario

Before: The leadership team’s plan may have had a negative impact on the university’s finances and negated any potential positive impacts the enrollment hold offered. Without alternative scenarios that properly modeled the difference across pause durations and the long-term impacts, there was no way of properly showing whether or not the pause would actually benefit the university in the long run.

After: Through the help of Jim and Warren and Synario’s projections, Lehigh leadership was not only able to improve Lehigh’s reporting and data analysis, but they were also able to realize a plan that suited the university’s financial needs and would facilitate later growth. According to the models presented, the admissions freeze would have lasting effects beyond the short term. Their plan to address this would lead to increased tuition rates and a growth in revenue for Lehigh that would offset losses due to the pause, in an environment of declining college age students.

“The analysis uncovered that we don’t have an expense problem, we have a revenue problem. That enabled us to focus our attention on where it would matter most.”

– Jim Quinn, Director of Financial Planning, Lehigh University

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