Case Study: How Wofford College Modernized Tuition Strategy and Student Initiatives with Synario

Key Takeaways

The Challenge: Balancing Innovation with Fiscal Responsibility

The Solution: Synario Powers Data-Driven Tuition and Initiative Planning

Setting the Modeling Scope

In early 2018, Chris Gardner, previously Associate Vice President for Finance, now Chief Financial Officer, and other members of Wofford’s finance team were tasked by the institution’s president to develop, analyze, and present alternative tuition models coupled with strategic initiatives that focused on the student experience and financial sustainability.

After performing market research, Chris and his team came up with the following five different tuition models:

• Tuition Price Reset: Wofford adjusts its tuition rates for all students, both current and incoming.
• Inflation Plus: Rather than growing the college’s tuition rate by a set amount each year, the college would adjust tuition for inflation and include a small additional margin.
• Tuition Promise: In this model, Wofford would hold tuition pricing flat for all four years for each new cohort of students.
• Three-Year Degree: Students would graduate within six semesters and two summers with increased overall enrollment.
• Continuing Student Scholarships: Students receive an allotted amount of financial aid based on GPA thresholds. Do well and receive a reduced tuition price.

Wofford’s finance team also considered additional tuition models but decided not to pursue those options because they did not align with the institution's character, among other reasons. Those unpursued ideas included fixed price degrees, post-graduation guarantees, and charging per credit hour.

According to Gardner, the overarching goal of this exercise was to see how Wofford could pair these tuition changes with “enhancements to the student experience and academic experience.”

“We wanted to marry a set of tuition model changes to a set of programmatic initiatives that might really change the way we tell our story and the way we present ourselves to the outside world.” – Chris Gardner, Associate VP of Finance, Wofford College

Wofford also modeled the following marketable initiatives for financial sustainability and impact:

• Wofford “Complete”: A college-wide initiative to enhance the availability of financial counseling for students and increase transparency in college pricing.
• Interim Subsidy: Wofford would offer students a preset amount to subsidize an interim experience during a specific time within the school year.
• High-Impact Practice (HIP) Stipend: Wofford would offer a preset amount that high-performing students can spend on a wide variety of practices (e.g., study abroad, research opportunities, civic engagement, and more).
• Reduce Costs of Foreign Study: Wofford would make it more financially attractive and feasible for more students to study abroad.
• Graduation “Guarantee”: Wofford would offer a guarantee to students who meet academic expectations that they will graduate within four years (with a few stipulations).

To present their findings, the finance team created multiple slides as part of an interactive Synario slide deck. To start, they showed the president and his cabinet a familiar projection of Wofford’s current financial standing.

Each analysis displayed this “baseline” and showed the difference between the existing tuition model and the new tuition model.

New Tuition Models

TUITION RESET UP

First, a simple increase in the overall cost of tuition was shown against the existing tuition model baseline. The baseline represents Wofford’s excess revenue after expenses from the current comprehensive fee structure. The values in the graphs do not represent Wofford’s actual financial standing.

Gardner and his team set standard assumptions for enrollment, discount rate, and other influencing factors and showed the revenue projection over a five-year timeline.

If the president or one of the cabinet members wanted to see different tuition growth rates, Gardner and his team could update the presentation live to show the results on the full set of Wofford’s financials.

“As the conversation is evolving, somebody says, ‘I don’t like a 10% tuition increase. I don’t think the market can bear it. What if we try 7.5%?’ We can go live and see that would create a negative revenue situation for us.” – Chris Gardner, Associate VP of Finance, Wofford College

After the positive tuition growth rate was shown, the finance team showed a negative tuition growth rate for illustrative purposes. This view demonstrated to the president and cabinet members that this was not a financially viable option and would require extreme changes to other metrics.

Gardner continues, “The point of this slide for our group was to say, because we don’t have excess capacity on our campus, it is really hard to pay for a tuition reset down.”

Wofford could weather a tuition decrease in the long term; however, it would put the institution in a financially unstable position in the short term.

Wofford raised the tuition growth rate for fiscal year 2020 by 10% and then reduced the rate back to approximately 3.3% in the following years. The discount rate and enrollment assumptions remained at existing levels to focus on the impact of changing the comprehensive tuition fee.

The change in Wofford College’s bottom line between the old tuition model and the new tuition reset is shown in the bottom line graph.

INFLATION PLUS

While a large tuition increase results in a marked improvement in Wofford’s contributions to its operating reserves, a marginal increase does not have a similar effect. In this model, Gardner and his team showed that a minimal increase with only a slight margin over the economic inflation rate would significantly lower the contributions to operating reserves over time.

The slower growth rate of the Inflation Plus model compounds over time. The slow growth rate, coupled with Wofford’s rising expenses, means the two models diverge significantly in the 2025 and 2026 fiscal years.

Similar to a tuition decrease, this tuition scenario is not financially sustainable for Wofford without significant changes to contributing revenue factors such as tuition discount rate, enrollment, or inflation margin.

In this example, the inflation assumption is set to an average of just over 2% while the college’s margin on top of the inflation rate is just above 1%. Discount rate and enrollment levels are left the same as in the previous example. The result was a slightly lower bottom line in the short term, with increasing disparity in the long term.

TUITION PROMISE

Wofford analyzed the difference in revenue if they offered incoming students a tuition price that remained the same for all four years of their education. For Wofford’s finance team, this was the first scenario that required new logic rather than a simple percentage increase of an existing assumption.

Without the ability to alter tuition pricing while students were enrolled at Wofford, the college’s revenue would stagnate in the short term, dropping below the existing baseline tuition revenue projection. However, in the long term, the Tuition Promise model could exceed the baseline revenue as new cohorts of students enter the college and are charged a higher flat rate for all four years.

The president and his cabinet were able to see that this model, like the previous models, would require significant changes to contributing revenue factors to offset the short-term losses.

In the Tuition Promise model, the comprehensive tuition fees are set to an approximate 6% growth rate while the discount rate and enrollment remain the same. The graph depicts a severe decrease in the bottom line in the short term, with more promising returns in the long term.

THREE-YEAR DEGREE

Gardner and his team wanted to show the president and his cabinet a novel idea that could have a tremendous impact. Although this option would take the greatest amount of structural change for the small liberal arts school, it offered an interesting contrast to previous models.

The idea behind this model was that Wofford could effectively increase enrollment without impacting or altering the college’s physical capacity. Under this tuition model, Wofford could cycle more students through the academic pipeline while increasing enrollment rates accordingly.

Ultimately, the Three-Year Degree model was not pursued due to the extreme changes that would need to be made to the curriculum and degree formats. However, the model showed that this type of organizational change could result in significant revenue gains in the short term and only a slight decrease in revenue in the long term.

In the Three-Year Degree tuition model, the student participation rate assumption is set to 10%. Chris and his team believed that those who entered into the three-year program would all see it through, so the retention rate assumption is set to 100%. Summer aid and enrollment are the same as previous models.

Marketable Initiatives

Although the focus of the exercise was to examine new tuition models, the secondary purpose was to incorporate new initiatives that Wofford could use to differentiate itself from its higher education competition.

The goal of these initiatives was to enhance the student experience without significantly impacting the college’s bottom line. One contributing factor to the financial feasibility of these initiatives was timing, especially if the initiatives were launched when tuition revenue was in flux.

Synario allowed the finance team, president, and cabinet to explore the effects of different launch dates for each initiative.

Continuing Student Scholarships

One way Wofford considered differentiating itself from competitors was to offer each student a $1,000 scholarship if their GPA is at or above 3.00. This initiative provides Wofford’s marketing team with a unique way to draw in student interest and give high-performing students a discount on tuition fees.

Offering more student aid, however, directly impacts the college’s contributions to operating reserves. Through Synario, Wofford’s finance and executive teams were able to alter the initiative to look at the bottom-line impact if the GPA threshold was increased to 3.25 and 3.50.

It was quickly determined that Wofford would need to implement a tuition model that significantly increased its contributions if the college planned on offering the scholarship at the 3.00 GPA threshold.

In this initiative model, the student scholarship is consistently set at $1,000, and the discount rate is just over 30%. Each graph shows the difference against the bottom line if Wofford offered the scholarship to students with GPAs ranging from 3.00 to 3.50.

Graduation Guarantee

As an alternative to the student scholarship initiative, the guaranteed graduation initiative was a programmatic strategy to ensure more students graduate within four years. Wofford considered putting measures in place that would effectively “guarantee” a four-year graduation rate if students met certain criteria.

The impact on the contributions to operating reserves was minimal, as the initiative was less monetary and more procedural. When presenting this initiative to the president and his cabinet, the finance team described it as an easy win for the college, requiring relatively minimal changes but improving the student experience.

Increase Foreign Study

Wofford, among other higher education institutions, understands that student interest in study abroad programs is growing. To differentiate itself from its competitors, Wofford wanted to make it more financially attractive to participate in study abroad programs. This initiative had two major implications for the college’s contributions to its operating reserves.

Through Synario, Wofford projected the drop in overall enrollment as well as the financial impact of increased financial aid for students studying abroad. The aid and enrollment assumptions, as well as the overall growth in study abroad participation, were analyzed at various levels to determine the viability of the initiative.

Wofford’s foreign study initiative uses a 10% growth rate assumption for study abroad participation. In this model, Wofford did not raise enrollment to make up for the increasing number of students not enrolling due to study abroad.

Interim Subsidy & HIP Stipend

The Results: Transparent Scenario Analysis Builds Consensus and Confidence

The goal of modeling these projects and initiatives was not to analyze them individually, but to determine which combinations could grant Wofford a competitive edge while maintaining or improving the college’s contributions to its operating reserves.

Gardner and his team finished their presentation to the president and his board by creating and visualizing the impact of three scenarios composed of a mixture of the previously reviewed initiatives.

Each scenario utilized the Tuition Reset UP model, as it was the only model that significantly raised Wofford’s contributions to its operating reserves.

Contribution to Operating Reserves vs Scenario #1

Contribution to Operating Reserves vs Scenario #2

Contribution to Operating Reserves vs Scenario #3

Synario: Where Insight Meets Action

Through Synario, Gardner enabled the president and each cabinet member to explore Scenario #3 and encouraged them to adjust the model’s assumptions or incorporate a different mix of initiatives.

As stakeholders began to participate, the presentation turned into an active exploratory session where stakeholders contributed to creating a better future for Wofford College.

Wofford regularly uses Synario as part of their strategic planning process. Board communication using Synario is common when presenting the financial plan or evaluating new strategic directions.