<p>Applications for the incoming Class of 2013 were very strong. There was a slight drop in the number of applications, but the yield percentage of students accepting admission was on par with previous years.</p>
<p>More than 60 percent of Holy Cross students receive some form of financial aid. </p>
<p>Is the yield at Holy Cross “strong”?</p>
<p>Last year – total yield was 30%. This was supported by the school accepting nearly 40% of its class through early decision. Yield on those offered admission through regular decision was only 21% (note: based on common data set). </p>
<p>From what I have read – 25% of the HC class are D1 athletes, “over 10%” are children of alumni. That leaves a relatively low level of positions in the class (less than 500) for others without those qualifications. Seems like they accept students for the balance of the class with very strong academic credentials (perhaps HC viewed as a safety for many?) – and can manage the numbers with a relatively low yield.</p>
<p>What they were trying to communicate was that the yield % had not dropped from last year despite the financial crisis which is impressive. A lot of people assumed that many would be selecting cheaper state schools due to the economic troubles affecting many.</p>
<p>HC increased its financial aid budget by 10 percent this year, like many private schools, to mitigate economic impacts and sustain its yield.</p>
<p>It will be interesting to see how the school will be able to sustain this level of financial support in the future without continued scale back in services. Last year, need based financial aid representing about 5% of the school’s reported endowment. As the post you note references, the endowment took a major hit this past year. If the school were to maintain a similar approach to managing its finances in the future, this could require a reduction of $10MM or more in its annual budget (If one assumes that HC’s $600MM endowment fell by 30%-40%, which is likely if they marked real estate and private equity type investments to market).</p>
<p>This is the challenge that many smaller, moderately endowed private schools will face in the coming years – as they also deal with the expected reduction in college application levels across the Board.</p>
<p>Good analysis. One item in HC’s favor is that it has a good sized endowment for the size of the student body. (i.e endowment per student is higher than most)</p>
<p>Excellent point. Per the attached (which is a bit dated), it would imply that HC is better positioned than other smaller, top liberal arts colleges to sustain educational funding. Pre the financial crisis – would imply that HC was about $800K-$900K per student (at higher end of the range). Regardless, all will face elements of pressure in the coming years.</p>
<p>[Colby</a> College | Why Is Endowment Important?](<a href=“http://www.colby.edu/campaign/campaign_news/endowment.cfm]Colby”>http://www.colby.edu/campaign/campaign_news/endowment.cfm)</p>
<p>Sorry my math was wrong. If HC has about 3000 students and $600MM in endowment (pre recent pressures) – this would imply $200K per student, which is middle of the range shown.</p>
<p>According to their web site: [At</a> a Glance | College of the Holy Cross](<a href=“http://www.holycross.edu/abouthc/glance/]At”>http://www.holycross.edu/abouthc/glance/)</p>
<p>(Fiscal Year Ended 6/30/08) Per Student<br>
Total Net Assets $ 680,305,000 $240,731
Endowment Market Value $ 627,264,000 $221,962 </p>
<p>This is not bad by comparison at all. Endowment per student at Notre Dame is $299,645, at Brown $200,013, and at Duke $193,114, while BC’s endowment per student is only $83,963. All of these figures were as of 7/28/2008 so before the bulk of the stock market decline.</p>
<p>[FAQ</a> - Boston College](<a href=“http://www.bc.edu/alumni/faq.html]FAQ”>http://www.bc.edu/alumni/faq.html)</p>
<p>No questions Holy Cross is in a comparably solid position at current.</p>
<p>Here is the issue the school (and other smaller private schools) will face. If (post the crisis), the school has $150K in endowment per student and uses 5% of the endowment per year to fund education/aid – this implies an average subsidy of $6K per student. Assuming 60% of students get aid – that is $10K in aid per student on an average tuition bill of $35K-$40K.</p>
<p>The problem is that it costs much more than $35K-$40K to educate a student (estimates I have received from folks involved with this are in the $60K+ range). In recent years, all schools have rapidly increased the “list” price to address this issue (or at least narrow the gap). This has been achievable in as enviroment with rapidly increasing applications and a robust stock market. This has obviously changed. Are average tuition increases of 7%+ likely in the future? Can a school like HC sustain its commitment to need blind admission if this is the case?</p>
<p>Other schools are adapting different models to address this trend. The focus on pre-professional programs (i.e., business) allows schools to develop revenue streams from graduate programs. Some schools are emphasizing on line education as an efficient way to deliver education (and fund other programs).</p>
<p>Time will tell how if small liberal arts college like HC can maintain its current approach without a substantial increase in its endowment. On its face, looks challenging.</p>
<p>Holy Cross is one of the oldest and wealthiest Catholic colleges in the nation so if they start to have issues, this will mean there are very serious issues for the vast majority of comparable colleges. Catholic colleges, in general, were late to the game of raising funds for endowments. The vast majority of Catholic colleges and universities were founded by religious orders, such as the Jesuits or the Sisters of Notre Dame. A smaller number were founded by individual dioceses of the church. In either case, the institutions usually relied on the order or the church for resources, including land. Priests, brothers, and nuns served as faculty members — free of charge. And the students were recent poor immigrants. As one comparable example, Villanova has an endowment of $355 million almost half of what HC’s is and their enrollment is 10,600 over three times the size of HC.</p>
<p>If schools don’t adapt their approaches their will likely be substantial issues.</p>
<p>There are paths to address these trends – such as the development of revenue driving pre-professional/graduate programs – that can mitigate the need for susbtantial increases in undergraduate tuition. Schools like BC, Villanova and Fairfield have moved down this path. </p>
<p>HC’s approach seems more focused on competing against the Colby’s and Amherst’s as a top small liberal arts college. This will be challenging financially – unless the school chooses to move down a path that makes it more exclusive financially. </p>
<p>Lots for the school to figure out in the coming years.</p>
<p>It is not quite as bleak as you seem to be implying. Based on your Colby article link, HC’s endowment per student is already higher than Wesleyan, Bates, and Connecticut all quality LACs. I know that growing the endowment is a high priority for Holy Cross. Given their late start in building one due to their Catholic historical beginnings, I think they have made tremendous progress in the past 30 years starting pretty much at zero. I know that increasing the endowment is a focus for the school as it is for all liberal arts colleges.</p>
<p>Sorry if my message came across the wrong way. I don’t mean to imply the outlook for HC is bleak. HC is a very good school with admirable values – and is not at risk of maintaining a solid reputation. My questions relate more to how the school may perform relative to its aspirations given some of the trends it will face in coming years.</p>
<p>Enjoyed the discussion.</p>
<p>Same here.</p>