The Southern Miss Strategy
Pre-COVID Higher Ed: Don’t worry about the yield
Southern public universities have been unusually inventive and entrepreneurial in developing novel strategies addressing the hand they were dealt: flat high school class sizes across the region along with a tight, competitive market for out-of-state students. The University of Southern Mississippi in Hattiesburg must rank as one of the more creative of these publics, bucking many of the pre-COVID trends and tactics used by the competition.
Let’s start with a striking chart:
Nearly every school we have examined in our look at pre-COVID higher ed has ratcheted up its aid budget in response to enrollment competition. Southern Miss has in contrast actually reduced its aid, placing it among a small subset of schools who have done so.
Did this lead to cratering incoming classes? No!
A First Stab at Fixing Things
Let’s start the story a few years earlier, when Rodney Bennett was hired away from the University of Georgia to become Southern Miss’ new President. Bennett’s hire in 2013 was motivated by Southern Miss’ deteriorating competitive position. Years later, Steve Moser, the Southern Miss Provost, said: “We were in a moment of enrollment decline with some pretty significant pressures around revenue. We were spiraling down and had not done the analysis necessary to make good decisions that could reverse that trend.” One of Bennett’s initiatives was restructuring the enrollment and retention efforts, which did not bear fruit right away. In fact, Southern Miss continued to see falls in raw applications numbers.
The standard solution to this would be to up financial aid and/or loosen admissions requirements. Bennett and the leadership team opted to do neither at first. Financial aid remained flat.
And Southern Miss slightly increased its admissions standards in this period.
Into 2016, these efforts were not succeeding:
Bennett and the team opted to try a new approach. Necessity is the mother of invention.
The University of Memphis
Time to shift our focus to one of Southern Miss’ large neighboring publics, the University of Memphis in Tennessee. There is some speculation involved here, but bear with us while we try and connect the dots. Memphis was able to dramatically increase its application numbers in 2014, due to a new streamlined application process, which according to the university allowed the enrollment office to respond to applications within 48 hours of submission.
IPEDS reporting errors or corrections in Memphis’ applications numbers may have occurred in 2014, ‘15 and ‘16.
The simplification of Memphis’ application process took effect in 2014 and dramatically increased the number of students applying there, from around 6k to almost 17k. To step beyond possible data problems for 2014-16, we can say with confidence that Memphis succeeded in sustainably doubling the number of applications from 6-7k per year to 14-15k, a major business victory.
This success looks to have caught the attention of Bennett and his team at Southern Miss because, at the end of the 2016 admissions cycle, they hired Kate Howard away from Memphis to become their new Dean of Admissions. Now the wrinkle here is that Howard and the Southern Miss team didn’t just replicate what Memphis had done, they applied a new twist.
Admit and don’t discount. If they want to be here, they will come.
The new twist involved several different enrollment levers, from marketing to admissions rates to out-of-state cost of attendance to financial aid budgeting and attitude towards yield. Southern Miss was first of all able to sizably increase the number of applications, beginning in the 2017 cycle.
A reset at a public university
Among the set of changes introduced in 2017 was a tuition reset, typically associated with smaller private colleges. In fact, Spring Hill College in Mobile, located near Hattiesburg, executed a reset soon after Southern Miss, as did Birmingham Southern, another private liberal arts college in central Alabama, a bit later on. Southern Miss’ reset affected only out-of-state students.
And didn’t affect in-state stated costs:
The reset permitted a reduction of the financial aid budget.
After the cut in financial aid in 2017, Southern Miss continued to cut the aid budget into 2019, running against trends across the US. Resets complicate calculating the Average Net Cost so we provide the following estimate, with provisos that there is greater-than-normal uncertainty about the figures:
This had an impact and the school restored its out-of-state entering classes to a level prior to Bennett’s hire:
As we have repeatedly emphasized, undergrad enrollment today is highly sensitive to pricing, with this 2017 rise providing yet another example.
Selective no more
Until 2016, both Memphis and Southern Miss had been lowering their admissions rate, Memphis pretty dramatically so as you can see in the chart presented above. Concurrently with its 2017 reset, Southern Miss radically loosened its admissions policy:
And the yield plunged:
Turning back to the University of Memphis, that school at first took the opportunity to increase its selectivity considerably, from 68% to 40% in 2014, with its new process boosting applications. But then they did the unexpected and relaxed admissions beginning in 2016 - immediately before Kate Howard’s departure for Southern Miss - and accepted a decline in yield. It began the period with an outstanding yield of 50% and ended with a pretty mediocre 21%.
But does yield have any “reality” beyond a college-rankings-driven image projection? Both Memphis and Southern Miss apparently chose to accept the decline in yield, a metric vigilantly watched across higher ed, as a consequence of their new strategy. The two schools decided to unshackle themselves from it.
Beyond yield, we would be concerned that the declining admissions standards would lead to more students unable to do college work. Retention of first years at Southern Miss has shown a mild deterioration since the new admissions strategy was put in place. The benchmark is lower than what we could expect from a pretty large public 4-year and 2019 retention was the lowest in recent years, so this is worth watching and represents one drawback of the new strategy. But the 2017 admissions loosening was certainly not linked to any severe plunge.
Graduation rates for the 2017 entering class, the first with the new approach implemented, are of course not yet available.
The Southern Mississippi strategy
Cut financial aid
Reset out-of-state topline tuition, letting prospects know the school is quite affordable and aligning stated cost of attendance with true net costs
Accept pretty much everyone who applies
Don’t worry about falling yield
Don’t try to guess beforehand which applicants really, truly want to come. You’ll know which ones do when they enroll.
The strategy change bore fruit, with entering class size hitting a high in 2018.
As you can tell from the chart, COVID affected Southern Miss pretty severely, so the administration has its work cut out for it. But there’s no doubt it has succeeded in similar straits before. Though university administrators spend their careers being criticized, stories like this one — accepting that inferences and qualifications are needed to piece it together — illustrates how there are smart, creative management teams running schools with resilience and success.
Read this post and others at the CTAS site.
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