Higher Education at Private, Nonprofit Colleges in Wisconsin

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The Wheeler Report sat down with Wisconsin Association of Independent Colleges and Universities President Dr. Rolf Wegenke to discuss higher education in Wisconsin, affordability, and trends in higher education going forward. 

Making Private Colleges Affordable

Wegenke said he thinks what is happening is different depending on whether it’s private, nonprofit or public higher education. Wegenke said, “If you look at out-of-pocket costs for students, the last year for which we have figures, the average tuition for our members was $33,034. The average financial aid package was $28,010. Leaving a net tuition of $5,024. In that same year when the net came out, the average tuition at a UW campus was at $8,516…It has been 11 years that the net private college tuition average has been under $5,500.”  Wegenke emphasized that is a challenge for his members, helping prospective students and families understand that the sticker price is not what students usually pay for attending their colleges. A recent survey by Sallie Mae says 65% of people stop looking at schools after looking at the published tuition rates.

Privately raised financial aid is the fastest growing expense at private schools, according to Wegenke. While students apply for aid from the federal and state governments, the private universities raise their own funds to provide their own assistance bringing down the out-of-pocket cost for students and families.  Wegenke explained that WAICU schools have a larger percentage of low-income students and minority students than the UW System does. According to IPEDS data provided by WAICU, 30% of WAICU students are low-income, compared to UW at 24%, WAICU has a 24% minority population compared to UW System at 17%, and WAICU has 33% of its students who are over the age of 25, while the UW System is at 21%. Wegenke explained that the private schools work hard to raise funds to help people afford to attend their schools, “to the point, where financial aid is now one of the largest parts of our costs, and one of the largest drivers of our expenditures.”

Wegenke said the largest expense for schools is personnel.  WAICU schools have an average class size of 16 students and 12:1 student to faculty ratio, they don’t in general use teaching assistants, and they have to compete with public schools to get high demand professors in fields like STEM.  Wegenke said the WAICU schools have to respond to the market. Technology was #3 on the list of cost-drivers, and regulation was #4. Wegenke said one of the major roles of WAICU is helping its members deal with and address regulations. Wegenke pointed to a 2015 study commissioned by Vanderbilt University that showed regulatory compliance represents 3-11% of higher education institutions’ nonhospital operating expenses (6.4% was the average), and faculty and staff spend 4-15% of their time complying with federal regulations. The report says, “The range was driven by several factors, including the presence and extent of research at that institution (for which compliance cost per research dollar is relatively high, up to 25 percent).” Vanderbilt said, “Findings from the 13 representative institutions were extrapolated to the entire U.S. higher education sector, which resulted in an overall annual compliance estimate of $27 billion. The study estimates of that $27 billion, $17 billion was incurred due to higher-education and all-sector compliance, while $10 billion was estimated to be a result of research-related compliance. Higher-education compliance expenditures include $3 billion on regional accreditation and $2 billion on financial aid compliance. Research compliance expenditures include $6 billion on grants and contracts compliance.”

Wegenke then said the options facing private, nonprofit colleges are limited; schools can: 1.) Raise tuition (which he said is the opposite of what they want to do), 2.) Raise more funds for aid (Wegenke emphasized raising funds is harder than people think), or 3.) Decrease the school offerings, and/or cut costs. Continuous evaluation of school offerings based on the market demand and employer needs is essential, and Wegenke said private schools are faster to respond to the demand than public schools, but schools hesitate to eliminate programs and offerings.  Wegenke said schools generally don’t eliminate programs, rather they stop offering them as majors or minors, which can mean eliminating staff, but often times means offering new majors, therefore costs don’t get eliminated, they are transferred to a need somewhere else.

Private School Innovation and Flexibility

When asked about innovation and flexibility at WAICU schools, Wegenke first described how at one point UW-Madison had the only pharmacy school in Wisconsin. Concordia University then proceeded to raise the funds, built a building, hired faculty, and now graduate approximately 41% of all pharmacy graduates in the state. “That kind of responsiveness and agility is one of the advantages of being a private college.” The Concordia pharmacy program was developed in three years, which is lightning speed in higher education. Wegenke said private schools have more flexibility to respond to market needs for graduates faster than public schools are able to do. 

Alverno College, primarily an all-women’s college in Milwaukee, does not give students grades, but instead assesses their students on their understanding and mastery of the material and the skills in a given area.  Wegenke said the assessment process is an intense process, which includes lots of feedback from peers, instructors, and professionals in the field; and done every semester and at graduation.

The Medical College of Wisconsin was able to expand its medical school offerings by adding branch programs in Wausau and Green Bay.  Wegenke said, “The state has a shortage of physicians…so they built two new campuses.  One in De Pere and one in Wausau. They have graduated their first class, and the Medical College now provides 54% of all the physicians graduating every year in Wisconsin…They responded to a need and they did something creative.”

Online Programming

Wegenke said Lakeland University was the first school in the state to offer complete degrees online and explained that private schools have been offering night and weekend classes since the 70s. Wegenke highlighted that 33% of the students at WAICU schools are over 25 years of age, making them “nontraditional students.” Wegenke said the most successful programs for nontraditional students are the “blended programs” where students do a combination of online and on-campus classes. Wegenke emphasized the flexibility required to offer online and blended programs, especially to adults, saying that often these are people who already have a job but want to continue a degree, or work towards advancing a degree but cannot quit their job or leave their job to go to classes during the day. Wegenke projects online and blended programs will continue to be in high demand as more people change careers.  

UW and WAICU

Wegenke was quick to say the WAICU schools get along well with the UW System, and said they work in partnership in many areas.  However, Wegenke highlighted the concern for public policy to subsidize the UW System at the exclusion of the private, nonprofit schools in Wisconsin.  As an example, Wegenke highlighted the need for nurse-educators in the state, and the policy discussions around student loan forgiveness programs for nursing students.  Wegenke said there are four public nursing schools as well as five private schools offering doctoral nursing programs.  Wegenke said if the state only offered loan forgiveness to nursing students at public institutions it could incentivize students to transfer to public  schools, but would not address the nursing shortage, especially in rural areas.

WAICU Member Benefits

Wegenke is particularly proud to discuss the cost-saving measures WAICU provides to its members. WAICU has been helping its members work together to “pool their purchasing power” to help the campuses obtain savings and lower their costs.  “In 15 years, we saved our members collectively $181,738,882, and our annual savings last year (2018) came to $22,194,632. We don’t think we are done by any means, but we think we have done more than any private college group in the United States to help our members band together to save money.”  Wegenke highlighted a story by the Wall Street Journal on the WAICU retirement plan. Wegenke said in some cases WAICU is able to save their member colleges 50-80% of their fees over their current retirement program. Additionally, WAICU has helped with a collaborative program for administration and enterprise resource management.  The program started with three colleges, and now has 10 members.

60 Forward

In his final remarks in the interview, Wegenke highlighted the 60Forward program, a program where the WAICU schools, the Wisconsin Technical College System, and the UW System have agreed to a common goal: increase the state’s postsecondary attainment rate to 60% by 2027. Wegenke said, “The state needs a lot more people with college degrees.”