Playing the Merit Aid Game at Public Regional Colleges

Public flagships and research universities are not the only institutions making significant investments in non-need-based aid. Many state regional colleges are increasingly offering merit aid as well. In fact, 40 percent of the 277 regional colleges examined in our new report, The Out-of-State Student Arms Race: How Public Universities Use Merit Aid to Recruit Nonresident Students,” provide merit aid to at least 10 percent of freshmen who lacked financial need; 23 percent provide it to at least 15 percent; and 14 percent provide it to 20 percent or more.

The report includes a list of the public regional colleges that provide merit aid to the largest share of freshmen without financial need on their campuses. You can view this list here.

It is probably not too surprising that four of the universities on the list hail from North Dakota –Valley City State University, Mayville State University, Dickinson State University, and Minot State University. These colleges feel they have little choice but to seek out nonresident students, given the steadily shrinking number of North Dakotan high school graduates. For example, nearly 40 percent of freshmen at Valley City come from other states.

These four universities have one major competitive advantage over most other public regional schools: North Dakota is the only state that substantially boosted spending on its public universities during the recession. Due to an oil boom in western North Dakota, the state was able to increase appropriations to the schools by about 40 percent per student from 2008 to 2014. With more resources in hand, these schools have been able to make themselves very attractive to nonresident students who are hunting for bargains.

Also prominent on the list is the University of North Alabama (UNA). For much of its history, UNA has predominantly enrolled students from just five Alabama counties. But the school has seen its enrollment decline in each of the past five years, as other public universities have begun to recruit heavily in the counties that it primarily serves.

The competition “does indeed make the job more difficult for us,” Thomas J. Calhoun Jr., vice president for enrollment management at UNA, recently told the TimesDaily. “It has created the need for us to redefine what our region is.”

“Everyone’s territory appears to be becoming everyone else’s territory, to the point that we don’t have a territory, really,” he said. “Everyone is competing everywhere.”

Now, the university is not just using merit aid to stem the flow of northern Alabama students to other schools, but it is starting to expand its recruiting presence out-of-state as well. Beginning this August, UNA will be able to charge nonresident students who receive a scholarship of at least $1,000 its in-state tuition rate. The school’s goal, according to the TimesDaily, is “to grab a larger percentage of students in Tennessee while working to create a market in other Southeastern states.”

Wichita State University

Another school that gives out a lot of merit aid is Wichita State University in Kansas, a state that has cut spending on higher education by about 23 percent since 2008. To make up for lost revenue, the university is seeking to grow by enrolling an additional 7,000 students. This effort will require Wichita State to engage in “much more aggressive recruiting of freshmen both in-state and out-of-state,” according to John Bardo, the school’s president.

As a first step, the university spent $700,000 in 2013 to hire the enrollment management firm Royall & Company to help expand its reach outside Kansas. With the help of the company, the university is purchasing lists of names of hundreds of thousands of high school sophomores, juniors, and seniors that it can recruit nationwide. “The plan is to spend hundreds of thousands,” Bardo said. “The payoff will be millions.”

The school has also restructured its scholarship program to make it more appealing to “academically talented students.” For the first time, students are automatically considered for merit scholarships upon admission to the university (instead of having to apply for them separately). And the scholarships are available for up to four years of school. Previously, students had to reapply for them each year.

“Our interest is in making sure we keep the best and brightest people in Wichita so that they become part of our long-term workforce,” Bardo stated. “The new plan also allows us to recruit bright new people from out of state who we can help become part of our community.”

Wichita State is certainly generous with merit aid. In 2012-13, 36 percent of freshmen with no financial need received merit aid, averaging $2,712 per year.

Northern Illinois University

Northern Illinois University (NIU) may never have wanted to join the merit aid arms race. But the school realized several years ago that it didn’t have any other choice.

Enrollment was dropping, in part because the supply of high school graduates in Illinois was in decline. But there was also another major factor: Public universities from other states were increasingly coming in and recruiting students in the 11 northern Illinois counties that the school has traditionally served.

“Northern Illinois has become a robust recruitment territory for many out-of-state colleges and universities, some of which have Chicago-based recruitment offices,” university officials wrote in the school’s 2012-16 enrollment management strategic plan.

“Our competition is aggressive,” the enrollment management plan stated, “and we need more dollars to compete and let high-achieving students, especially those in the top 10 percent of their graduating class, know how much they are valued.”

As a result, NIU set aside $10 million in 2011 to create two new scholarship programs. The first was aimed at keeping top Illinois students in the state. The second was to help the university begin to recruit out-of-state students. Under the program, top students from Indiana, Iowa, and Wisconsin were eligible to have their out-of-state tuition discounted by 50 percent.

In 2012-13, about 13 percent of the university’s freshmen with no financial need received merit aid, averaging $4,635. While the proportion of students receiving merit aid is small compared with other institutions discussed in this post, it is likely to grow as NIU is still experiencing enrollment declines.

In response, the university has been working with outside consultants to improve its merit aid offerings. And the administration has floated plans to significantly reduce the out-of-state tuition for all students from the Midwest “to create a greater incentive for these students to enroll at NIU.”

The increased competition for students has left some NIU officials nostalgic for the past. “It used to be you could just sit back and wait for the students to come to you,” Paul Palian, the university’s director of media and public relations, recently told The Associated Press.“