Public Education

Diversifying Revenue

Today, institutions of higher education are being encouraged and challenged to think creatively about expanding and developing new revenue sources to support the their short-term and long-term goals. Moody’s Investors Services has outlined in its published reports how every traditional revenue stream for colleges and universities is facing some sort of pressure.

Unfortunately, the pressure on all revenue streams and sources is the result of macro-level economic, technological and public opinion shifts, and these changes are largely beyond the control of institutions.

The Moody analysts have cautioned that revenue streams will never flow as robustly as they did before 2008. It’s been stated the change will require a fundamental shift in how colleges and universities operate; one that will require more strategic thinking.

In their studies, Moody’s notes that colleges and universities will have to rely on strategic leaders that are willing to address these challenges through better use of technology to cut costs, create efficiency in their operations, demonstrate value, reach out to new markets, and prioritize its programs. However, in doing so, many of these efforts may create disputes with faculty members or other institutional constituents, unless they are able to get the collective buy-in that has been the staple of higher education governance. But with goals being established and the evolution taking place as part of the process, hopefully, there will be a more widespread understanding on all sides.

Major revenue constraints can be attributed to larger changes in the economic landscape, including lower household incomes, changes and fluctuations in the economic and federal government picture, declines in the number of high school graduates, the emergence of new technologies, and a growing interest in getting the most out of a college education – particularly as it pertains to employment after graduation. A stable fiscal picture and outlook would require improved pricing power, a sustained and truly measured decrease in the unemployment rate, improvements in the housing market, and several years of consistent stock market returns.

The traditional higher education model has been disrupted by the ability of massive open online courses, particularly by the legitimization of online education and other technological innovations. In many ways, this has signaled a fundamental shift in strategy by industry leaders to embrace these technological changes that threaten to destabilize the residential college and university’s business model over the long run.

There are other related challenges facing higher education: the growing profile of student debt, which has topped $1 trillion nationally, and default rates, and pressure on politicians and accreditation agencies to ensure the value of degrees. In addition, an alarm continues to sound over a potential student loan bubble and the diminishing affordability of higher education.

One way for colleges and universities to get students, and their parents, to pay for higher tuition is by demonstrating that the outcomes – including their campus experience, postgraduate employment, graduate school enrollment, and long-term success and happiness – are well worth the tuition and future job pay. Students and their parents want to know, “What am I getting for my investment?” As a result, recruiters have a tougher job “selling” a traditional education with the cost of education continuing to escalate.

But the on campus education and living and learning experience are the “door openers.” As I like to say, “We are a product of our environment.” Making the right friends, building relationships with influential professors, administrators, parents and relatives of friends, and fraternity brothers or sorority sisters all get added into the equation of the student’s environment. In retrospect, students may forget or never use half of what they learn, but the connections and friends they make and the experiences they have while in college are priceless.

Over 1/3 of the colleges and universities in the nation are experiencing some sort of financial crisis. Many have gone from operating full operating budgets to a comfortable black to a severely red. And cash reserves have dropped, as well as endowments.

Without a doubt, the university must find new revenue sources. Attracting more out-of-state and international students is one additional source of revenue for these institutions.

We must never lose sight of the fact of the importance of investing in higher education. Educating the young is of primary importance. Devising ways to maximize time and money, such as integrating class projects and research that might result in publication is another alternative to consider.

Allowing and/or expanding commercialism on the campus may provide added sources of revenue. Examples could include allowing corporate naming rights to athletic facilities or increased advertising signage inside arenas and stadiums. This may seem drastic and some may even say, “You have to pick your poison” in being creative to increase your revenue streams.

Attempting to reduce the university’s “discount rate,” the percentage of the total tuition bill for the entire student body that the university waives to grant financial aid to its students is one possibility. But that can be risky business. Any move to reduce the discount rate potentially upsets an exceedingly delicate balance. Looking to attract families that are able and willing to pay full or near full tuition, while simultaneously making the school accessible to less wealthy students, and hitting the right mark, granting merit aid to lure high-potential students who might later benefit the school and broader community, may be one possibility to work in achieving a better balance among the many factors that feed enrollment. Additionally, stepping-up the fundraising efforts to offset any potential rising discount rate may also be helpful.

Another factor to think about is the amount of construction the institution may be having on campus, especially during campus tours, to determine the effect, it may or has caused in any dips in the recruiting process. Even though construction on campus is a sign of growth and improvement, in the short-term it is not always the most attractive thing for students to see and hear on campus, or experience during a campus tour with their parents.

Institutions of higher education must also anticipate any approaching demographic shifts. They may have to grapple with an economic and social environment in which more families bargain for the best deals among different schools. If this is the case, the institutions should consider making their best offers up-front first and try to avoid drawn-out negotiations.

Students are creating more choices for themselves and they have more access to more choices. The internet makes it easier for students to research and apply to more schools.

Some of the private institutions have held back from the tuition-hiking trend, and some have even cut tuition costs in an effort to attract more students. Other schools have taken more unconventional measures, such as freezing tuition, offering three-year degree programs, or giving students four-year graduation guarantees. They are doing this with the goal of increasing enrollment levels that will more than offset the reductions being made, thereby providing more overall revenue without sacrificing the student’s education.

But also since the economic downturn, private colleges and universities across the nation have redoubled efforts to cut their operating costs, improve their efficiency, and enhance their affordability in order to stay within reach of families from all backgrounds. You cannot lose sight of that. Making it work has to be done on both ends; cutting costs and increasing revenues.

Other strategies that could be considered to increase the enrollment and revenue streams at institutions of higher education could include the following:

Segmenting search to target upper profile students with different messages;
Increasing scholarship levels (while still maintaining net revenue needs);
Targeting out-of-state students or students outside of traditional markets;
Targeting high school honors programs;
Holding a scholarship recognition day;
Stressing off-campus opportunities such as internships and study abroad;
Promoting graduate school placements and outcomes; and
Developing high profile academic majors, pre-professional programs, or new majors and programs to support enrollment growth.
Additional considerations for increasing revenue streams might include:

Review the individual educational programs in-place and revenues provided by each and coverage of direct costs and determine what changes should be made, if any;
Acceleration of the 4 year degree programs into 3 to 3 ½ year programs to save on tuition and utilize it as a marketing tool for recruiting, but do so without short changing the student’s education;
Providing an automatic 2-year graduate scholarship at the university for students who enroll in a 4 year undergrad program and meet and maintain a defined GPA level and other pre-defined standards and goals of the university. Use as a tool for marketing and recruitment;
Having a full-time grant application aid/seeker for the university searching for state and federal funds, as well as working with faculty and staff to develop research projects for funding and using as educational programs for the students;
Establishing joint and cooperative programs with other universities in the US and abroad for recruiting;
Consider an overall re-evaluation of the recruiting process for identifying and “going after” potential students, thereby expanding the horizons and outreach;
Obtaining more exposure on a “national and multi-state” level;
Determine if any new programs should be added, programs dropped, or enhanced and/or expanded;
Develop tools for “presenting a plan” and a “comprehensively designed package” for financing and paying the cost for education;
Reaching-out to alumni and friends for enhanced ways to provide for contributions to the university through annuities, insurance, and other charitable giving techniques and products; and
Developing relationships with corporate sponsors for grants and contributions and placements for graduating students.
Conclusion

For the suggestions mentioned about possible new revenue source considerations to support the institution’s short-term and long-term goals, it will be important to develop predictive financial modeling tools for testing the proposed changes and outcomes to the enrollment levels and the projected effects on the revenue streams and the overall bottom line.

In doing all of this we must never lose sight of the fact that education prepares graduates to lead lives of achievement, contribution and meaning. And, as I like to say, “The Students will become a Product of their Environment.”

For years, visitors from certain foreign countries have been able to travel to America without first getting a formal Visa sticker placed in their passport. Implemented in 1998, the “Visa Waiver Program” (VWP) has allowed for visitors of several countries to come to America for tourism or business purposes for up to 90 days without getting a Visa put in their passport. During 2007, more than 15 million visitors from VWP countries arrived in the United States.

As of January 12, 2009 America’s new ESTA program requires Visa Waiver Program visitors coming to the U.S. for tourist or business purposes via a plane or ship to “register” online before entering the United States to see if they pose a law enforcement or security risk to the U.S. ESTA is not required for land crossings. Officials are asking that the ESTA registration be done at least 72 hours prior to leaving, but theoretically it is possible to register at the last minute. An ESTA Travel Authorization is free, valid for 2 years, and valid for multiple entries.

Here are some Frequently Asked Questions (FAQs) for ESTA Travel Authorization:

What Countries Are in the Visa Waiver Program?

Andorra, Austria, Australia, Belgium, Brunei, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Liechtenstein, Lithuania, Luxembourg, Monaco, The Netherlands, New Zealand, Norway, Portugal, San Marino, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, and the United Kingdom.

Where Do I Apply for an ESTA Travel Authorization?

A website, operated by the American government, is where you register for ESTA: esta.cbp.dhs.gov. The ESTA information you submit via the computer is compared with certain American law enforcement databases and then either approved or denied. Foreign travelers will not be able to submit ESTA applications at American airports after arriving or at a U.S. Embassy in their country.

What if I Don’t Have Plans to Travel to the U.S. Yet?

VWP travelers are not required to have specific plans to travel to the United States before they apply for an ESTA Travel Authorization. As soon as VWP travelers begin to plan a trip to visit the U.S., they are encouraged to apply for travel authorization through the ESTA website. Applicants are not required to update their destination addresses or itineraries if they change after their ESTA Travel Authorization has been granted.

Does the ESTA Travel Authorization Guarantee Entry to the U.S.?

An ESTA Travel Authorization only authorizes a traveler to board an airline or ship for travel to the U.S. under the Visa Waiver Program. After they arrive, travelers who obtained an ESTA Travel Authorization may still be denied entry (also called “admission”) at a U.S. port of entry, such as an American airport. An approved ESTA is not a guarantee of admissibility at an American airport. In all cases, the American airport officers make the final determination whether a foreign traveler can enter the U.S. or not. You still have to establish to the satisfaction of the inspecting officer that you are entitled to be admitted to the U.S. under the Visa Waiver Program.

Can I Change My Travel Itinerary?

It is possible to change an itinerary on an existing ESTA Travel Authorization; ESTA is designed so that you can update parts of it at any time. Travelers who did not get an ESTA approval may be denied boarding by the airlines, experience delayed processing, or be denied admission to the U.S. at the American airport.

What If I Already Have a Valid B1/B2 Visitor Visa?

While the ESTA Travel Authorization is completed online with no interview, there are Visas that require a U.S. Embassy interview. The Visa process has separate procedures, which generally require an appointment, travel to a U.S. Embassy, an interview with a Consular Officer, processing time, and the payment of an application fee. If a foreign national already went to the U.S. Embassy and has a valid B1/B2 Visitor Visa pasted in their passport it is not necessary to get an ESTA Travel Authorization because the traveler will be entering with a B1/B2 Visitor Visa and not through the Visa Waiver Program. Keep in mind that an approved ESTA Travel Authorization is not a Visa.

Can I Re-Apply for an ESTA Travel Authorization if Denied?

Yes, but you must wait at least 10 days to reapply and your circumstances must have changed. Unless there is a change in a substantive fact, re-application will not change the result. Keep in mind that applying for an ESTA Travel Authorization with false information can cause a foreign national to be permanently barred from ever entering America. The ESTA system is designed to try to prevent individuals from changing and manipulating an ESTA entry until they receive an approval.

What If I am Denied an ESTA Travel Authorization and Have No Changed Circumstances?

There are three types of responses to an ESTA application; approved, pending or travel not authorized (denied). Applicants who receive a “pending” response are advised to check the website 72 hours later. Applicants who are denied will be required to go to a U.S. Embassy to apply for a formal nonimmigrant visa, such as a B1/B2 Visa, which may take months.

Can a Traveler Find Out the Reason Why an ESTA Application was Denied?

The U.S. Dept. of Homeland Security has stated that travelers may contact the DHS Travel Redress Inquiry Program (DHS TRIP at dhs.gov) but there are no guarantees that information about a denial will be divulged. U.S. Embassies and Consulates are not required to provide details about an ESTA denial nor resolve the issue that caused the ESTA denial.

What If I Have a Criminal Record?

Only those qualified to travel under the VWP are eligible to pre-register through ESTA. Persons who have been arrested and/or convicted are generally not eligible for VWP and probably require a formal Visa, such as a B1/B2 Visa, to travel to America. If a foreign national has received tickets for speeding (which don’t usually result in an arrest or conviction) they are probably still eligible for the VWP and ESTA. If a foreign traveler has been denied entry into or deported from the U.S., they require a formal Visa.

Do Any Other Countries Have a Similar Program?

Australia has a program called the Electronic Travel Authority (ETA) that mandates travelers to submit an ETA application electronically through a website requesting permission to travel to Australia. Airlines may refuse to accept passengers who do not have either an approved ETA or Visa to enter Australia.

How Long Will the ESTA Application Data be Stored? Who Can Access It?

The ESTA Travel Authorization is valid for two years or until the traveler’s passport expires, whichever comes first. The American government will maintain the information for at least 15 years to allow retrieval of the information for law enforcement, national security, or investigatory purposes. Information submitted through ESTA can also be shared with any U.S. government organization.

What Information Does the Airlines Get?

Airlines will receive confirmation of a passenger’s ESTA status visa the “Advance Passenger Information System” (APIS) which shows whether the ESTA authorization has been granted for a Visa Waiver Program traveler. It is recommended that the traveler print out the ESTA application approval in order to maintain a record of their ESTA application number and to have confirmation of their ESTA status.

What About Children?

Accompanied and unaccompanied children, regardless of age, are required to obtain an independent ESTA Travel Authorization.

What if a Mistake was Made on the ESTA Application?

The ESTA website will ask applicants to review their application before submitting it. Also, there is an update function for certain information such as email address, telephone number, or flight information. If an applicant makes a mistake that cannot be “updated,” he will need to submit a new ESTA application.

What if I Only Have a Connecting Flight Through the U.S.?

Visa Waiver Program visitors who have a connecting flight in the U.S. are required to either have ESTA Travel Authorization or a Visa from a U.S. Embassy in their passport to travel through the U.S. even for a one hour stop. If a traveler is only planning to stop in the U.S. en route to another country, the traveler should enter the words “In Transit” and his final destination in the address lines under the heading “Address While In The United States” on the ESTA application.

What Are the Questions on the ESTA Travel Authorization Application?

The traveler must provide (in English) biographical data including name, birth date, country of citizenship, country of residence, email address, sex, telephone number, passport information, destination address in the U.S., travel information (round trip airline ticket, flight number and city where you are boarding) as well as questions regarding communicable diseases (chancroid, gonorrhea, granuloma inquinale, HIV, leprosy, lymphogranuloma venereum, syphilis [active], tuberculosis [active], and others), physical or mental disorders, drug addiction problems, arrests, convictions, past history of visa cancellation or denial, and prior deportations from the U.S. The traveler will also be asked whether they are seeking work in the U.S., have ever been deported or tried to get a visa by fraud or misrepresentation. The traveler will be asked if they have ever detained a child of a U.S. Citizen granted custody of the child, and whether they have ever asserted immunity from prosecution.

Do I Select “Business” or “Pleasure (Tourist) at the Airport Port of Entry?

After the ESTA Travel Authorization is granted, the foreign traveler will be interviewed by government officers at the first American airport they land. The officer will ask what the foreign traveler will be doing in America and the questioning can take up to four hours in a detained setting called “secondary inspection.” The officer may ask the traveler “what else are you doing in America?” repeatedly to try to get “the real” answer. If the traveler is only going to be a tourist, they are not allowed to do any business, including meeting with any attorneys, applying for a bank account, meeting with real estate agents, or other business consulting activities. Even though the traveler is going to conduct just one business meeting while in America, they are required to report it and enter as a business visitor. The business visitor is allowed to participate in tourist activities, but the tourist visitor is not allowed to participate in any business activities. Therefore, if any business might be conducted while in America, it is best to tell the government officers about it at the airport to avoid being accused of lying, put immediately on a plane back to your home country, and barred from America for life.

What Else Do Can the Airport Officers Make Me Prove After I Land?

The airport officers will ask the traveler proof of a foreign residence (address on foreign driver’s license), whether their intention is to depart at the end of the visit (round trip airline ticket), whether the traveler has a job (letter, paystub, business card) and family in their home country, (marriage certificate, childrens’ birth certificates), and whether the traveler has the money to travel around America (bank statement or credit cards with bank letter showing credit limit). The airport officers are also required to ask where the traveler will stay in America (hotel reservations or friends/relatives’ homes) and have been known to pick up the phone to verify all of the aforementioned information.

Can I Be Searched in the American Airport? Am I Entitled to Legal Representation?

While being interviewed at the American airport, all luggage (even locked bags) can be searched, as well as the traveler’s body and his/her cell phone (including text messages and phone numbers) and laptop (including hard drive). The officers may “google” a traveler’s name and check out their myspace, Facebook or hyves pages. The traveler is not allowed to be represented by an attorney or even call their attorney while in “secondary inspection.” Bathroom visits, water and food may be limited, so it is best to prepare for such an occasion while still on the plane before landing.

Do I Still Have to Go Through the “US-VISIT” Program at the American Airport?

Foreign travelers arriving at American airports and seaports must still be photographed and fingerprinted every time they enter the U.S.

Who Should I Ask For Help to Fill Out the ESTA Application?

The information a traveler provides on the ESTA application can remain in their file with U.S. authorities for a minimum of 15 years – probably longer. If a foreign traveler has some questions about how to answer the questions so as not to be permanently barred from America, it would be prudent to them to pay for a legal consultation with an American Immigration Attorney who is a member of the American Immigration Lawyers Association (AILA). Beware of unauthorized private websites that offer ESTA application assistance for $49.99 – they are usually not authorized to practice immigration law and are asking travelers to pay for a copy of the application questions, which are free on the dhs.gov website.

If I Am Denied the ESTA Travel Authorization Will it Effect My Ability to Obtain a Visa at the U.S. Embassy?

When the ESTA Travel Authorization is denied, the foreign traveler must make an appointment at a U.S. Embassy in their country to apply for a formal Visa. The U.S. Embassy is operated by the U.S. Department of State and there are no expedited procedures for those who have been denied ESTA Travel Authorization. Because the ESTA program is so new, it is impossible to predict how badly a denial of the ESTA Travel Authorization will impact a traveler’s application for a Visa at a U.S. Embassy or impact their future travel to America in general. American Immigration Attorneys are in close contact with their foreign clients and will share the denial information with each other starting in January 2009. Currently there are no government policies regulating this area of the law, or opportunities to appeal a denial.

When Is the a “New” ESTA Travel Authorization Required?

A new ESTA Travel Authorization is required during the two years if (1) the traveler is issued a new passport (2) the traveler changes his name (3) the traveler changes his or her gender (4) the traveler’s country of citizenship changes or (5) the circumstances underlying the traveler’s previous responses to any of the ESTA application questions requiring a “yes” or “no” response have changed (such as a new arrest).

Can an American Immigration Attorney, Travel Agent or Employer Fill Out the ESTA Application?

A third party, such as a relative, travel agent or American Immigration Attorney, is permitted to submit an ESTA application on behalf of a VWP traveler. Be aware that the traveler is still responsible under the law for the answers submitted on his or her behalf by a third party.

Over 68,000 travelers have already voluntarily registered by using the ESTA online system in the last few months. Applicants are reminded to obtain a new “e-passport” which has an integrated computer chip capable of storing biographic information from the data page, as well as other biometric information, when registering with ESTA.