Enrollment Management's Iron Triangle

Often admissions teams feel pressure to increase revenue, academic profile, and headcount all at once, but those can be in direct conflict with each other.

Iron Triangle Solo

Imagine those goals in an inflexible triangle made of iron. As you push outwards from the Enrollment angle, you inevitably eat into your revenue or academic profile.

Here are the risks whenever your team aims to increase enrollment, profile, or revenue:

enrollIncrease discount rate / Decrease student academic profile
Decrease student satisfaction / Reduce retention

When pursuing higher enrollment with all else being equal, an institution will boost certain awards, which drives the average discount rate up. Or, if they prefer not to incentivize with dollars, they may be required to admit students a below the typical threshold of GPA or test score. This will lower the class averages when those students yield. And there are inherent risks for each⁠; students below the profile threshold might not be academically prepared and will struggle to graduate, or an unpredictable surge in headcount may increase class sizes beyond what is tenable for students.

revenueMiss headcount target / Lose admits to competitors
Lose revenue / Decrease student profile

If the primary aim is to boost revenue, one way institutions try to maintain those dollars is by pulling back on certain awards. Often that comes at a price when not expertly modeled. Yield will suffer and competitive offers from other schools will suddenly seem much more generous. This loss in yield lowers headcount which actually decreases revenue, even if the discount rate is lower. The effect is seen disproportionately on the higher score students who have more opportunities and this skews the enrolling class downward in academic profile.

qualIncrease discount rate / Reduce net total revenue
Reduce future applicant pool / Face new competitors

Finally, with from a academic profile perspective, admissions teams who wish to improve their enrolling class will boost awards in Honors and higher ranking students. Of course, this influences the discount rate upward and thus decreases the net total revenue. All of a sudden, that institution may be competing in a different market, against other competitors, with less predictability concerning yield.

And of course, you're being told to do all three and more, which has an interactive effect.

Financial aid leveraging with Maguire Associates is the best way to understand and curtail these risks as much as possible, managing the enrollment management Iron Triangle.

Through decades of experience and because our modeling is so precise, we can minimize overspending on student populations that would already enroll, increase award offerings to desired populations that require and would benefit from an extra push, and increase your yield while lowering your discount rate. We know the risks and we can minimize the risks while leading you to your desired outcome.

We will help you make informed trade-off decisions to set achievable enrollment and financial goals, while helping you track your class every step of the way.

Learn why our clients consider us partners and then partner with us!

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Other financial aid leveraging topics include:

   ~ Optimizing Financial Aid Leveraging to Adjust Demographics

   ~ Maximizing Net Total Revenue Through Financial Aid Leveraging

   ~ Using Financial Aid Leveraging to Increase Academic Quality

   ~ Combining Goals and the Resulting ROI

Also, please be sure to understand the difference between individualized awarding and individual awards. For a complete rundown on what makes our financial aid leveraging the most efficient, read up on our explanation of individualized awarding.