Economics of SEM

SEM in this context stands for “Strategic Enrollment Management“. A recent article on strategic enrollment management in the Shepherd University enrollment management newsletter provides insight into the structure of strategic enrollment management components:

Revenue is an important part of the SEM strategy building. The institution must determine its Optimum Revenue, defined as the sum of appropriations and tuition revenue. Like Optimum Enrollment, (benchmark enrollment figure that indicates revenues and expenditures are in balance) Optimal Revenue is a benchmark that fluctuates and is impossible to calculate with absolute precision. An institution’s Optimum Tuition rate may actually be lower or significantly higher that the tuition currently charged. Current Revenue is then compared to Optimum Revenue. The difference becomes the SEM Revenue Goal.

  • Current Enrollment x Current Tuition = Current Revenue
  • Optimum Enrollment x Optimum Tuition = Optimum Revenue
  • Optimum Revenue – Current Revenue = SEM Revenue Goal

Strategic Reinvestment, a key economic model of SEM, is a function of the SEM Revenue Goal rather than an absolute dollar figure. This refers to allocating resources saved from existing revenue streams, or allocating new revenues generated by SEM strategies to further the success of the SEM program. An example of this is setting financial aid levels as a function of revenue. The flexibility of this reinvestment provides unexpected control in bringing in the class at or above numerical and quality expectations until optimum levels are achieved. Such an approach eliminates important opportunities through miscalculating yields on financial aid offerings or putting continuing students in competition with new students for limited financial resources.


Shepherd University Enrollment Management Newsletter:

http://www.shepherd.edu/university/enrollment/

Additional information on strategic enrollment management:
http://consulting.aacrao.org/tag/strategic-enrollment-management/