Here are some thoughts on admissions trends. This may be a perspective that is more useful at an institutional policy level, but staff should at least have some awareness of the forces underlying the institutional behavior they encounter and the annual reports of who is up and who is down.

In general the trends we are tracking are evidence that the financial strength of institutions is determining to an ever greater extent the success they have in the market. In this past year, for example, the bond rating agency Standard and Poor's noted bluntly that, among the private colleges and universities they rate, the strong are getting stronger, the weak are getting weaker.

Further evidence: the Ivy League schools will, to varying degrees, reduce or eliminate loan burden for the lower income families ($40K and below) whose students are admitted. This won't change admit decisions, and therefore won't in our view have a great impact on other private colleges. There can't be many kids admitted to Harvard or Princeton who decide instead to go to Pretty Good College. But this move by itself may scare other schools into more aggressive discounting, which will mess things up for everybody but the Ivy League.

The Ivy League move WILL likely cause the "premier" publics to consider introducing merit scholarships to an even greater extent than currently. Iowa State, nowhere near premier status, buys lots of National Merit Scholars currently. Places such as Michigan and Virginia may feel they'll have to be more aggressive. This WILL hurt privates.

State finance policies are playing a bigger roll in determining winners and losers. States in which good policy helps the private colleges in the state - Illinois and Minnesota, for example - have a stronger set of private colleges than the states around them. States such as GA, SC, and FLA, with their public sector emphasis on Hope-style scholarships, are weakening their privates relative not only to the public sector but also relative to other private colleges in the region. For this reason, in the Southeast, market position and student profile will become an ever more critical factor because it is one thing the public sector cannot achieve with its price advantage.

Financing developments such as private loan programs will further restructure the market into strong and weak groupings as colleges select associations through which they can extract more favorable borrowing rates from the market. That is, colleges with superior student loan repayment histories can achieve better loan interest rates acting as an elite group than they can as part of a national portfolio of loans which is burdened by many weak institutions.

While financial strength is ever more linked to market position, it seems true nationally that the highest quality schools had a good year, those downstream had mixed results. Those modest institutions with a strong regional or niche market did well, in general. Those fine national liberal arts colleges at the bottom of tier one struggled to stay even. Market leaders did well, market followers faltered.

This observation argues for the growing importance of "brand promise" as a force in how the market assesses colleges and universities. We believe institutions and their admissions staffs should be aware of the associated concepts and start to build them into marketing and communication strategies.

Finally, the topic of pre-paid tuition and tuition savings plans. If and when TPI can achieve a tax advantaged status and cements a relationship with TIAA, it could become the first major, positive, national initiative benefiting private higher education to occur in the last two decades. Our analysis of the financial assumptions and the behavior of the capital markets indicates that this will be a viable, credible savings vehicle for families - one that is a significantly better option than state pre-paid plans.

The one tuition savings plan to emerge on the national scene - Sage Scholars - recently dropped its affiliation with Federated Investors and united with Harris Bank. As a result, it will offer savers a broad assortment of no-load mutual funds AND the tuition discount offered by member colleges. This makes the plan credible and viable for both families and schools. While Sage was affiliated with Federated, savers would have paid high commissions, high management fees, and as a result forfeited the opportunity for market-level returns in any asset class.

We advise our clients not to enter exclusive agreements with any such plan so as to maintain and benefit from a competitive environment.