I’m sorry you weren’t able to attend our Summer Seminar a few weeks ago. We had a nice round “enrollment” of 100, minus a few colleagues who were stranded by the floods in Iowa. Our Seminar co-sponsors, The Lawlor Group, will be publishing the full proceedings this fall. That will provide you with the complete Who, What, Where, and When.

In the interim, I wanted to share some top-of-my-mind take-aways:

• Dan Sullivan, retiring (June 2009) president of St. Lawrence University, used a biology analogy to illustrate how appropriate liberal arts colleges are to the educational, career preparation, and civic leadership needs of the 21st century, and to affirm our greater efficiency (cost per degree).
  
  In describing how liberal arts colleges produce science and math graduates at a lower average cost than the public flagships, he said: “Some species lay many eggs and leave them to fend for themselves, while other have few young and tend them intensively.” He forecast that we will see the most elite colleges and universities head toward negative tuition—like the grad school model—and that as a result, poorly-endowed schools will cost the most and well-endowed schools will cost the least, or even pay students to attend.

• I had originally invited Sarah Flanagan, vice president for government relations and policy for NAICU, to talk about what an Obama or McCain administration would mean for higher education. She had said she could cover that in less than 10 minutes, since unfortunately neither candidate has an HE agenda to speak of. At the outset of her talk, she said she had overstated the time it would take and that she could cover that topic in 10 seconds.
  
  Instead, she pounded home that colleges are “losing the white hat” in Congress and among citizens in general. Don’t underestimate Congress: They understand net price and know that the middle- and upper-income groups are getting more grant aid, on average, than low-income families. Get ready for: massive new reporting requirements and new federal pressure on tuition increases. The next target for Congress: private loans.

• Chris Farrell, economics editor for Marketplace Money on American Public Media, has seen the one-third of questions from listeners that were about credit card debt shift to questions about student loans. (The balance of questions continues to be about retirement and home ownership.)
  
  Chris predicted that we are in a period of recessionary pressures and cost-push inflation, and that credit markets and the housing market are going to take at least another year to get back on track.

• Chris interviewed Jamie Wolfe, chief financial officer at Total Higher Education, the investment branch of the nonprofit student lender Northstar.
  
  Jamie got everyone’s attention when he scrawled across the white board “LIBOR + 6” which was the rate Northstar borrowed at in May 2007. He kept on writing numbers that peaked at “LIBOR + 165” in April of 2008. “Lenders may not have dropped out of the [FFEL] program outright,” he said, “but many of them have stayed in just to keep a place warm on the list. H.R. 5715 is full of holes—statements like, ‘more than likely,’ and ‘fairly confident’.”
  
  Jamie predicted that 39% of borrowers who would have been approved last year will not be this year, and that those who are approved will be faced with interest rates around 3% higher than last year. Some opportunistic lenders will enter the arena, but their intention will be to market credit cards and other, more lucrative products to students.
  
  Eighty-five percent of student loans were securitized, but the larger and longer-term problem is that $160 billion in home equity loans were securitized, and parent-borrowers used perhaps $4 billion of that to fund their kids’ college costs. The home equity door has virtually slammed shut now, and because many of these were riskier compared with student loans, the home equity pipeline isn’t likely to reopen any time soon. No one should exhale yet.

• Nathan Mueller, who struggled to recover from my introduction of him as “the Lutheran’s Jeremiah Wright”, presented the results of a financial aid/price modeling challenge I had posed to illustrate how the Harvard “middle-income initiative” would decimate most any real-life private liberal arts college. That was a no-brainer for most in attendance.
  
  However, Nathan went on to show that an income-driven pricing model COULD increase consideration of that same real-life college while producing better net revenue, greater profile, and stronger overall enrollment—with a distribution of discounts that came very close to meeting need at the same levels as in a regime combining merit- and need-based awards.
  
  My thought has been that Harvard has made it acceptable to set price based on income and that the market will come to expect that colleges offer a price much earlier. While no one knows what the needs analysis will tell them, they do know what their last 1040 told them.

“May you live in interesting times” is a curse popularly attributed to the Chinese. As always, please contact me if you wish to discuss your college’s interesting times and how Hardwick~Day might help make them less so.

Regards, and have an independent Fourth of July weekend.

Jim