Introduction

In the coming decade a number of states and public higher education systems will encounter enrollment demand that far exceeds their enrollment capacity.  One option for accommodating this growth is to convert to a year-round operation (YRO) calendar, in which the addition of a fully enrolled extra/summer term may allow a campus to accommodate many more students without increasing its size, and thus forego the need for costly plant expansion.  Close examination of the history of both YRO analysis and YRO institutional experience reveals that neither is sufficient to resolve the financial feasibility of YRO.  More specifically, a comprehensive financial model that allows one to compare the costs of a YRO system with those of a traditional academic year (AY) system does not exist.

A Research Agenda

In order to address this, a financial model capable of comparing the costs of operating a campus year-round with the costs of operating a campus on the traditional AY calendar, where both campuses are experiencing the same high rate of enrollment growth, was developed.  All pertinent institutional variables, including those for faculty costs, non-faculty operating costs, capital costs, and student enrollment were identified and quantified.  Eight variables whose values were either uncertain or readily subject to manipulation by an institution were identified as “key variables,” and a broad range of values was used for each of these in order to ensure that all conceivable scenarios were considered.  A financial model was constructed that integrates all of these variables (both “key,” and otherwise, known as “fixed”) and produces cost outcomes for both the AY and YRO operating systems.  The primary output of the model is the difference between AY system costs and YRO system costs at the end of a 10-year enrollment growth period (from 10,000 FTE students to roughly 20,000 FTE students).  This cost outcome was determined for every value combination (or “scenario”) of the eight key variables, resulting in 7,776 outcomes.

Findings

The results show that the vast majority of scenarios favor YRO.  Specifically, 98% of all scenarios result in the YRO system costing less than the AY system, and 95% of the scenarios result in the YRO system saving $50M or more over 10 years.  If the view of the results is narrowed somewhat, it is also seen that a “Reasonable” scenario, in which some key variables are compromised a bit from AY standards, is also favorable to YRO -- and small changes to this scenario also result in favorable YRO outcomes.  However, when a stricter “Quality” standard is applied, in which all key variables are set to maximize “educational quality” in the YRO summer term (e.g., maintaining AY-equivalent faculty/student ratios), YRO is more costly than AY – though some small changes to this scenario can result in favorable YRO outcomes.  A focused consideration of all scenarios intermediate between the “Reasonable” and “Quality” scenarios (48 scenarios in all) results in favorable YRO outcomes in two-thirds of the cases, and un-favorable YRO outcomes in the other third.

Conclusions

In summary, there are many plausible and reasonably “defensible” scenarios in which the adoption of a YRO system can save significant sums of money (at least $50M for a mid-sized campus over 10 years).  Whether these various scenarios could be implemented, however, depends on a number of separate determinations, including the resolution of a number of issues concerning the key variables, and anticipating the choices that institutions would likely make concerning the nature of the YRO summer term.  More specifically, values for some of the key variables that are not subject to benchmarking are simply unknown, and more research may be required to resolve them.  There is also, arguably, uncertainty as to whether or not one form of key variable, “contested summer costs,” should be included in the model at all.  And perhaps most importantly, there is the issue of institutional choice -- specifically, the degree of quality “compromise” that an institution deems permissible for the YRO summer term.