I believe it may be time to retire the age-old metric of Full-time Equivalent (FTE) in theological education. It may have served us well in the past, but I do not believe it can serve us well in the future. The gap between FTE and headcount, the “part-time-ization” of theological education, and the subjective nature of the measurement simply will not help institutions as they plan for the future needs of their students and prepare for the disruptive innovation that is heading our way. Many schools have already said goodbye to this metric – maybe we can persuade a few more.
The implications of this are widespread because most state, federal, and accrediting agencies require it for reporting purposes. I don’t think that is going to change anytime soon, so let’s focus on our own institutions. Why is FTE a poor metric? What are its inherent issues? Is there a better way? Let’s see if we can find one.
Since 2005, headcount enrollment (HC) in ATS schools has been declining by about 1.5% each year. We saw a slight increase in fall 2012, but that is primarily related to the face that a number of new schools joined ATS. Based on data from ATS, we can see that on average it takes about 1.4 students to equal 1 FTE student. Obviously, that is impacted by the type of school. In Mainline Protestant and Roman Catholic schools it averages around 1.4 HC to equal 1 FTE. However, in Evangelical Protestant schools it takes roughly 1.8 HC to equal 1 FTE. In addition, we should note that the gap is widening. This is part of what I refer to as the “part-time-ization” of theological education. Even in schools which have been predominantly filled with full-time students we are seeing a shift toward more and more part-time students. What does this mean?
For starters, it means that FTE is not a good metric to use when it comes to institutional planning, organizational and curriculum design, or budgeting. A school must pay attention to headcount because that is the number of students it has to touch. That is the number of students that interact with student services, student accounts, admissions processes, advising processes, campus facilities, courses, online resources, etc. If we build a budget based on an FTE model, we will continue to see our expenditures per FTE student rise. I would argue that our expenditures per FTE student are already at an unsustainable level, so seeing them rise even more is not a good thing! The bottom line is that we serving more students on a stagnant revenue levels. We can’t plan using FTE because the gap between FTE and HC is widening.
The Part-time-ization of Theological Education
The “part-time-ization” of theological education is the reason we are seeing the widening gap between FTE and HC. In a recent study which involved nine Evangelical Protestant schools, we found a few interesting things. First, HC and credit hours taken on “main” campuses were both down over five years. Over the past five years HC has increased at satellite campuses. Neither of those were surprising trends. However, the actual numbers were surprising. HC is up by 21% at the satellite sites, BUT the total number of credit hours taken at satellite campuses is down by more than it is on main campuses! It is a simple fact that students are taking fewer courses.
Some of the most interesting conversations I have had over the past year have been with administrators from Roman Catholic schools. Many (not all) are struggling with a student base that, for the first time, isn’t comprised of full-time students. Many students are lay leaders and are seeking theological education to support them in their ministry but have no interest or desire to be full-time students.
At Northern, we are working with a student population that sees ministry and theological education as something that needs to fit into the rhythm of life. Neither ministry nor seminary is meant to be a full-time endeavor in the minds of many of our students. As a school focused on being missional in our approach to ministry and education, we are comprised primarily of part-time students. This has been the case for many years. As a result, we dropped FTE as an indicator more than five years ago.
I believe very few institutions, if any, will be exempt from the fact that part-time students will be the norm. Therefore, FTE will cease to be a relevant metric when it comes to institutional planning. However, as schools reengineer theological education and create both new curriculums and new organizational designs, we may have to revisit what it means to be a part-time student. What if a student could graduate with an MDiv in three years while only having to take one class at a time? (that is for another post!).
FTE is Subjective
Schools calculate FTE on a workload definition that isn’t standard across the “industry” and sometimes isn’t standard within individual institutions. FTE is a subjective measurement based upon what a school decides is the workload for a full-time student. Is that 3 courses per term? Four courses? 2 courses that are part of a cohort? Is the coursework supposed to be finished in 3 years? 2 years? 4 years? The fastest way to increase FTE is to change the definition of a full-time student. This is neither right nor wrong – it is simply a fact. Some schools have changed their curriculum so that every student is considered a full-time student. I put FTE and gross tuition revenue into the “I can make them whatever you want” categories. If we want to increase gross tuition revenue, we can do so quite simply. Net tuition is hard to change, not gross tuition and net tuition drives the budget. Likewise, if we need to change FTE, that can be done relatively easily. However, headcount and total hours are what impact institutional planning and revenue, not FTE.
When doing curriculum or organizational design, strategic planning, budgeting, or institutional evaluation, I believe it is dangerous to use anything that is or can be subjective. FTE isn’t a concrete number. It is based on curriculum and graduation expectations. As we move more deeply into the part-time-ization of theological education we will see more and more students who aren’t necessarily interested in graduating, that isn’t why they are coming to seminary. While one could argue it can be concrete at a given institution for a specific period of time, it is nonetheless something that can be changed therefore making it a dangerous metric.
In addition, its subjective nature makes it a difficult number to use when comparing schools. If two schools have an FTE of 150, does that make them similar schools? What if one school has a headcount of 300 and the other has a headcount of 200? While they have similar FTE numbers, one school is serving 100 more students which means it is a very different school. What if one school expects full-time students to take four courses per semester while the other school expects three courses per quarter? The curriculum, faculty requirements, and revenue streams are going to look much different. Because of the subjective nature of FTE, these two schools with similar FTE numbers really don’t have a lot in common.
It is easy to point out the issues with something. If FTE is declining in value as a metric, what might I suggest as an alternative? Let’s look at that next week. If you have thoughts or want to disagree with me, please post something in the comments below. Together I think we might be able to come up with something quite good.