College athletics is an integral part of the higher education landscape—particularly at the Division I level, where athletic success at large, mostly public, universities has been associated with an increase in applicants and lucrative television deals. At Division III schools with less name recognition, sports teams receive little fanfare beyond their campuses. But school officials increasingly see athletics as a key to survival.
In recent years, four-year, private colleges—many of which are Division III schools—have seen some of the steepest drops in enrollment, particularly those with fewer than 5,000 undergraduates. Because private schools typically receive little if any state funding, their operating budgets are largely dependent on tuition revenue, meaning any sustained decline in enrollment can prove fatal.
Traditional efforts to address dwindling enrollments, such as adding recruiters, adopting early admissions, or freezing tuition, have had mixed results, which has led some small private schools to try increasing their investments in athletics instead.
How athletics can increase revenues at Division III schools
Unlike Division I schools, Division III schools do not offer athletic scholarships (although athletes, similar to nonathletes, may be eligible for other types of financial aid or tuition discounts). As such, student-athletes at small private schools are often full-pay students, which makes athletic recruiting efforts more lucrative.
But it’s not enough to simply enroll student-athletes; the financial health of these schools depends on retaining as many students paying full tuition as possible. At the Division III level, student-athletes have been shown to have higher first-year retention rates and higher graduation rates than nonathletes, which may explain why athletes make up a larger share of the student body at Division III schools (21 percent) than at Division I schools (6 percent).
Given that Division III schools generally enroll more tuition paying athletes that have also been shown to have higher retention and graduation rates, it makes sense that they would bet big on bolstering their enrollments by investing in their athletic programs despite the potential financial risks.
Two ways Division III schools are investing in athletics
Division III schools have invested in their athletics programs in two primary ways. First, schools have added popular new sports that do not require building new facilities to attract new students and generate revenue. Fairleigh Dickinson University, which competes at both the Division I and Division III levels, added men’s volleyball and women’s lacrosse for potential revenue increases of $120,000 and $100,000 per year, respectively. More dramatically, Adrian College has added more than 30 new sports teams since 2005 and has more than doubled its enrollment.
Second, Division III schools have hired more full-time head coaches. Historically, Division III schools have operated like high schools, with sports teams commonly coached on a part-time basis by faculty. However, the growing importance of sports to the financial health of Division III schools and the increasing competition for athletes have resulted in many colleges “professionalizing” their operations. By investing in full-time coaches, schools can allow coaches to focus on recruiting more student-athletes rather than planning the syllabus for their next class.
Using Urban’s Education Data Explorer, we looked at the 325 Division III schools with data for 2005 and 2020 to see whether schools that increased the number of athletic programs offered or the number of full-time coaches employed saw larger increases in enrollments than schools that did not. Our analysis found that about two-thirds of schools added at least one varsity sport, increased the number of full-time head coaches, or both.
Among these two-thirds of schools that increased their investment in their athletic programs, 45 percent saw enrollment increases. Conversely, 38 percent of schools did not add any varsity sports or full-time head coaches, and 52 percent of these schools saw enrollment increase. These data suggest that despite the majority of Division III schools investing more in athletics in some way, schools that did not invest more were more likely to see enrollment increase.
To further explore this relationship, we examined the correlations between changes in enrollment and changes in the number of varsity sports or full-time head coaches. Because any change in enrollment would likely lag behind any investment in athletics, we explored correlations one year, two years, three years, and five years out from the change. Our analysis of correlations confirms what we found by comparing the shares of schools that invested or did not invest in athletics: adding sports or full-time head coaches has little relationship with changes in enrollment.
Investments in Athletics Have Little Correlation with Changes in Enrollment
|Increase in enrollment after one year
|Increase in enrollment after two years
|Increase in enrollment after three years
|Increase in enrollment after five years
|Increase in share of head coaches who are full time
|Increase in number of varsity sports offered
Notes: The correlations are calculated between changes in the share of head coaches who are full time or changes in the number of varsity sports offered and the changes in enrollment one, two, three, and five years after the base year. The base year is the year where the change in the share of head coaches who are full time or the change in the number of varsity sports offered occurred.
Investing in athletics is not a silver bullet for boosting enrollment
Although the existing research shows that sports play an important role in the financial stability of Division III schools, our analysis suggests there is little statistical relationship between adding more sports or full-time coaches and changes in enrollment. Most likely, any effects on enrollment are diminished because schools are trying multiple approaches beyond investing in their athletic programs, such as lowering tuition, increasing student aid, or adding new academic programs.
Ultimately, these findings indicate that investing in athletics is not a silver bullet for small, private colleges looking to boost enrollment, though it’s clear that athletes and athletics are important to the survival of many Division III schools.
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