Dive Brief:
- Drew University President MaryAnn Baenninger made the choice to issue the first faculty and staff raises in five years, increase financial aid spending, hire "an enrollment guru," and renovate some campus facilities — while facing a previous-year budget deficit as she took the helm of the school in 2014.
- Inside Higher Ed reports on the moves, intended to help boost enrollment and campus morale, which have resulted in a Moody's downgrade — the second in 15 months.
- Baenninger acknowledges the university must find a way to make cuts to close the operating deficit, but said she'd also like to invest in academic programs and find new ways to entice more students to campus.
Dive Insight:
The conundrum facing Baenninger and Drew's leadership is one with which many institution leaders struggle. In a climate in which public funding for higher education is down and competition for students is up — extending now even to international universities — colleges and universities are faced with a balancing act over the bottom line. As the old adage goes: You have to spend money to make money, but for many institutions, the coffers from which they can spend are getting lower and lower, and tuition discounting rates are going higher and higher.
Two years ago, Moody's projected the number of colleges and universities closing would triple by this year, and the industry is on no more solid footing than it was in 2015, as state and federal support remains low in most places. Georgia is laying out a road map for aggressive system consolidation, and many states are paying attention.
But overall, it is likely that most institutions will remain in tact, at least for the foreseeable future. Institutions like the University of Dayton and those in the North Dakota University System are laying out 20-year plans. And Lumina Foundation CEO Jamie Merisotis generated lots of "Amens" and agreement with his statement at a recent Atlantic Live event: "I've spent 30 years of my life talking about higher education at a crossroads. This is the slowest-developing train wreck ever," he said.
With that said, there must be changes made at the institutional level as well as industry-wide to ensure the sustainability of higher education. Partnerships with industry, increased town-gown cooperation, and the ability to cultivate private philanthropists into recurrent donors are critical to the future of the enterprise. But so is the ability to promote innovation on campus and to find new revenue streams, either through creative real estate investments and portfolio diversification or finding corporate backers of educational programs.