- Colleges and universities have to think differently about ways to balance budgets, looking at real costs of their offerings while examining efficiencies that have not previously been explored. There are ways to reduce expenses but not quality, said Rick Staisloff, a former university chief financial officer and finance policy analyst for the Maryland's higher education commission to the Chronicle of Higher Education.
- He explained often institutions have no idea whether they make or lose money on a program, whether a course is legitimately in demand or how productive faculty members are. Several higher education experts also have said that colleges should undertake new programs carefully.
- Staisloff noted that in his experience universities may not know they are offering a variety of sections of a course, for instance, that go unfilled. And often despite the availability of sophisticated software, it is underutilized and administrative tasks are handled in inefficient ways.
At a time when states are strapped for money to support all their responsibilities, higher education leaders will have to continue to look for alternative sources of revenue, otherwise the impact cut fall on the shoulders of students. A recent study by the Economics of Education Review, showed that every $1,000 cut in per-student state and local funding means the average student has to pay $257 more annually in tuition and fees if institution can only find the revenue there.
Consequently, it's key especially at a time of rising tuition costs, institutions figure out how to approach their models more efficiently. For example, new University of Oklahoma President Jim Gallogly cut six top staffers on his first day to reduce costs and "bring a fresh perspective." The University had been losing $36 million a year, and some thought its administrative staff was top-heavy and that Galloghly's cuts made it comparable to other institutions.
New Mexico State University chancellor Garrey Carruthers took a similar approach. He told Education Dive that he hired consultants to look where there was institutional bloat and ended up eliminating 750 to 800 jobs, saving the institution about $10 million dollars. But even such steps have to be taken with institutional mission in mind, Carthage College president John Swallow told Education Dive when he visited the office this week.
"We have the flexibility, but that doesn't mean we need to innovate rapidly," said Swallow. "We're going to be thinking about what new programs we should start. But first, we're going to do the work this year to figure out what that would mean for our fiscal plans. How do we use our facilities more efficiently if we were to build something new?"