Outsourcing is growing at most campuses, college leaders say
- The large majority (83%) of college leaders said their campuses are increasing partnerships with private firms, according to a survey of 249 college presidents, provosts and chief financial officers from The Chronicle of Higher Education and the P3-Edu conference.
- The majority of leaders (53%) said they were interested in turning to public-private partnerships (P3s) to develop campus facilities and infrastructure. Other leaders saw an opportunity to outsource online program expansion (42%), student housing (39%) and predictive analytics (31%). Fewer than a quarter said they're interested in finding a partner for student support services such as mentoring and career counseling.
- Two-thirds of respondents said they're interested in or have found a partner for their unique capabilities, while roughly half said they look to outside firms for their investment capital (52%) and their ability to bring a project to market quickly (44%).
The survey highlights the growing importance of outsourcing for colleges and universities, especially in a period of wavering enrollment and budget crunches.
Top-notch facilities can be helpful in drawing top faculty and students to a campus. But given many colleges' current financial constraints, some are increasingly looking to outside partnerships for their construction and maintenance needs.
The University of California, Merced, for example, turned to a public-private partnership for a $1.3 billion project to expand its campus that will make room for up to 6,000 more students. The university's partner, Plenary Properties Merced, is investing about $590 million, while $600 million is coming from the University of California System.
Rising enrollment levels at some flagship and selective universities, particularly on the coasts and the Southeast and Southwest, have also created a shortage in housing.
One solution has been an increase in P3 arrangements to build more student housing near campus. Colleges have handed over the task of designing and constructing student housing for years as a way to offer nicer amenities that would have been to expensive for them to manage on their own, The New York Times reported.
Increased competition for students has also caused colleges to look for partners for tasks beyond construction of new facilities.
"Perhaps with the exception of the handful of universities that are buffered by endowments over $1 billion, most US colleges and universities face intense financial pressures and fundamental challenges to their business models," write the authors of a recent P3-Edu report. "Given this context, today's universities are more open to partnering with the private sector, in ways that may have been unimaginable just a decade ago.
Nearly half of the surveyed college leaders are interested in a partner to expand their colleges' online reach.
The market for online program managers (OPMs) is growing. Roughly one-third of the some 1,460 nonprofit colleges that have some students taking online-only classes partner with an OPM to do so, according to data from Tyton Partners. Programs run by OPMs tend to report more enrollment growth, though the gains are slowing as competition increases.
Several large state systems have recently indicated their desire to make big moves in the online space. The State University of New York issued a request for information for how it could grow its online footprint both within and beyond New York State. And the University of Massachusetts announced earlier this month that it was launching a national online college to stave off enrollment declines.