Survey: College business officers are increasingly concerned about financial stability
The interweaving challenges of shrinking state budgets, reduced enrollment and lower tuition revenue have led to a decidedly dimmer view on the financial stability of institutions by those who manage the business offices.
Inside Higher Ed recently questioned more than 400 chief business officers from public, private and for-profit higher ed institutions for its 2017 Survey of College and University Business Officers. The survey tracked the perspectives of these administrators on issues when compared to the year before. According to the survey, 71% of chief business officers indicated that they agreed with an assessment that higher ed institutions were facing financial turmoil, an 8% jump from the year prior. This view was widely shared between public and private institutions.
The survey also worked to affirm and dispel conventional understandings of how college business administrators perceive the financial straits the industry faces, and identify possible ways to respond. While about 71% of respondents said their institutions would work to boost enrollment, this was a 16% drop from the year before. Also, though there has been increased talk about institutions merging or consolidating, overwhelming majorities of public and private chief business officers indicated these options were not likely in the immediate future, though some respondents did indicate partial mergers of back-end staff, including IT staff and services, could be beneficial.
Some respondents reported that it may be difficult to maintain the amount of higher ed institutions due to declining enrollment that may stem from a declining pool of potential applicants. Some regions like the Northeast and Midwest are looking to boost their enrollment with international applicants because the numbers of in-state and regional students may not support the supply. The 2028 graduating high school class in the Northeast will be 10% lower than in 2009, the Washington Post reported, while the Midwest expects starker decreases. These regions contain a large number of the higher ed institutions in the country, which might make mergers and consolidations more possible in years to come. Matt Hamill, a senior vice president for Advocacy, Research, and Communications for the National Association of College and University Business Officers, said mergers might sound appealing but could be unerringly complex.
"An effective merger requires a combination of aligned missions, structures, and histories of two institutions that concurrently must have complementary strengths and disparate weaknesses in order to successfully buoy one other," he said. "When you add in the fact that they also need to be located in the same general area, it's a challenging recipe for success that only a minority of institutions have found worthwhile."
There was also a broad agreement on the importance of investing in efforts to maintain high retention rates among students, with 86% of chief business officers believing the efforts would help to ensure more financial stability for their institutions. 83% of the chief business officers indicating they had invested in pathways for students to follow to ensure they were working towards specific degrees, while 78% said their schools investing in academic coaching and 74% reported that they invested in teacher training efforts, all in order to try and retain students throughout the entire tenure of their postsecondary education.
College administrators are continuing to seek ways to keep enrollment steady, even though the percentages of institutions seeking to boost their enrollment declined in the past year, according to the survey. Many schools are investing in alternative credentialing or apprenticeship programs, spurred by bipartisan approval among policymakers and the realization that it may be a way to reach potential student populations who have not filled the gap in enrollment drops. Some schools, like the University of Maryland, are seeking to empower students in solving retention issues, while others seek to boost online learning opportunities for students who may not be willing to physically attend.
However, in an Education Dive interview last year, Alison Kadlec, a senior vice president and director of Higher Education & Workforce Programs for Public Agenda, said the biggest challenges to retention and student trust in higher ed institutions may require a holistic reassessment of how a school intends to educate and credential students.
“There’s a tremendous range of modern credentials that aren’t captured in public assumptions about college. We have not yet, as a country, had a sophisticated conversation about what 21st century credentials looks like," she said. "We continue to fall into the idea of two kinds of education: education for work and education for life. The fact is that employers in the 21st century don’t think that distinction holds up.”
- Inside Higher Ed The Rose-Colored Glasses Come Off: A Survey of Business Officers