Nearly one in five college and university chief business officers are worried their institutions are at risk of shutting down in the foreseeable future, and skepticism over the financial model of their institutions continues from last year, according to a survey by Inside Higher Ed and Gallup.
But are institutions doing enough to navigate an era of financial difficulty?
The 2015 Survey of College and University Business Officers, Inside Higher Ed and Gallup's fifth such study, reveals that as institutions deal with financial concerns, they are using some strategies, like increasing enrollment, more widely than more unpopular methods of trimming the budget. And that’s not necessarily to the benefit of struggling colleges, analysts interviewed for this article say.
In the survey, 64 percent of business officers this year strongly agreed or agreed that their financial model is sustainable over the next five years, compared to 62 percent last year. That confidence drops to 42 percent over 10 years, roughly similar to last year’s response of 40 percent.
About the Survey
Inside Higher Ed's 2015 Survey of College and University Business Officers was conducted in conjunction with researchers from Gallup. Inside Higher Ed regularly surveys key higher ed professionals on a range of topics.
On Thursday, Aug. 13, at 2 p.m. EDT, Inside Higher Ed editors will analyze the survey's findings and answer readers' questions in a free webinar. To register, please click here.
The Inside Higher Ed survey of business officers was made possible in part by advertising from Axiom, Jenzabar and Workday.
More institutions are moving toward cost-saving measures like shared services, an approach that centralizes administrative services formerly scattered across departments and schools: 43 percent reported their institutions use some type of shared services and another 23 percent said their institutions were considering adopting a shared services model.
The vast majority of CFOs said their institutions have placed a primary emphasis over the past five years on increasing enrollment (88 percent) and net tuition revenue (74 percent).
Fewer have increased their focus on measures like the cost of providing health care (67 percent) and retirement benefits (50 percent), the profitability of their academic programs (65 percent), the return on endowment investments (52 percent), the cost of athletic programs (52 percent), and increasing the faculty teaching load (44 percent).
Yet higher education analysts and experts say colleges will have to look beyond enrollment increases if they plan to solve deep-rooted financial issues in the sector.
“All of the signals are that this is a sector that is in trouble,” said Jane Wellman, a higher education finance expert with the College Futures Foundation. “Yet the kind of things that would better position institutions for the long haul probably aren’t happening. They’re still at the edges, and solving this more symptomatically than strategically.”
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