Facing cuts in state funding and fewer traditional students available to recruit, many universities are turning to alternative sources of revenue.
Writing for Education Dive, Linda Jackson rounds up five ways colleges are increasing their bottom line.
1. Leverage partnership opportunities
While universities have long run businesses, some colleges are partnering with nonprofits and the private sector to advance their mission while bringing in new revenue. These partnerships serve a double purpose of giving students career experience while shoring up the budget, Jackson writes.
For example, Denver's Metropolitan State University (MSU) partnered with Sage Hospitality to open a SpringHill Suites on its campus. According to MSU Denver President Stephen Jordan, the hotel's performance has generated $2 million in revenue, which will be split between funding university scholarships and improving the hospitality program.
2. Take advantage of the local industry
According to Jackson, filling a need within local industries is a natural place for universities to bring in additional funds. California State University, Northridge (CSUN) decided to increase revenue by opening their campus to TV, film, and commercial shoots. According to Rick Evans, executive director of The University Corporation, CSUN's film-friendly campus will bring in more than $1.25 million in revenue this year.
How two universities identified hidden employer partners on campus
3. Target non-traditional students
EAB's executive director, Melanie Ho, recommends that colleges create flexible routes for nontraditional students. By expanding virtual courses and degree programs, universities can "serve new populations in different ways," Ho says. For example, Jackson writes that Brown University established a master's degree program in biology for Pfizer employees.
4. Focus on retention
In addition to serving students beyond campus boundaries, Jackson notes that "keeping students from dropping out in the first place" is a critical piece of the revenue puzzle. After Middle Tennessee State University partnered with EAB to predict which students needed more support, the college was able to retain an additional 390 students through the spring semester, which resulted in $1.5 million in revenue, writes Jackson.
5. Create an open culture
For a university to have a successful industry partnership, the institution must cultivate an open culture that welcomes industry experience. To build this culture, MSU Denver President Jordon recommends that universities recruit higher education leaders with private sector experience.
Yet colleges must be careful about choosing their partnerships, says Tom Harnisch, director at the American Association of State Colleges and Universities. He advises administrators to consider the primary customers for their product or services. Jackson writes that if the primary customer is largely students or their parents, these business endeavors might run the risk of appearing to indirectly raise tuition (Jackson, Education Dive, 7/17).
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