Around 71% of chief business officers agree that higher education is in the midst of a financial crisis, according to a new survey.
Inside Higher Education's seventh annual Survey of College and University Business Officers, conducted by Gallup, comprised answers from 407 CBOs at private and public institutions. Among the respondents were 217 public universities, 184 private universities, and 8 for-profit universities. To produce representative results for the nation, researchers statistically weighted findings based on "public or private status, four-year or two-year degree offerings, student enrollment and geographical region," reports Inside Higher Ed.
According to the survey, almost three-quarters of respondents said media suggestions of a financial crisis accurately reflect the industry's situation. Officers at private institutions were more likely to agree, with 74% saying media reports were accurate compared with 68% of CBOs at public institutions.
In line with the industry's "less optimistic" future, the portion of officers who believe their own institution will be financial stable in the coming decade also dropped significantly, notes Inside Higher Ed. The survey found 56% of respondents agreed their institution will be financially stable over the next five years, which is down 8 percentage points from last year's survey. Similarly, only 48% agreed their institutions will be financial stable across the next decade, down 6 percentage points from last year.
See last year's survey results
To tackle the financial crisis, almost two-thirds of the respondents, 64%, agree that new spending will have to come from reallocating money rather than increasing net revenue, reports Inside Higher Ed. To bring in more money, just over 7 in 10 respondents will seek to increase overall enrollment. While respondents are still interested in raising more revenue through enrollment, the number of CBOs turning to enrollment has dropped 16 percentage points since the 2016 survey.
Lucie Lapovsky, a higher education financial and governance consultant, attributes this steep decline to the "reality that the students aren't there, and universities are just not getting the growth." The difficulty in "resizing an institution" will lead many universities to cut back on expenses, says Lopovsky.
With declines in enrollment and projections of fewer traditional students, respondents showed increasing interest in strategies to cut spending, reports Inside Higher Ed. According to the survey, half of officers will eliminate underperforming academic programs in the coming year, 31% will promote early retirement for staff, and 44% will reduce administrative positions (Lederman/Seltzer, Inside Higher Ed, 7/31).
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