COLUMN: The decision dilemma for universities

With the number of students attending colleges and universities declining in some areas of the country and leveling out in other areas, many universities will be faced with some tough decisions in coming years.  Federal and state funding programs will likely struggle to maintain current levels of support with continued budgetary issues not being resolved on many levels.  Couple these two revenue concerns with the higher costs of attracting key personnel and continued operating cost increases, many universities find themselves in a serious budgetary situation.

Universities will find themselves competing more than ever for students to drive revenue.  They will also find themselves competing for faculty, administrators, and other key personnel while trying to balance a very tight budget.  Many universities are already experiencing significant budgetary issues, and it will likely only get worse.

Many universities are attempting to expand the virtual classroom to attract students and drive revenue in a lower cost learning environment.  These virtual offerings will be helpful but won’t be a major answer to the problem as there will be limitations on these programs.  Accreditation services and employers see the benefit of instructor led in-person educational offerings and will expect that approach as a primary teaching/learning approach to key curriculum.

The universities that will be faced with the challenge first are the ones with annual enrollments of around 15,000 or less.  The larger universities will be able to weather the storm longer with larger endowment programs and larger general alumni support (much like we are seeing with intercollegiate athletics).  

So, the smaller universities will be faced with two choices.  They can seek to expand programs, attract as many students as possible, and grow direct revenue.  The key is to grow “paying” students and not scholarship-based growth.  The focus is to grow revenue.  This growth will be a competition-based growth as there will be a finite number of students in the “marketplace” for universities and as previously mentioned, this number is not growing in many parts of the country (Louisiana actually has a decline year over year).

The second option for universities is to evaluate the degree programs offered and refine the offering to those that generate enough revenue (student numbers) to cover the cost of operating the degree program.  It would require a tedious look into the specific revenue and costs of operating each program on the campus and moving forward with a smaller, but more financially sound university offering.  It might encompass universities operating in a geographical region to coordinate a move back to more specialized areas of focus (most started with specialty areas of focus years ago).  Many in industry made similar type moves over the last ten years narrowing their focus to core businesses and downsizing to be more profitable.  

It will be interesting to see how those leading local universities address these challenges in coming years.  We want the best for our students and our communities.  The two universities in Lincoln Parish mean a great deal to the area and those across the state are vital to their respective communities as well. Regardless of the choice, I’m pulling for those making the tough decisions to be successful in leading their respective universities!