From the pandemic to increases in inflation, colleges and universities are finding themselves in unique financial situations as they look to the future. While some schools believe they’re on solid financial footing, others have struggled with budgets, resources and enrollment.
The new “2022 Survey of College and University Business Officers” report by Inside Higher Ed shines light on what college and universities can do now to prepare for the potentially turbulent financial future ahead.
- Roughly two-thirds of Chief Business Officers (CBOs) believe their institution is in a stronger financial position than it was in 2019 – largely thanks to significant funding from the American Rescue Plan.
- More than 75 percent of CBOs report that their institution achieved a positive operating margin in the previous fiscal year, and more than half report that their institution will likely achieve a positive operating margin for the current fiscal year.
- CBOs are split on whether their campus will be in a worse position a year from now, though. As rescue funds run out and the economy faces inflationary pressures, schools are unsure the best way to make up for gaps in revenues.
- 64 percent of CBOs estimate that their revenues have already decreased over the past two years as they’ve seen lower enrollment rates and a loss of tuition income.
- Despite these financial uncertainties, 70% of respondents were optimistic that their institutions will be financially stable for the next five years – and many thought they would be fine at the ten-year mark.
Is it time to do things differently?
The falloff of funding from the American Rescue Plan, coupled with lower enrollment rates and revenues, means institutions need to find ways to make up for lower revenues. While higher endowments may help schools survive in the short term, long-term changes may be necessary to draw in more students and increase income.
Thankfully, many schools already have the right data to make decisions on business processes and academic programs and to reallocate resources to meet the needs of tomorrow and beyond. Two-thirds of respondents viewed the current economic landscape as a positive opportunity to make much-needed institutional changes from both a business office and academic perspective.
See the Full Picture
Download the full survey for additional insights into the business of higher education and what other institutions are doing to prepare for the road ahead.