As expected, every college and university finds a unique solution because their circumstances differ slightly from one another. While a few have endowment support to move beyond their reliance on tuition, most are heavily tuition dependent.
Further, only a few of them can point to substantial revenue growth elsewhere. In addition, a good number of them are using graduate and continuing education programs, restructured debt, fully depreciated dorms and occasional accounting tricks to produce a clean audit.
Yet a clean audit does not suggest a healthy and robust institution. In fact, an audit is treated at best as a “point in time” measure of health and stability. If the college or university has a metrics dashboard that looks at how it performs over time against national trends, this outlook may be far more sobering for the institution even if the audit is without findings.
For these institutions that represent most of American higher education, there are two clear choices. The first is to “kick the can down the road” to maintain the financing approaches of pre-recession America. The second is to develop dashboard metrics and a strategic plan to address what the metrics show and make the changes necessary.
It’s easy to spot those institutions that are hiding their heads in the sand. Look for certain obvious indicators — an institution that is moving beyond its bandwidth exceeding a sticker price above inflation for next year that is not supported by growing admissions, rising net tuition revenue, a defined academic program that supports a clear “value proposition” and strategic investments that demonstrate an understanding of their place in the higher education market.
It’s not a question so much anymore of whether these institutions are moving past their peer group toward their aspirant schools. The question is more these days about whether a college understands where it is, what people think of it and in this context, whether the potential market includes enough applicants to support their share of it.
