Mythbuster alert: small, private colleges and universities are remarkably resilient and show considerable financial stability and growth, according to a new report.
The Council of Independent Colleges (CIC), with support from the TIAA Institute, produced the report. The data comes from 14 years of benchmarking reports prepared for CIC members from 559 private colleges and universities, and it reveals that 88 percent of small private institutions maintained or improved their financial standing–an impressive accomplishment, considering the 14-year period includes the 2007-2009 recession.
Some institutions have experienced a roller coaster-like pattern of financial ups and downs, but most have shown significant improvement when it comes to financial indicators used to gather data.
Data indicates that “most of these institutions were financially stable before the 2007-2009 recession and have rebounded since,” according to the report. “In fact, 67 percent of the colleges and universities in the sample are at or above the threshold of financial viability in the most recent year analyzed.”
(Next page: Strategies for maintaining financial stability)
“Many private colleges and universities have adapted—and continue to adapt—to economic and demographic challenges, by creating new, innovative programs, reducing expenses, and creating new sources of revenue,” said CIC President Richard Ekman. “I hope this study will put to rest the image of the ailing private college and help readers understand the impressive resilience of these institutions.”
Another key finding is that long-term financial resilience of small and mid-sized independent colleges and universities isn’t limited to institutions with large enrollments or access to greater financial resources. It is not dictated by particular institutional characteristics such as geographic region, level of available financial resources, or enrollment size.
A combination of strong institutional leadership and multiple institutional factors are likely to be more determinant of institutional financial resilience than any single characteristic, the research found.
In light of financial challenges, college and university leaders are proactive about monitoring financial health they pursue aggressive change initiatives, which often result in both cost savings and revenue enhancement and are consistent with longstanding institutional missions.
For example, research cited in the report illustrates how Benedictine University in Lisle, Illinois, “adopted a ‘go where they are’ approach,
embracing new and diverse student populations, establishing branch campuses, developing adult education programs, and introducing new models for graduate education.”
Another institution, Houghton College in Houghton, New York, adheres to mission-driven sustainability through diversifying sources of enrollment, adding new programs, and controlling costs with faculty and key stakeholder buy-in.
Overall, research notes that “not only do these institutions intentionally adapt to new challenges, but they do so by embracing, not abandoning, their historic missions.”
A survey of CIC member institutions yielded innovations and initiatives that college and university leaders implement to position their institutions for the future. Those strategies include:
- Learning open faculty positions unfilled, freezing salaries, and reducing other staff
- Restructuring academic programs, including closing some courses and programs, and creating new undergraduate and graduate programs
- Offering online courses or programs
- Changing fundraising strategy
- Renting out campus facilities and classroom space
- Changing admissions strategy and financial aid practices
- Expanding athletic programs and increasing international-student enrollment
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