ByRyan Craig,
Senior Contributor.
For most colleges and universities struggling to balance their budgets – and that’s most colleges and universities these days – this isn’t their first rodeo. In the wake of the Great Recession, states cut higher education spending by billions of dollars, and public colleges and universities raised tuition faster than ever before and increased out-of-state and international enrollment.
What’s new is the confluence of factors bearing down on college CFOs. We’re witnessing the start of a demographic cliff alongside a decline in the college-going rate. There’s greater price sensitivity and focus on return on investment. Colleges are struggling with debt and higher interest rates. And on top of it all, political attacks and related uncertainty around federal funding. Which explains why Moody’s recently downgraded the entire sector to negative.
Many of the tricks that worked last time around (tuition hikes, international students) aren’t readily available. Plus tuition discounting at private colleges is now over 56%, with many schools closing in on 70%. Launching an online degree program into a crowded market isn’t a solution either.
