Following the recent presidential election, chatter is starting to surface around the Department of Education. Will President-Elect Trump change or even dissolve this federal agency? For parents of future students, consider the strategic options below as well as the resources evaluating financial strength of public and private institutions.
In light of the current landscape, colleges and universities across the United States are bracing for an uncertain future. At the heart of their survival is enrollment and funding, whether state or federal allocations remain or if private donations and endowments will become the norm. Student access and ability to pay for higher education attainment will determine if America maintains the status quo or improves our stature on the world stage. Colleges and universities may be facing a reckoning to address a funding cliff created by expiring pandemic relief funds.
To address the funding cliff in higher education, institutions should consider the following strategies:
Diversifying Revenue Streams
Seek alternative funding sources such as grants, partnerships with industry, alumni donations, and philanthropic contributions.
Cost Reduction Measures
Implement cost-saving initiatives such as energy efficiency programs, shared services, and operational efficiencies.
Tuition Adjustment
Evaluate tuition rates and consider adjustments to ensure competitiveness while maintaining financial sustainability. Perhaps in diversifying revenue streams, partnerships with local industry may pay tuition for cohorts in specialized area to fill high-demand positions with employment contracts.
Financial Aid Optimization
Review and optimize financial aid packages to attract and retain students while managing costs. Institutions need to be savvy and consider whether they are buying or selling - a reference to Jeff Selingo's work here.
Program Evaluation
Assess the viability and demand for existing programs, consider consolidating or expanding based on market needs. As faculty, this is a touchy subject; however, involving faculty in any program modification or collaborative efforts strengthens relationships and builds commitment to future success. Including faculty is absolutely integral to any strategic plan.
Strategic Planning
Develop long-term strategic plans that align financial goals with academic priorities and student needs.
By implementing a combination of these strategies, higher education institutions can navigate the funding cliff and ensure financial stability for the future. For parents, you can check out financial resiliency here with a report from Bain and Company on public institutions and those attending private colleges can take a look at the 2023 Forbes Financial Grades here. As we gear up for the upcoming FAFSA and financial aid packages for fall 2025, take some time to do your research!
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