Budget Challenges and Change
Posted on February 25, 2010
It seems that every week brings more stories of colleges and universities wrestling with the impact of the economic crisis. This week it was Brandeis University announcing major cuts in programs, faculty ranks, and staffing. Purdue announced a major early retirement initiative as it tries to head off an enormous projected deficit in the years ahead. The California public system, once the envy of 49 other states, is being decimated by massive budget cuts and responding with equally massive tuition hikes.
Almost every college and university falls into one of the following three revenue models:
(Publics) Tuition Revenue + Taxpayer Support
(Wealthy Privates) Tuition Revenue + Endowment Earnings
(Tuition Dependent Privates) Tuition Revenue + Non-Traditional Revenues(such as CE and Online)
In a reversal of traditional missions, the tuition dependent privates often have students with lower average family incomes than do the public institutions. We privates often offer more aid. Also, tuition at many publics is not the bargain it was in the past (ex: an out-of-state student will be able to SNHU for less money than UNH if the latter’s tuition goes up even modestly next year).
Our budget challenge is not a complicated question if you stand far enough back. We must trim costs, be more disciplined about poorly performing programs (especially if they are not core to our mission), push hard to grow where we can, and build in some safety net for an uncertain fall.
Of course, once we dive into the details the work gets enormously complicated, painful when the focus turns to personnel, and oftentimes a balancing act and judgment call. Adding to the challenge is that the work runs through multiple time frames:
- The short term (we hope!) in which we need to get through the worst economic recession since the 1930s;
- The medium term in which we are trying to build capacity, increase program offerings, aggressively expand COCE, and make investments for long term growth;
- The long term for which we are trying to reposition the university.
Institutions that only frame the challenge in the short term have the luxury of simpler choices, though many of them are being dangerously nearsighted.
Looking ahead to that long term, someone complained to me this week that he would give up on his “hope that we would someday become the Bentley or Babson of the North.” It’s not a hope I share for SNHU. I don’t want us to be some paler (or poorer) version of another university. I think we have an opportunity to re-invent what an institution like ours can be and not remain bound to old and tired assumptions.
We are a long way from realizing that possibility, but I see the seeds of it in much of the work now underway. Some examples?
- The General Education Committee is working hard to develop a General Education Program that goes well beyond the hackneyed “every one with a flag in the ground” territoriality that at institution after institution provides a little bit of everything and little of anything substantial.
- Online is working on an ever richer model of instructional delivery and building tools that get courses online faster and more effectively than before.
- We are retooling our marketing and recruitment to be the equal or better of any for-profit provider and certainly non-profit institutions.
- Expanding our well proven three-year program, introducing the Advantage Program, and launching new programs such as Social Media and Marketing speak to a kind of creativity and willingness to try things that are rare in our competition and largely absent in those schools that some wish we would emulate.
We have a chance to break away from the pack of non-selective, tuition dependent institutions and do something innovative and on our terms.
Doing so would be easier with more resources, more institutional wealth. But here’s the thing: schools that have more wealth never change in the ways we are discussing. There is an inverse relationship between wealth and the ability (and willingness) to change. Necessity may indeed be the mother of invention.