Opinion: Weathering Higher Ed’s Financial Storm With Technology

2024 has proven to be a demanding year for higher education, with a tidal wave of converging issues including enrollment challenges, financial aid and technology transformation. Each of these issues will have a significant impact on the overall fiscal bottom line for colleges and universities and could negatively affect their ability to fund critical technology operations and future investments. Below is a mid-year checkup on the health of higher education and some of the top issues in play.

ENROLLMENT’S DOWNWARD TREND

Over the last 15 years, there has been a general trending decline in undergraduate enrollment, reaching a low point during the pandemic. This downward trend did not affect colleges equally, at least from 2010-2021, according to the National Center for Education Statistics (NCES). During this period, two-year public and private colleges and four-year private for-profit colleges saw the largest declines. Some explanations of this decline have pointed to our nation’s reduced birth rate, immigration policies, the pandemic, and the total cost for attending colleges and universities. Administration at these institutions need to look for strategies to minimize this financial gap to operate effectively and efficiently. Cutting programs, raising tuition and student fees, and searching for external funding appear to be the most widespread solutions. The mantra of “doing more with less” is a continuing theme in many fall addresses by chancellors and presidents to their faculty and staff, but it puts enormous stresses on information technology. Faculty, staff and students expect faster networking, 24x7 remote access, and larger storage capabilities. As the demand for technology resources by end users increases and accelerates, so does the need for improved security, privacy and identity management, which all have major cost implications.

FINANCIAL CHALLENGES, BARRIERS AND AID

While some jobs don’t necessarily require a college degree, there is compelling evidence that having one increases the likelihood of a higher salary after graduation. While there has been a general decline in higher-education enrollment in the U.S., recent data from the National Student Clearinghouse Research Center offers a hint of good news. In the spring of 2024, undergraduate enrollments grew 2.5 percent, with community college enrollment growing nearly 5 percent from the previous year. Technology-related disciplines such as computer science and information sciences grew 10 percent at four-year institutions. Meeting this growing demand may require additional institutional investment in faculty, staff and resources.

The rising cost of tuition is another key reason students may not seek a traditional higher-ed degree. According to the college-ranking website Best Colleges, “over half of Americans believe tuition is the biggest financial barrier to college.” Added to tuition costs are student fees, assessed by colleges and universities to provide high-quality facilities and services that significantly increase costs even further. The ability to afford these price increases varies widely by demographics. While some wealthier families can likely pay for increased educational costs, other students from lower-income families or ethnic backgrounds may not be able to take on the weight of additional expenses and crushing student debt.

Financial aid and scholarships can help many students afford the increasing costs to attend colleges and universities. One major challenge in 2024 is the delays in the FAFSA (Free Application for Federal Student Aid) program. The U.S. Department of Education released a new form for the program in late 2023. Unfortunately, according to CNN, “a number of processing problems and glitches” caused major delays in the program. As of May 2024, according to the National College Attainment Network Tracker, completed FAFSA forms are down about 14 percent, which could impact college enrollment numbers for the fall. Higher costs, the ability to afford tuition and student fees, and the challenges in receiving financial aid all contribute to the potential of reduced enrollments and increasing financial strain on higher education.

FUND TECHNOLOGY

While there are significant financial tidal waves crashing against the traditional walls of higher education, making prudent strategic plans and developing innovative solutions may help to stabilize and sustain student enrollments. When students and parents are attempting to make better informed decisions on where to apply, schools that can clearly separate themselves from the rest may have the best chance at future success. Here are five innovative ways that colleges and universities might use technology to attract prospective students:

• Approach the campus foundation about securing sustainable external funding, and encourage corporate sponsorships for student opportunities and technology resources.
• Strategically embrace AI technology to customize student learning pathways, monitor and evaluate institutional administrative processes, enhance teaching and learning, improve coursework, and provide student activities.
• Enhance student services such as advising, recruitment, enrollment and retention, student progress and early-warning monitoring, and mental health care.
• Enhance cybersecurity monitoring as well as early warning and protections for faculty, staff and students. Provide robust personal identification, identity management, and data protection throughout the institution.
• Invest in solid networking and storage infrastructure and cloud computing to meet today’s needs while having a strategic plan for future growth, replacement and renewal. Invest in qualified technology staff and provide retention plans to keep them.

For higher education to grow and thrive in a financially uncertain future, a clearly defined technology strategic mission is critical. Involving your CIO, CTO, or similar administrator alongside your CFO with your administrative team is imperative in having the right people at the “strategic planning table.” There likely will always be myriad issues that will significantly impact the fiscal bottom line. As colleges and universities head into the 2024 fall semester, making the best strategic decisions now will hopefully provide them enough ballast to survive an impending tidal wave of financial change, and ensure they have appropriate technologies in place to weather the potential economic storm ahead.