The recent news from the world of higher education has painted a pretty bleak picture. Many colleges and universities across the country have been forced to permanently shut their doors due to a series of financial difficulties.
Schools can sometimes weather one storm. When one financial issue after another piles up, that can make it difficult for institutions to remain viable. Here are some of the problems schools have been facing, and how analytics might help them figure out how to become more financially secure.
Financial problems
The pandemic was a wake-up call for a lot of colleges. Enrollment decreased as some students decided not to return to campus and others realized they could pursue similar degrees online without paying for room and board while earning money at the same time by entering the workforce. Many smaller schools took a financial hit in 2020 and 2021, with some being forced to close.
Others that were able to remain open seemed as though they were walking a tightrope, and it would only take the slightest breeze to make them topple. That breeze came instead as a gust of wind with the issues surrounding the Free Application for Federal Student Aid (FAFSA) in the fall of 2023 that carried over into 2024. The U.S. Department of Education had trouble rolling out new FAFSA forms, resulting in a months-long delay. By February, fewer than half of high school seniors submitted a FAFSA compared to the same time in 2023. The uncertainty around financial aid had a trickle effect for schools: some students were less likely to apply, which led to enrollment numbers being down for certain schools, which led to those schools being forced to make significant cuts to faculty or programs. For some schools, another decline in enrollment was the straw that broke the camel’s back, and they were forced to close.
Cutting costs is unique to each institution
No institution takes such drastic measures lightly. Many schools already use analytics in some way when it comes to decisions on this scale. Enrollment numbers are important in that sense, because they are part of the predictive model schools use to get a sense of an upcoming year. As one example, Hampshire College laid off employees and restructured its operations after lower-than-expected enrollment growth for the 2024-2025 academic year.
Still, no two schools are alike when it comes to cutting costs. While almost every college has salaries and benefits to consider, they all have different areas to look to in order to cut costs. There is only so much job-cutting a school can do without bringing down the value of the school in terms of either staff quality or morale. Analytics can help a school with strategic planning by finding other opportunities that can help save money. These cost savings could come in different parts of the university’s operation, whether it’s something related to class sizes or longer-term budgeting involving facilities maintenance, for example.
Fundraising
Another way analytics can help schools is through alumni outreach. Technology has changed the way advancement offices can interact with graduates looking to remain connected with their schools. Alumni are increasingly digitally inclined, and universities can take advantage of that when it comes to fundraising.
Data can help individualize outreach in a number of ways. Based on an alum’s profile, the school can send updates specifically geared towards the recipients’ interests or academic background. Information can be customized to group alumni according to elements such as region or giving habits, and different approaches can be taken for the different groups. A healthy relationship with alumni begins as early as when they are prospective students. Analytics can help build those relationships from the very beginning of the student lifecycle. That work will benefit the institution for years to come, whether it is through fundraising, positive interactions leading to future enrollment by someone connected to the alumni, or both.
Sometimes the data provides a solution that is an easy fix. Some schools that anticipated a dip in enrollment increased their applicant pool for the upcoming school year. Not every school has the capacity to take on more work, such as going through additional applications, but that’s the type of solution analytics can help provide when a school is looking for answers.
Not every solution is that simple. Cost savings could be hidden anywhere in the broad range of data collected by colleges and universities – from information about students or staff to facilities to finances and operations. The right analytics solution can bring together information from many different departments, allowing decision-makers to see all of the numbers in one place. There may not be any easy decisions when it comes to the costs an institution faces, but analytics can certainly help make those decisions more informed.
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