Chief Financial Officers (CFOs) at half of the major universities in the United States have revealed uncertainty about their institution’s financial future according to Inside Higher Ed and Gallup’s fifth annual survey of college and university business officers.
In the study, nearly one-third of private non-profit CFOs believes their institutions may have to shut down in the next several decades because of financial concerns, and 11% of public school CFOs echoed that sentiment.
CFO’s at many of the colleges point to increased enrollment and new academic programs at many colleges while admitting that revising the business model of higher education has been pushed to the background. According to study author Kellie Woodhouse, “The vast majority of CFOs said their institutions have placed a primary emphasis over the past five years on increasing enrollment (88 percent) and net tuition revenue (74 percent).”
CFO’s at 400 colleges and university business offices replied to the survey. The study arrived just as university CFOs converged on Nashville, TN, for the start of the National Association of College and University Business Officers annual meeting.
The study also found that 37% of CFOs reported not having the data they need to make decisions about which academic programs are performing well, and 35% said they don’t have the data to evaluate administrative performance across units.
Gallup also found that, shared services models that centralize administrative services are on the rise with 43% of institutions reporting sharing some of these services and 23% more saying they’re considering it. Shared services is an approach that “centralizes administrative services formerly scattered across departments and schools.
“All of the signals are that this is a sector that is in trouble,” said Jane Wellman, a higher education finance expert with the College Futures Foundation. “Yet the kind of things that would better position institutions for the long haul probably aren’t happening. They’re still at the edges, and solving this more symptomatically than strategically.”
Here is a breakdown of possible closures and financial troubles pertaining to the survey:
When the next 10 years were examined, CFOs at private nonprofit institutions were twice as likely (27 percent) to fear closing as were their public university counterparts (11 percent), with 38 percent of baccalaureate private college business officers reporting their institutions might have to shut down in the foreseeable future.
You can read the full Inside Higher Ed and Gallup’s fifth annual survey HERE.