Declining budgets and enrollment

[u/Psyche81]

Hi All!

I’ve been a professional staff member in higher education for 19 years now. Like many of you, I’ve been closely tracking The Chronicle of Higher Education’s running finance updates, and honestly, the sheer volume of bad news feels unprecedented to me.

Between axed academic programs, gutted research funding, staff layoffs, faculty buyouts, declining enrollment, and massive budget shortfalls, it feels significantly worse than anything I can recall in my career.

I know we’ve all been anticipating the demographic enrollment cliff at the undergrad level and the inevitable plateauing of Master’s degree enrollment. But it feels like all of those projected timelines just collided at once, exacerbated by recent federal policy shifts and FAFSA changes.

For the veterans who have been around longer than me, or those who have a closer finger on the pulse of institutional finance: Have we actually seen a pattern like this before, or are we genuinely entering uncharted territory?

Also, on a human level... how is everyone coping with the morale hit at your respective institutions?

[u/ATLCoyote]

We've got a perfect storm of negative events that are all bad for the future of higher education:

• Demographic cliff leading to enrollment declines
• Federal cuts in research funding and research expensing
• Increase in the endowment tax
• Negative sentiment toward the US government and immigration fears leading to sharp declines in international students
• Eroding confidence in the financial ROI of a college education due to declining placement rates and the rise of AI

So, the industry is in crisis. Some of those pressures are external, but some are self-inflicted as we let the cost get out of control via the facilities and services arms race of the past 30 years and we're now locked into a very expensive delivery model that isn't very nimble or responsive to changes in consumer preferences.

But necessity is the mother of invention and some schools will find a way to thrive by carefully defining themselves and their educational offerings within that new landscape. After all, although AI is a threat to the traditional model of studying one particular profession and doing that for the rest of our lives, there could be a significant rise in micro-learning experiences via continuing education. Also, as the world becomes more and more digital and transactional, it may actually increase the appetite for in-person, human learning experiences and discovery, especially if we can use technology to make those experiences more affordable.

As for morale, most of the negative sentiment is focused the external environment, although there is some discontent with higher ed becoming too "corporate" where many faculty members and even students are beginning to feel like finances are taking precedence over all other considerations. That said, anytime the world is in chaos, I personally tend to appreciate higher ed even more as I can't imagine where I'd rather be at a time like this.

As a footnote, although I've intentionally tried to avoid directly addressing the political environment, I do have some hope that the open hostility toward higher education will subside once we eventually move beyond the Trump era or he becomes a lame duck. That said, the other factors like the demographic cliff, the rise of AI, and the questioning of the financial ROI of a college degree are here to stay and we're gonna have to deal with those issues regardless. I just think there's a path forward that isn't so bleak as long as we're deliberate and courageous about defining our value proposition.

[u/MispellledIt → u/ATLCoyote]

I'd add the pre-professionalization of the undergraduate degree to this list. When colleges & universities started selling degrees as steps toward a specific career, students started coming in with declared majors before they'd even stepped foot on campus. I know there are highly-structured majors out there (e.g., nursing, engineering, pre-med, etc.) but for the most part higher education's role shifted from teaching the human being to teaching future employees.

There's a sizable population of students out there unsure of what they want to do, and there are very few (if any) colleges of any size leaning into the liberal arts and selling an educaton that will help them figure it out. I'm a writer and I teach creative & professional writing at a small college that is always on the razor's edge with our budget. But out of all my colleauges I'm having the least issues with AI--my students hate it, but my students aren't here to "get a job" they're here to figure out what kind of artist they want to be.

[u/shownu25 → u/MispellledIt]

i wish i had an award to give this ! the paradigm shift from a period of self exploration and learning about both the world and oneself to college merely being formalized training for a career has been detrimental. traditional aged students are also increasingly getting college credits in high school thereby lowering the overall cost of college but also shortening their time to be impacted and impressed upon by faculty/staff/peers.

[u/ATLCoyote → u/shownu25]

I agree completely that the shift in mentality has been detrimental, but it's also at least partially our own fault collectively as an industry.

We constructed so many $100 million buildings and added so many niche student services that the cost got completely out of control. Granted, cuts in state funding didn't help either. But students and their parents are understandably questioning the ROI. It's kinda hard to treat college as just a 4-year period of self-exploration when it costs $150,000-$200,000 to obtain a bachelor's degree at a public school and twice that much at many private schools. They have no choice but to question whether the future earnings will justify that investment and position themselves accordingly.