A recent survey of collegiate chief financial officers shows many believe improving and increasing online education opportunities at their school is a way to ensure or improve financial security. The second annual Inside Higher Ed Survey of College and University Business Officers gathered opinions from 502 campus financial and business officers in May and June of 2012.
In general, school financial officers feel good about the condition of their institutions. Nearly half of participants see their college as in good financial health, while 17.1% believe their institution is in excellent financial health. Since May 2011, the overall feeling of financial health has declined slightly from 69.2% to 66.3%, and has decreased in every sector.
Despite the overall decline in the feeling of financial health, 37.3% of participants believe their school’s financial health is “much better” now than it was in May 2008, and 13.7% believe their school’s financial health is “much better” now than it was in May 2011. Only 5% believe their financial circumstances are worse now than they were in May 2011.
Financial officers expect continued improvement in the next few years—12% expect their situation to be “much better” by May 2013, while 29.9% expect the same results by May 2015. Approximately one-fifth of community college and public master’s institutions’ school financial officers, however, expect their situations to be “much worse” by 2015.
The majority of those surveyed believe that while the business models in most sectors of higher education are strained, they are still considered to be “workable.”
When it comes to the budgets of individual schools – cutting costs and increasing revenue – financial officers are largely in agreement about what school administrators are discussing, what they should be discussing but aren’t, and what is considered to be “completely off the (budget discussion) table.”
Increasing net tuition revenue is seen as a very important way to increase revenue over two-three years by 70.6% of survey participants. Developing and expanding online education programs is seen as very important to 52.8% of participants. Increasing net tuition revenue includes either recruiting a larger proportion of students who can pay more tuition – such as out-of-state or international students – or reducing the number of tuition discounts offered.
Online education as a source of new revenue is seen as a key element to increase revenue to the participants from every sector, except private, not-for-profit universities.
Because they don’t have the same obligations and don’t always report to the same people, financial officers and other college administrators can have different opinions on what should be cut and what shouldn’t be. Financial officers tend to want to cut low-enrollment programs to reduce expenses, while many in academia, they believe, are not open to the idea. Financial officers also want to make more effective use of facilities and use more technology inside and outside of the classroom. Additionally, they are much more open to the idea of cutting athletic funding than their administrative colleagues.
The financial confidence portrayed in the survey is not necessarily felt by everyone. A report released earlier in July by Bain & Company finds that one-third of colleges are on a financially unstable path. Additionally, mid-year outlooks by financial rating agencies Moody’s and Standard & Poor offered a slightly more optimistic, yet cautious, warning about the state of higher education finance.
Follow Anna Schumann on Twitter at @ASchumannCMN.