Mea Culpa Sparks Needed Dialogue

"I readily admit it," said E. Gordon Gee, the president of Ohio State University, who has also served as president of Vanderbilt and Brown, among others. "I didn't think a lot about costs. I do not think we have given significant thought to the impact of college costs on families." 5/13/12, NYT

From the “Turning Points” Archive comes this 2010 post…

Paraphrasing the Clinton White House: “Lower Your Overhead, Stupid!”

High education is on high alert but taking very few proactive steps to address its deepening crisis.  All of the warning signs are there.  Outcries over price, uncertain funding (from all sources), and faltering demographics add to the din: there are fewer affluent families able or willing to pay.

Growing skepticism over the value of most private colleges’ education (relative to what families think they will have to pay), is driving record numbers of students to public institutions at the same time those schools budgets are being gutted, lowering the number of students the public sector can accommodate and leaving those who are enrolled with a diminished educational experience, albeit with the perception of affordability.

Community colleges, proprietary institutions, and on-line programs seem to be in the best position if enrollment growth is any indicator – although class selection and parking availability plague many two-year colleges – and they all have a common attribute: low price and low operating expenses.

In the simplest terms, college leaders can look at income and expense.  In the past much “planning” in higher education began by looking at mission, current business procedures, and then adding the occasional exciting new initiative… and then looking at known and anticipated revenues… and then raising student fees to cover the inevitable gap.

A hot economy – families feeling flush, buoyed up with ready access to private and government credit – allowed that model to flourish.  And colleges flourished with rich curricular growth and stunning expansion of facilities. 

Now the high overhead of maintaining that which grew out of a different, departed world is threatening legacy employee benefit programs, trimming back athletics, shuttering eco-friendly vegan dining halls.  Even academic programs are disappearing (these days “we can’t call ourselves a college without a philosophy department!” is countered by “we won’t be a college if we keep it!”). 

As colleges are being challenged to assess whether they can afford their values, the planning paradigm of the past has to be flipped around and managed.  Colleges have to forecast revenue first and then make expenses fit, and no matter how painful they have to do this intentionally and collaboratively, and begin doing it as soon as possible. 

No other enterprise would protect “sacred cows,” be timid about exploring all options, or wait to let market or regulatory forces drive them.  Higher education is too important to run on cruise control any longer.