It seems almost counter intuitive to call for colleges and universities to invest in themselves in the current economic, demographic, political and social climate. Family incomes have dropped. There is a marked decline in the number of high school graduates. The next generation of students will come from new minority groups for whom higher education is not the most accepted, predictable and obvious path to employment. The federal and state governments are cutting back dramatically on their support for higher education – whether in direct subsidies or for students -- and demanding new, expensive, time-consuming and duplicative measures of accountability. The American public has begun to question the cost and value of a 4-year degree, especially outside the STEM disciplines.
Internally at most institutions, the situation is equally bleak. Many colleges and universities have reached the limit in their ability to increase their comprehensive fee. The disparity between the “have’s” and “have not’s” has increased as fixed costs for labor and new investments in areas like programs, facilities and technology have unleashed a consumer-fed battle in which colleges seemingly must offer the best in everything. For every picture of the rock climbing wall in the new athletic facility, however, there are other more important stories about how to provide access, remain attractive to the middle class, or handle either the lack or tidal wave of students in a decentralized and imbalanced national higher education system. For many colleges, the answer has been to play their last card and use their debt capacity to remain competitive. Underlying this approach, however, is the sad reality that so much of this debt is variable rate that the colleges who have taken this route are sitting on a ticking time bomb.
For all of the problems washing over American higher education like some self-imposed tsunami, there is an important opportunity that will test the viability of many of them in the 21st century. The core assumption going forward must be that American colleges and universities – whatever their delivery method – are the foundation of the knowledge economy upon which America has staked its future. It is certainly true that not everyone needs a 4-year degree but it is equally accurate to state that to preserve and protect the promise of America all citizens must be trained for the demands of a competitive global economy. At the institutional level, this assumption requires that senior higher education leadership, including the president, board of trustees, and faculty, make hard choices. Within the competitive world of American higher education, those who survive best will face their future first.
The future begins with a hard comparison between the strategic plan and the college’s budget. Typically, budgets are incremental rationings based on a budget floor with adjustments to about two to three percent above the cost of living. There is usually some money for experimentation in the operating budget and periodic infusions of new capital that come with each comprehensive campaign. But the goal is to avoid the pitched battles common in shared governance effectively turning most budgets into a first-line defense of the status quo. The external effect is to produce the near universal outcry over the price of a college degree. Internally, many senior administrators duck and cover or pray that they can outlast the vitriol.
The solution is obvious. American colleges and universities must get their own houses in order. The journey should begin with two questions: “Who are we and what do we do?” and “Given who we are, what do we wish to become?” To answer these questions, the first choice must be fiscal discipline. Boards and senior leadership must put into place a verifiable, metric-driven financial model upon which the college can operate. Success should not be measured in how successfully the institution wielded the axe but in how gently, purposefully and lovingly the college refined its environment. There are ways to move forward humanely and with optimism by balancing the tools of corporate America with the conservatism of shared governance. And then the fun can begin. Fiscal discipline makes prudent investment possible. Those colleges that do not take this second step to invest strategically will become increasingly irrelevant. Those that succeed best will base their investments upon the bedrock of a good financial model and a prudent strategic plan. American colleges and universities will prosper only if they have asked the tough questions, made the hard choices, and are comfortable with and eager to embrace a future of their own choosing.
Brian C. Mitchell is the president of Brian Mitchell Associates and a director of the Edvance Foundation. http://edvancefoundation.org/. Dr. Mitchell is the retired president of Bucknell University and former president of Washington & Jefferson College. He can be reached at: firstname.lastname@example.org.