Last week the chancellor of the Vermont State Colleges System announced plans to close three campuses.
Not one, three.
This follows the closure or acquisition of four private colleges in our small state over the last two years. One additional institution closed in 2016, and two state campuses merged in 2018.
Twenty three institutions less than five years ago, potentially brought down to 14.
Here’s what’s bothering me about those numbers. I’m not convinced all of those closings are necessary.
I am fully aware of the demographic trends facing higher education. In fact, I have been studying that data for years, and it’s troubling that many campuses ignored the forces impacting their future enrollments and revenues until they were at the edge of the cliff. Not many industries have an 18-year lead time on their primary customer demand pipeline. Looking forward in higher education does not require a magic eight ball, just a glimpse at birth rates.
And I’m cognizant of the unbalanced cost/revenue ratio in the traditional academic model. I have studied net revenue optimization for the bulk of my 30 year career. For years, most institutions – both public and private – have spent more educating each student than they take in through tuition, room, board, and fees, after scholarships and what industry professionals call “institutional aid.” That is not a sustainable formula.
Unfortunately, the demographic and economic climate for higher education shows no sign of getting better. Instead, it will get worse. Conditions will not support a surplus of seats in classrooms such as we have today. So the reality is that not all institutions will survive.
But jumping from crisis to closure may be premature. A decision of such magnitude can only be made after exhaustive assessment of every piece of the organization.
Here are some questions to explore:
- How do we compare on performance measures (eg., enrollments, revenues versus operational costs, investments and other assets) versus our peers?
- Have we considered expanding the populations we serve, not just geographically but also demographically?
- Can we reconfigure our curriculum and academic programs to be more cost effective, and maybe even provide a better learning experience for our students?
- Do potential cost-sharing partners exist that have not yet been considered?
- Are there any signals that students may prefer institutions like ours in the future? (Hint: post-pandemic students may want to stay closer to home, or prefer rural/suburban campuses over urban campuses.)
To be clear, I am suggesting that there be no boundaries to the possibilities examined in this quest for institutional survival. If the culture at your campus is deeply embedded in the current modus operandi, it will be a difficult road ahead. If your leadership is risk averse, you will miss potentially innovative opportunities. If your board will only support tried and proven strategies, you will continue to be stuck in the past.
Radical change is necessary when the environment is intense and volatile. It’s hard work, but “business as usual” is not an option.
Unfortunately, closing still is.