If you’ve looked at higher education news lately, you might have the impression that certain executives of the financial variety can’t count. There is a growing number of institutions that must make cuts because they’ve overspent their resources, lost enrollment, discovered a deficit, or worse, discovered that the institution’s deficit is much larger than they originally thought. Others have recently determined that their deficits are about to get much larger if they don’t take action now.
The ensuing cuts always seem to focus on academic programs and personnel. On principle, I’m not opposed to making cuts to academic programs, if the right reasons are driving the cuts. While some institutions focus on low enrollment programs, this might not be the best way to determine where institutions should make cuts.
Cutting an entire program is drastic and might not be necessary to achieve the desired results. In many cases, cuts to individual classes or reductions in the classes or sections offered in any given semester might be just as effective at reducing costs as eliminating programs would be.
Program enrollment might be one measure of a program’s sustainability, but as I have written in the past, a better measure is the program’s outcome for students. How much income can a graduate make with a degree from the institution? How long does it take for a graduate to find a job? Do most graduates work in their field? Sometimes, programs that support very necessary occupations are under-enrolled.
Focus less on enrollment, more on graduate outcomes
As part of a program’s inception, the institution should know how many students the program must enroll to remain viable. When the program’s enrollment drops to 110% of its predetermined minimum sustainable enrollment or if the program has not reached minimum sustainability, the institution should first make every effort to increase enrollment to a sustainable level. Only after the institution has made a legitimate effort to raise enrollment should it consider making cuts.
As a matter of cost efficiency, institutions are going to have to become very proactive in promoting programs that are worth saving. While cutting a program cuts its expenses, it also loses the investment that the institution made in its development. The only way to recover this initial investment is to run the program. Unless a program becomes obsolete, draws graduates into unmanageable debt, or doesn’t allow them to earn a living wage, cutting a program may not “save” money at all. Instead, it may cement a financial loss that the institution could otherwise recover.
Additionally, institutions need to demand accountability from financial officers who miscount, miscalculate, make unrealistic or faulty assumptions, overestimate, or fail to make timely investments in existing programs. Poor fiscal management is often the institution’s largest financial problem, and institutions should deal with that appropriately.
Photo Credit: Rafael JM Souza, via Flickr
