This commentary was originally published in Forbes on September 7, 2017.
For the past seven years, Gallup, commissioned by Inside Higher Ed, has polled the opinions of the country’s college and university business officers. This year’s results are out. They are not optimistic, nor should they be. According to the respondents, a growing number of their schools face not only financial decline but also an inability/unwillingness to deal with it.
As a former professor and senior university administrator, I took part in various schools’ efforts to address budget shortfalls through strategies to increase enrollment and, with it, net tuition revenue. This tack often worked in the past, but these chief business officers told Gallup that this strategy is likely no longer viable.
Their gloom is grounded in data, specifically, the demographic trends report released by the Western Interstate Commission for Higher Education (WICHE). It forecasts stagnation and eventual decline in the number of high school graduates, beginning in 2013 and running through 2032. Some periodic upticks notwithstanding, the number of high school graduates in 2032 is predicted to be no higher than it was in 2013.
Simply put, fewer students in K-12 means fewer high school graduates; fewer high school graduates means fewer college enrollments. The heady times of the last 15-plus years, when we in universities could count on steady enrollments, are over, according to the report. The question for university leaders now becomes what to do about it. That is where the situation becomes more complicated.
This year’s survey finds that 71 percent of business officers believe that there is truly a financial crisis in higher education (up from 56 percent in 2015). When it comes to whether their own institutions will be financially health over the next five years, the optimists have dropped from 64 percent last year to 56 percent today. Their long-term expectations are more troubling. While the 2016 survey found that 54 percent of respondents agreed or strongly agreed that their schools would be financially healthy over the next decade, the 2017 survey finds that percentage dropping to 48 percent.
With the magnitude of the demographic changes they face, it makes sense that there was a 16 percentage point decline over the past year of those business officers responding that their school’s strategy would be to increase enrollment. In its place, reallocation of existing revenues is now favored by 64 percent. To this end, roughly 50 percent of respondents—seven percent more than last year—indicated a determination to close underperforming academic programs next year; 44 percent responded that they will be reducing administrative positions, up from 35 percent in 2016.
Despite their understandable angst over finances, the business officers continue largely to rule out two other possible savings opportunities. A mere 27 percent responded that their schools would increase teaching productivity through assigning additional undergraduate courses to tenured faculty. Fewer than that—18 percent—indicated that they would be altering their tenure policies.
Their reluctance is understandable. On the one hand, the financial numbers indicate that schools spend at least three-quarters of their annual budgets on personnel costs. Hence, if cuts are to be made, this is the primary area to look to. On the other hand, at most universities today, the tenured faculty hold sway. As I wrote here, former Harvard president, Derek Bok, explains this in a passage quoted in Academically Adrift: “While (academic) leaders have considerable leverage and influence of their own, they are often reluctant to employ these assets for fear of arousing opposition from the faculty that could attract unfavorable publicity, worry potential donors, and even threaten their jobs” (emphasis supplied).
In truth, it is not presidents, provosts, or deans, but tenured faculty, who have primary control over curriculum and instruction. When presidents tread upon this third rail, as Bok informs us, they risk a faculty vote of no-confidence.
The result? Rather than irritate the tenured faculty through increasing teaching loads, schools will continue to fill more still courses with adjunct professors—who are both low-paid and usually unable to participate in their Faculty Senates (and thus unable to depose senior administrators).
Along with the tenured faculty’s concern with keeping its teaching loads low, college athletics is another sacred that administrators tinker with at their peril, even when the financial numbers back them up. A 2013 NCAA study found that only twenty FBS schools nationwide make a profit off their sports programs. Yet, a mere 20 percent of business officers indicated an intention to reduce funding for intercollegiate sports programs. On the positive side, this nearly doubles the affirmative responses (11 percent) received last year.
Finally, a factor unaddressed in the Gallup survey—but very much on the minds of higher-education watchers everywhere—is the role of campus protests in reducing both enrollment and fundraising. Just last week, Evergreen State College announced a five percent drop in its fall enrollment. The school was shut down for several days in May due to violent campus protests. Evergreen is now suffering from what has been dubbed the “Mizzou Effect.” In 2015, the University of Missouri-Columbia likewise found itself home to “Social Justice” protests. Two years later, it continues to suffer from massive enrollment drops, causing it to close seven dorms, among other efficiencies. These two schools are not the only institutions to sacrifice their core mission—teaching and learning—through acquiescing in the sometimes-violent suppression of free inquiry and debate on campus. Similar outrages have occurred at a number of schools over the past two years.
The frightening rise in campus intolerance could become, or is already becoming, another driver of low or stagnant enrollments at more places than Evergreen and Mizzou. Supporting this hypothesis, a recent Pew poll finds that 58 percent of “Republicans and Republican-leaning independents” now blame colleges and universities for their “negative effect on the country, up from 45 percent last year.”
Whether this anger and distrust will lead some in this demographic to seek options other than a traditional four-year degree remains a question. But, given the size of this group—far larger than that accounting for by the decline in high-school graduates—universities find themselves facing a crisis consisting of more than a demographic drip, and more than the inertia of tenured faculty. They face, for the first time, a vote of no confidence by a large segment of would-be college applicants.
In short, we are witnessing the coming together of three elements constituting a perfect storm for higher education—(1) a reduced number of high school graduates, (2) faculty resistance to change, even in the face of budget shortfalls, and (3) Republican rage over campus political correctness.
In light of this triple threat, cutting costs and, in the process, overcoming faculty opposition, constitute the necessary but hardly sufficient conditions requisite to surviving.
What is most needed, to quote Lincoln, is for our colleges and universities to return to what he called “first principles”; that is, to their deepest reason for being. Until and unless schools restore the centrality of teaching and learning—not athletics, not luxury dorms, and not the latest fashion in PC/SJW ideology—they have will none to blame but themselves for exacerbating the declines that demography already dictates.