Newest CBO survey exhibits optimism regardless of headwinds
Regardless of palpable enterprise challenges, the newest Inside Larger Ed Survey of Faculty and College Chief Enterprise Officers finds rising optimism amongst respondents.
The survey exhibits that faculty enterprise officers are extra assured than they have been final yr about each the short- and long-term monetary sustainability of their establishments, whatever the difficult headwinds dealing with increased training. Nonetheless, respondents tended to view the state of their very own establishment extra favorably than their friends’ on a wide range of metrics, together with projected monetary stability, faculty prices and AI readiness.
Extra on the Survey
Inside Larger Ed’s 14th annual Survey of Faculty and College Chief Enterprise Officers was carried out by Hanover Analysis. The survey included 224 chief enterprise officers, principally from private and non-private nonprofit establishments, for a margin of error of 6.14 %. The response fee was 12 %. A duplicate of the free report may be downloaded right here.
On Wednesday, Aug. 14, at 2 p.m. Jap, Inside Larger Ed will current a free webcast to debate the outcomes of the survey. Please register right here. The 2024 Survey of Faculty and College Chief Enterprise Officers was made potential by assist from Coursedog, EY Parthenon, HelioCampus and Laserfiche.
Whereas this yr’s survey findings are sunnier than final yr’s, the information isn’t all good. Respondents expressed concern that authorities efforts to form institutional methods and insurance policies may pose a monetary danger. And the variety of enterprise officers reporting constructive working margins has declined.
Launched as we speak, Inside Larger Ed’s 2024 Survey of Faculty and College Enterprise Officers affords insights from the monetary leaders of 114 public and 106 non-public nonprofit establishments, and 4 for-profit faculties.
The Monetary Outlook
This yr’s survey, the 14th annual version, discovered that 83 % of respondents imagine their establishment shall be financially secure over the subsequent three years, and 85 % imagine the identical is true of the subsequent 5 years. That quantity falls to 73 %, nevertheless, when the timeline is 10 years.
CBOs have been much less assured about their long-term prospects final yr, with 72 % indicating they’d be financially secure over the subsequent 5 years and 65 % over the subsequent 10 years.
Cindy McDaniel, controller at St. Peter’s College in New Jersey, expressed shock on the elevated optimism and questioned whether or not choice bias performed a task in driving survey responses, suggesting that extra establishments could also be struggling than the outcomes point out.
“I believe you will see lots occur within the subsequent three years that doesn’t match with the survey,” McDaniel stated.
Many small non-public establishments “usually are not in good condition,” she famous, notably within the Northeast, a degree illustrated by a swath of latest closures in New York, Pennsylvania and elsewhere within the area. Already greater than a dozen nonprofit faculties have introduced closures this yr, together with College of the Arts, Wells Faculty, Goddard Faculty and numerous others outdoors the area.
Regardless of their elevated confidence, fewer enterprise officers famous constructive working margins. Barely greater than half—57 %—famous a constructive working margin for fiscal yr 2022–23, down from 76 % within the earlier yr’s survey. For fiscal yr 2023–24, 62 % of respondents stated they anticipated a constructive working margin. Nonetheless, that varies by sector, with 73 % of CBOs at public establishments anticipating the 2023–24 fiscal yr to yield a constructive working margin, in comparison with 49 % of these at non-public, nonprofit faculties.
Greater than half of CBOs—56 %—stated their establishments shall be higher off financially a yr from now. They pinned these hopes on anticipated will increase in enrollment and web tuition income, whilst many establishments have deeply discounted tuition of their battle to draw college students.
George Middlemist, vp and chief monetary officer at Northern Illinois College, stated he was stunned on the variety of establishments banking on a monetary increase from enrollment.
“Enrollment developments over all are taking place, with a modest exception for the subsequent few years, so all of us can’t be rising except we make use of some new recruitment methods to have interaction highschool graduates that select to not go to varsity,” Middlemist stated. “Given the general public notion across the worth of upper training, we have now some steep work to do to get that inhabitants.”
Many additionally reported excellent news on the endowment entrance. Sixty % of respondents stated their endowment was up considerably, with one other 11 % reporting a major improve prior to now yr. Final yr solely 30 % of CBOs indicated an increase of their endowment worth.
Consolidations, Prices and Cuts
Practically 30 % of CBOs stated their establishment ought to mix educational applications with one other faculty—and 59 % imagine they need to share administrative features—however the overwhelming majority famous an absence of dialogue round potential mergers. Solely 10 % indicated that they’ve had critical inner discussions a couple of merger. Nonetheless, within the demographically challenged Northeast, the share saying they’ve weighed a merger rose to 23 %.
On the flip aspect, 14 % of CBOs stated it’s possible their establishment will purchase one other inside 5 years.
As the previous chief monetary officer of Bloomfield Faculty in New Jersey—which was absorbed by close by Montclair State College in 2023 after it publicly sought a associate amid critical monetary struggles—McDaniel finds it alarming that extra universities haven’t moved sooner to hunt mergers. The merger course of is advanced and may span years, she famous, thus underscoring the necessity to begin the work early.
“You must entertain merger talks. You possibly can’t simply say, ‘Subsequent yr’s robust, let’s merge,’” McDaniel stated, questioning how receptive faculty trustees are to merger prospects.
Value issues could dominate public discourse about increased ed, however CBOs overwhelmingly imagine in their very own pricing fashions.
A whopping 94 % of respondents stated that their establishment affords good worth. However solely 68 % of CBOs imagine that’s true of upper training as a complete. And 69 % imagine that the general public overestimates the price of a school diploma.
Whereas McDaniel famous the ache of writing tuition checks for her college-age baby, she additionally emphasised that “we’re charging what we have now to to make ends meet.” She pointed to rising working prices and the enlargement of obligatory providers, comparable to pupil psychological well being helps.
On cost-saving measures, 71 % of CBOs stated they oppose chopping tenure whereas one other 55 % are towards limiting tenure—although 50 % indicated they’d contemplate rising college instructing masses. A slight majority, 54 %, stated they’d not lower athletic spending.
Different Findings
The survey probed plenty of different areas, together with synthetic intelligence, turnover and extra.
Whereas a lot of the concentrate on synthetic intelligence in increased training has been round pupil misuse and the potential for educational abuse, respondents had combined views on the know-how. Greater than half—55 %—expressed optimism in regards to the potential makes use of of AI in increased training, and 33 % famous that they’re already utilizing AI to make extra knowledgeable selections of their jobs.
Fewer than 1 / 4 of respondents—24 %—expressed confidence in their very own establishment’s capability to deal with the rise of AI, and 67 % indicated they considerably or strongly disagreed that increased training was ready to grapple with the latest ascent of AI.
Whereas turnover offered a major problem throughout and within the wake of the COVID-19 pandemic, these issues appear to have cooled, in accordance with survey respondents. This yr 56 % of CBOs indicated that turnover is about the identical as final yr, whereas 26 % famous it was decrease and 17 % stated it was increased. Solely 12 % of respondents expressed concern about turnover.
