Dive Brief:
- College chief financial officers are bullish on their own institutions' prospects, with a rising share saying they're confident in their financial stability, according to a survey released Tuesday by enterprise software company Syntellis Performance Solutions.
- Asked this fall if they were confident their institutions will remain financially stable over five years, 89% of surveyed business officers either agreed or strongly agreed. That's up from 72% in 2021 and 62% in 2020.
- Those at four-year public colleges were the most confident, with 98% of those leaders saying their institutions will be financially stable over the next decade. Business leaders at four-year private nonprofits were slightly less optimistic about the coming 10 years, with 86% saying their institutions will be stable.
Dive Insight:
The new survey comes as higher ed faces challenges from a shaky enrollment picture, increased labor costs and constraints on tuition pricing. Those challenges prompted Fitch Ratings to say in December that the sector's outlook was stable but deteriorating heading into the new year, with gaps between the haves and have-nots likely to grow.
Syntellis surveyed over 100 college finance officers, mostly from nonprofit universities. The survey was conducted online in October. A third of respondents were at four-year nonprofits, 52% were at four-year publics and 12% were at two-year colleges, with the remaining 3% at for-profit institutions.
A report on the findings notes the contrast between broad market pressures and CFOs' sunny views of their own institutions, terming it "optimism against the odds."
Financial constraints have yet to prompt significant cuts at 60% of surveyed institutions, the company's survey found. Those that have made such cuts overwhelmingly let go of administrative staff — 84% cut those employees. Meanwhile, 35% of those making cuts slashed academic programming for undergraduates, 26% trimmed academic faculty and 16% closed campuses.
Several of the findings mirror those in a survey consultancy BDO released a few months ago, which found college leaders favoring strategies geared toward raising revenue rather than cuts. More than half of that survey’s respondents said their largest challenge was declining enrollment and retention.
Enrollment also weighed heavily on the minds of CFOs in the new Syntellis survey. The top challenge financial officers cited is the so-called demographic cliff — an expected dip in the number of high school graduates available to enter college starting around 2025.
Labor costs were the second most-named challenge. Two challenges tied for the third slot: inflation and decreased funding from public sources or donors.
"The last few years have been a roller coaster ride for U.S. colleges and universities," a report on the survey says. "While many institutions worked to stabilize themselves throughout 2021 and 2022 after the early pandemic turbulence of 2020, numerous forces are converging to create additional volatility in the years ahead."