A concerning narrative is gaining traction in higher education: that the residential undergraduate experience itself is no longer financially viable.

Enrollment pressure, margin compression, faculty capacity constraints and shifting student expectations are real. But acknowledging those forces is different from concluding that the core undergraduate model is beyond repair.

Increasingly, the implication is that long-term sustainability must come from somewhere else — large auxiliary revenue streams designed to subsidize a deficit-producing core. Microcredentials. Expanded fundraising. Alternative ventures.

Many of these initiatives are smart and, in some cases, essential. But embedded in this thinking is a deeper assumption: that small colleges have lost control of the undergraduate experience as a financially sustainable driver of their mission.

The assumption worth challenging

Most institutions today are operating academic and cost structures they inherited, not ones they would design from scratch today. Decisions about course formats, faculty roles, academic calendars, delivery models and cost assumptions were made under very different market conditions. Over time, those decisions hardened into structure.

Yet the environment around them has changed.

Layering new revenue streams onto legacy systems may create short-term relief, but it rarely produces long-term sustainability. In fact, it can compound complexity and divert leadership focus away from the core undergraduate model.

The question is not whether change is necessary. It is whether that change happens inside the undergraduate model — or around it.

Owning your model means recognizing that academic portfolios, delivery strategies and cost structures are choices, not inevitabilities. It means deciding which elements are truly central to institutional mission and which can be redesigned, shared, or restructured in order to preserve that mission.

For example, one institution might decide that general education courses can be shared while signature programs remain entirely in-house. Another might redesign faculty workload models to reduce per-credit costs without compromising instructional quality. The specifics matter less than the deliberateness of the choice.

Ownership is not about abandoning tradition. It is about evolving it deliberately before external pressures force more reactive change.

Why non-core growth is harder than it looks

For some institutions, non-core growth is absolutely the right move. In certain contexts, it is essential.

It’s also strategically appealing. Expanding into adjacent markets can feel more controllable than redesigning the core academic model. It promises new revenue without immediately disrupting existing structures.

But it is far from a guaranteed path to sustainability. Too often, it becomes a substitute for confronting structural questions inside the undergraduate experience itself.

Launching and scaling new programs demands capital, marketing investment and sustained leadership attention. Competition in graduate and online markets is intense. Many institutions enter crowded spaces dominated by well-capitalized providers with scale, brand recognition and optimized admissions engines. Differentiation becomes difficult and margins often prove thinner than projected.

Even when enrollment increases, expenses frequently rise alongside it and the anticipated surplus never fully materializes.

Meanwhile, the small college experience still offers genuinely distinctive strengths: close-knit communities, deep faculty relationships and immersive learning environments that large or fully online institutions struggle to replicate. What has eroded is not the value of the experience. It is the alignment between that experience and the operating models used to deliver it.

Taking back ownership

If institutional leaders assume the undergraduate experience will always lose money, strategic attention naturally shifts elsewhere. The core becomes something to manage rather than strengthen.

A different path is emerging.

Some small, residential colleges are reexamining how their undergraduate model operates. They are exploring hybrid academic structures, shared curriculum approaches, redesigned faculty workload models and flexible cost frameworks. The goal is not to dilute the mission. It is to align delivery models with economic reality while protecting what makes the institution distinctive.

Owning your model requires deliberate tradeoffs. It means deciding where to invest, what to preserve and what to redesign. It requires confronting difficult questions about which elements of the academic enterprise must be built internally and which can be shared or delivered differently without compromising institutional identity.

These decisions are uncomfortable. But postponing them only reinforces today’s pressures and narrows tomorrow’s options.

The institutions that will thrive in the next decade will not be those that simply add more programs. They will be the ones that intentionally design models aligned to their mission, economics and students.

The question for leadership

If your cabinet or board assumes the core undergraduate model will never be financially sustainable, what decisions does that belief force you to make? And just as importantly, what options might you be eliminating by treating that assumption as settled fact?

Those questions deserve space.

We will explore them in greater depth during our March 19 webinar on academic model redesign and sustainability, including:

• Why auxiliary revenue strategies are harder to win than many assume
• How treating the undergraduate experience as a permanent loss leader can quietly undermine institutional strategy
• What it actually takes to operate an excellent residential experience at sustainable margins

Register now to join the conversation.

For a deeper exploration of this argument, read our full blog: “Own Your Model.”