BLOOMBERG: Photographer: College Presidents Worry Their Schools Won’t Survive

Career College Central Summary:

  • Facing shrinking budgets and, in some cases, flagging enrollment, a growing number of college presidents are concerned about the future of their institutions, according to a new Inside Higher Ed report based on Gallup data.
  • Only 39 percent of college presidents surveyed for the report felt confident their institution’s financial model would be sustainable for the next decade, down from 50 percent a year earlier. They were more positive about shorter-term survival: Fifty-six percent predicted they’d be OK for five years. That’s still well below the 62 percent who felt that way in 2014. To gauge the officials’ sentiment, Gallup polled presidents of 338 public institutions and 262 private nonprofits in the U.S. in January and February.
  • “We’ve really reached a turning point,” says Ronald Ehrenberg, a professor of industrial and labor relations and economics at Cornell and head of the Cornell Higher Education Research Institute. “The growing debt crisis and decline in family incomes after the recession has made people very cost-conscious, and institutions aren’t going to be able to increase tuition as rapidly in the future.”
  • Hoping to counteract budgetary woes, colleges have raised tuition faster than the rate of inflation for four decades. Still, that hasn’t always been enough to damp costs. The typical private college gives back more than 40 percent of its tuition dollars in the form of financial aid for undergraduates, according to Ehrenberg, which means even record-high tuition rates aren’t leaving fat margins for spending.
  • “When you’re limited on your ability to raise tuition, and you’re using a substantial amount of tuition to pay to help students attend, you don’t really have a lot of money left to run the institution,” Ehrenberg says.
  • The decline in confidence was particularly pronounced at public universities, many of which have seen their budgets slashed by state legislatures in recent years. Among presidents of public schools granting bachelor’s degrees, 45 percent said they were optimistic about their school’s financial sustainability over the next five years, a 16 percentage-point drop from last year.

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