Trusteeship - May/June 2020 - 21

T

HOSE PROVIDING LEADERSHIP for colleges and uni-

versities in the United States are facing increasingly
complex and unrelenting challenges that stretch their
capacity to understand fully and to respond effectively
to what the future may hold. Trustees, presidents, and
faculty can be so focused on implementing "best practices" in
operational processes or governance that they fail to step back to
ask overarching, complex, strategic questions that in many cases
will determine their institutions' long-term success, or survival.
We have entered a period of necessary systemic change in higher
education institutions overall-and in private liberal arts colleges,
in particular. The urgency and magnitude of these external forces
require holistic, well-informed, strategic thinking, and decisionmaking by trustees, administrators, and faculty-collaborating
together-that can produce truly innovative solutions.

It's Also Time
to Modify
Our Learning
Paradigm
BY LARRY D. SHINN

AGB.ORG

Two Complex and Intertwined External Forces
Of the many external forces higher education must address, two in
particular interact to create an urgent and compelling need for colleges and universities to engage in a systematic assessment of their
enrollment/financial (i.e., net tuition) model and the effectiveness of
their traditional teaching/learning paradigm. Today's challenges may
seem daunting, but they also represent compelling opportunities for
institutions to reimagine their futures in a rapidly changing world.
Enrollment/Financial Trends. Overall enrollments at small colleges and universities have been declining for more than a decade
and a precipitous enrollment decline for all sectors will begin in
2026. Current revenue strategies that presume continued enrollment growth and untethered tuition discounting are unsustainable. Some salient markers of this complex enrollment/financial
challenge are as follows:
■	 There will be a small increase in high school graduates between
2020-2025 after which there will be a precipitous 9 percent drop
in 2026 that won't bottom out until 2031.1
■	 In the Northeast and the Midwest, the number of high school
graduates peaked in 2010, and starting in 2026 there will be
12-15 percent fewer graduates each year until 2032.
■	 Even with an average 52.2 percent tuition discount rate for firstyear students, only 34 percent of private colleges and universities
poled met their enrollment targets in 2019.2
■	 A 2019 survey found that 79 percent of colleges said they intend
to increase their enrollment to make their budgets balance.3
■	 Moody's expects 4 percent operating-expense growth this coming year with 50 percent of public university and 40 percent of
private colleges falling below 3 percent revenue growth-hence,
Moody's "negative" financial outlook for all of higher education.
■	 Seventy-one percent of chief financial officers at colleges and uniMAY. JUN. 2020  TRUSTEESHIP  21
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