Higher education institutions have experienced a deep in enrollment for several straight years in a row. The reasons behind the low enrollment are varied and could differ from one region to the other. However, the impacts on the institution are adverse and primarily touch on the colleges' financial well-being. Over the last few years, higher education institutions have been compelled to operate on lean budgets, which has caused universities to rethink how they recruit workers or utilize the assets and resources at their disposal. According to a statistic by the National Center for Education Statistics, university enrollment slumped by approximately 7% between 2010 and 2016 (The Impact of Declining Enrollment). Some of the reasons provided to back the reduction include high tuition costs, for-profit college closures, and the declining university-aged population, among other valid reasons. The small budget with which these institutions operate has caused some institutions to shut while others continue to struggle, jeopardizing education quality. By focusing on the University of Massachusetts Amherst (UMAS), higher education institutions must compensate for a budgetary crisis caused by low enrollments by creating flexible and highly incentivizing programs.
Solutions
Universities, like any other business, must remain creative to continue surviving during difficult economic moments. One of the strategies that universities could consider to resolve the budget crisis would be a change in focus to the online programs. As illustrated by the author, "Online enrollment growth is outpacing on-campus enrollment, and the institutions taking advantage of this new demand are seeing results." The online arena's expansion is regarded as the single most popular, prominent, and popular venture. One of the US universities that have reaped benefits from this strategy is the University of Massachusetts Amherst (UMAS). Between 2012 and 2017, the institution’s online sector expanded from 54,000 to 75,000. In 2017, the institution recorded revenue of over $100 million (How Growing Online is Growing Revenue). More importantly, the ongoing pandemic has also adversely affected university enrollment. Universities have been compelled to initiate social distance and hygiene mechanisms, which have increased these institutions' operating costs. Therefore, moving online not only generates revenue but also enables institutions to limit their expenses. However, institutions will also be required to invest heavily in information and technology infrastructure during this period. Although this could be costly, it is a short-term problem that has long-term benefits for the organization's financial stability.
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The second strategy should focus on incentivizing the students. Like any business strategy, universities should invest in their marketing strategies to increase the number of clients at their disposal. The same calls on these institutions to demonstrate high-level creativity. No single standardized way exists as to how universities can incentivize prospective learners. Rather, each college or university must devise a mechanism that is in tandem with its system and structure. Institutions can provide students with different benefits such as early registration, free football tickets, free food, and free books, among other incentives (Marcus, 2020). Such a strategy will likely eliminate some of the barriers that have often contributed to the low enrollment to campus. Students will more likely want to associate with such institutions. Like investing in online classes, incentives could have short-term increased costs, but the benefits will be high in the long term. UMAS demonstrated this strategy's practicability by providing students with incentives to steady its financial situation. As illustrated by the author, "UMass Boston is adjusting dining and parking costs, as well as working with the private owner of its 1,070-bed on-campus residence halls on housing cost adjustments for students” (Burns, 2020). Such a strategy is likely to revive its difficult financial position.
Areas it overlooked
Some higher education institutions are known to take drastic measures during the budgetary crisis to survive or remain viable. Some common examples include reducing expenditure by primarily cutting staff members and reducing programs that experience traditionally low intakes. UMAS did not go down this route, especially during the pandemic where it lost about $70 million in a fiscal year (Burns, 2020). Some institutions are driven by ethical and legal guidelines that exempt them from taking such measures. For instance, furloughing employees could result in labor union rows that could make the company lose extra funds through litigation. Besides overlooking employees' potential firing, the institution retained the risk of continually paying its staff regardless of the budgetary constraints.
Budgetary Proactivity
A low enrollment period provides institutions with unprecedented financial situations. However, institutions must remain proactive and responsive to the issues before they take shape. Firstly, institutions must understand the market, including the disruptors that are likely to affect enrollment and respond quickly. For instance, as the pandemic started setting in, proactive institutions should have a sense that online learning is the future to go. Therefore, this calls for flexibility and adaptability. Institutions must set up contingency funds that allow them to take the necessary steps and avoid the adverse implications. Secondly, institutions must provide higher financial experts whose primary role is to forecast the university's financial health, including providing the much-needed solutions appropriate to the prevailing market conditions. Like any other business, universities need financial experts with knowledge in market trends, budgeting, and making financial decisions. Such professions will also help the organizations to understand their preferences and eliminate wastes during difficult moments.
Universities must always seek to increase their sources of revenue without necessarily depending on the enrollment. Besides the tuition, universities can also depend on grants from various levels of government and other financial aids. An increase in the revenue sources should be accompanied by a reduction in costs and expenses. A university of UMAS magnitude has numerous sources of expenditure, including salaries, wages, and utility bills. With the financial experts' help, the institution must uncover areas that can be slashed or removed completely to ensure that the institution works optimally.
Conclusion
By focusing on the University of Massachusetts Amherst (UMAS), higher education institutions must compensate for a budgetary crisis caused by low enrollments by creating flexible and highly incentivizing programs. In recovering revenue, universities must consider shifting to online platforms. The case study of UMAS has shown the extent to which the institution has managed to reap the benefits of online studies. Secondly, institutions should also incentivize students to promote the admission rates. Students are likely to feel attracted to the numerous opportunities and benefits that a university is ready to offer. Higher education institutions must always remain proactive in their budgetary plans. They must forecast the gaps in revenue and respond using contingency measures. More importantly, institutions should seek to maximize revenue sources and minimize the expenditure without affecting education quality.
References
The Impact of Declining Enrollment https://beyondcampus.com/bci-news/the-impact-of-declining-enrollment/
How Growing Online is Growing Revenue https://beyondcampus.com/bci-news/how-growing-online-is-growing-revenue/
Marcus, J. (April 2020). Desperate for fall enrollees, colleges are luring students with campus perks and cold cash. The Washington Post Retrieved from https://www.washingtonpost.com/local/education/desperate-for-fall-enrollment-colleges-are-luring-students-with-campus-perks-and-cold-cash/2020/04/22/b6452686-84cd-11ea-a3eb-e9fc93160703_story.html Accessed April 7 , 2021
Burns, H. (May 2020). UMass to lose $70M in revenue to student refunds. The Business Journal Retrieved from https://www.bizjournals.com/boston/news/2020/03/27/umass-to-lose-70m-in-revenue-to-student-refunds.html Accessed April 7 , 2021
