Community colleges receive a favorable report card from the larger public, but only 11% of presidents strongly agree that their institution will be financially stable over the next decade. As presidents and their cabinets ramp up planning and budgeting conversations for the coming year, they’re searching for ways to keep their institutions viable in the future.
Here’s a look at the market forces driving those conversations and placing pressure on strategy and planning.
Alternative revenues are critical as tuition hikes fail to deliver
Among the most difficult tasks that presidents and their chief business officers face is ensuring that college revenue growth can offset the rising costs of educating students. The 2-year sector has sustained losses to its bread and butter population: adults, recent high school graduates, and first-generation students. While there has been a 32% increase in tuition and fees since 2010, these tuition hikes are not enough to compensate, as the sector has lost a whopping $166 million in tuition-based revenue during the same time period. Without tuition flexibility as a viable lever, community colleges are scrambling to find alternative revenues.
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By some accounts, college access is improving. Immediate college enrollment has increased among low-income students. However, the students entering higher education today are more likely to need substantial support from the college. Twenty-five percent of first-generation students leave after their first year in college—a dropout rate four times higher than their peers. And 89% of low-income first-generation students leave college after six years without a degree. In today’s world of performance-based funding, college presidents need to be strategic about the student success initiatives they invest in.
Competition for fewer students leads to crowded market place
Competition for the shrinking pool of prospective students is more fierce than ever—and 4-years have already amended their enrollment and marketing strategies to appeal to the shifting student profile. Arizona State University’s Dream Academy offers free programs to local minority students and parents. Colorado State’s first-generation outreach includes tutoring, summer programs, and professional development in K-12. And Boston College is just one among 66 colleges that meet 100% of demonstrated financial need. In a world where the differences between providers are becoming more and more blurred, community colleges must re-evaluate their value proposition rather than relying on a price-first marketing strategy.
Tech has fundamentally changed how employers operate (and what they demand from higher ed)
Employers are searching for new candidates in a much more analytic manner. This means tools like LinkedIn, sophisticated talent searches, and HR analytics allow employers to stop relying on campus visits as their ultimate candidate search. The implication for community colleges: They must continue adapting the skills they teach students to ensure their graduates can continue to meet employer demand.
You’ll run into these challenges in 2019. Here’s how to overcome them.
To learn about the opportunities that your institution can take advantage of to overcome these seismic challenges, watch our January webconference, “Top Strategic Opportunities for Community Colleges in 2019.”