4 ways to contain academic costs

COVID-19 has put significant pressure on college and university finances, given lost housing revenues, new expenditures relating to pandemic treatment and prevention, and declines in new student enrollment. To take a harder look at academic cost containment, institutional leaders are exploring moving beyond traditional administrative cost-saving opportunities.

Discover four levers higher ed leaders can pull to contain and reduce academic costs, based on the advice we shared in our recent roundtable on the topic. And don’t forget to check out our recommended next steps.

Review the Key Takeaways

Examine instructional costs

Academic and instructional costs make up a majority of most institutional budgets, and most have already exhausted ‘low hanging fruit’ cost savings opportunities in back office functions or areas outside of core institutional operations. Therefore, provosts and academic leadership teams are looking for a range of options within their control and within the guidelines of shared governance to find millions in savings over the next fiscal year.

Percentage of institutions implementing preliminary cost-cutting measures:

• Travel freezes: 85%
• Hiring freezes: 68%
• Administrative staff furloughs: 9%
• Layoffs: 4%

Create a plan for ongoing faculty engagement

Changes to compensation, benefits, and retirement incentives aren’t always possible. Successful leaders tend to allow faculty a number of options to adjust or reallocate their assigned workload. In the case of retirement, often less tangible benefits that allow sustained connection and engagement with the institution are more valuable to senior faculty than a simple financial package.

• 49% of faculty want and expect to work past normal retirement age
• 94% cite enjoyment and fulfillment provided by faculty work as a major reason to continue working

Eliminate academic inefficiencies

The bulk of instructional cost avoidance comes from scaling back adjunct/part-time instructor costs by using full-time instructor time more efficiently—auditing course releases, raising section caps, consolidating small sections, and encouraging full instructor course loads.

Conduct annual program review

Finally, program closures should be approached with a clear understanding of underlying cost structure (simply removing curricular tracks without students enrolled doesn’t necessarily save you money) and with fair, transparent methodologies of determining the health of a program or academic unit. Units generating high student credit hours but without enough majors enrolled to remain viable are often pivoted to roles focused on general education.