Pressure Points: Emerging Forces That Require Action Now

In this Business Officer article, representatives from Datatel, TIAA-CREF, Higher One, and PricewaterhouseCoopers share some important trends they think are external forces higher education planners need to pay attention to. According to the author, Sandra R. Sabo, people you can expect to:

Rethink financial models. "Financial forecasts and scenarios will need to be refined because of the broad impact of current economic conditions as well as the rising cost of financial aid and how it will be funded," says Mattie. "Tuition-dependent institutions, in particular, may not have the financial flexibility to increase payouts from their endowments, yet will need to address how to fund increasing levels of financial aid going forward."

Expand matriculation agreements. Undergraduates, especially those with fewer financial resources, don't always stay at the same institution to complete a four-year degree. Bert Scott speculates that this dynamic will increase among families of first-generation college students. "Based on student mobility patterns," he notes, "institutions will need to determine the requirements that would allow students to complete their educations, but not necessarily in one place."

Respond to calls for increased accountability. The public's demand for financial transparency and good fiduciary conduct may intensify over the next 12 to 24 months, predicts Mattie. "In addition, government officials, federal agencies, and donors all want to know that institutions are operating responsibly, both fiscally and operationally. They will continue to hold business officers and others to a higher standard of reporting and compliance responsibility."

Mattie stops short of predicting that educational institutions will need to meet the rigid control regulations that now apply to public companies. Still, he foresees that standard setters and regulators will continue to focus on financial-reporting transparency and control and compliance accountability.

Reassess strategic approaches. What has worked in the past may no longer apply in an environment of increased costs and competition coupled with decreased financial aid and staffing.