College financial leaders are losing faith in their schools’ long-term economic outlook, and nearly half of those on public campuses expect things to worsen next year, a survey has found.
The trade publication Inside Higher Ed and Hanover Research surveyed 219 chief business officers at public, private nonprofit and for-profit campuses. Officials planned to present the results of the annual poll Sunday at the annual meeting of the National Association of College and University Business Officers.
Among those surveyed, 36% of higher education CBOs and 47% of those working at public colleges and universities said they expect their financial condition to deteriorate in the coming school year.
By comparison, just 22% of college and university presidents said the same in a survey that Inside Higher Ed released in April, the publication noted.
An additional one-fifth of CBOs responding to the latest poll said they lack confidence in their schools’ 10-year financial outlook.
The findings confirm that “the uncertain economy of the past year” has generated a “downbeat outlook” for more colleges and universities, said Liz Clark, the association’s vice president of research and policy analysis.
“Many experienced increased costs over the past year due to inflation in numerous areas from food for dining operations to infrastructure and construction,” Ms. Clark told The Washington Times. “Some institutions are concerned about future enrollment trends due to demographic shifts.”
While two-thirds of the CBOs surveyed expressed confidence in their financial stability over the next 10 years, respondents from private universities were more confident than those from public campuses.
Of those surveyed, 69% of business officers at private nonprofit campuses had faith in their outlook over the next decade compared with 59% of their public university peers.
Confidence was lowest among CBOs from regional public institutions, with just 36% expressing faith in their schools’ financial stability over the next 10 years. That’s down sharply from 75% who said the same in 2021, Inside Higher Ed reported.
The survey also found that 51% of CBOs said their institution is in better shape now than in 2019 before the COVID-19 pandemic and ensuing recession — down from 65% who said the same in last year’s survey.
The share of those who said their campus is in worse financial shape increased from 24% to 33% over the same period, with the rest saying they were unsure.
Most CBOs at struggling schools noted “a painful mix” of decreased net tuition revenue and increased purchasing costs, salary and benefit expenses due to inflation, Inside Higher Ed said. Most with a rosier outlook cited increased operating budgets due to federal COVID-19 pandemic stimulus money.
The survey comes as falling birth rates and rising costs dry up the college application pipeline in some regions.
It confirms declining birth rates have ravaged enrollments at regional public colleges in rural parts of the Midwest and Northeast, said Tom Harnisch, vice president for government relations at the State Higher Education Executive Officers Association.
“People in those parts of the country had fewer kids after the 2008 recession, and it’s going to be even more of a challenge starting in 2026,” Mr. Harnisch told The Times. “Where you had rural high school classes of 105 two decades ago, you’re seeing graduating classes of 70 today.”
State funding for public universities grew 4.9% without adjusting for inflation last year and surpassed pre-recession spending per student for the first time since 2008, SHEEO reported in May.
State and local government funding for higher education totaled $120.7 billion, including more than $2.5 billion in federal stimulus funding. Among public schools, two-year institutions received $55 per student and four-year institutions $169 per student in federal stimulus money.
Full-time college enrollment dropped for the 11th straight year in 2022 and plunged more quickly during the pandemic, the Higher Education Executive Officers Association said. While tuition increased, net revenue fell nationwide as more families and colleges relied on federal funds to finance public higher education.
Public universities enrolled 10.31 million students in 2022, down 2.5% from 2021 and 11.5% from the historic peak in 2011. By comparison, enrollments declined by less than 1% annually, on average, from 2015 to 2020.
“Going forward, states are not going to have pandemic-related federal funding to keep schools afloat,” Mr. Harnisch said. “These regional colleges are essential to the economic well-being of their towns, but they don’t have a national profile in a shrinking applicant pool.”
State public financial aid increased by 2% from 2021 to 2022, hitting an all-time high of $990 per enrolled student, according to the association.
Net tuition revenue per student declined by 7.4% at two-year colleges and 0.2% at four-year colleges over the same period, the group said. Overall, net tuition revenue fell 5.8% over five years, reversing a long-term trend of growth dating back to 1980.
While some private colleges have closed in recent years, many public schools have merged, consolidated, cut programs or raised tuition.
In the survey released Thursday, Inside Higher Ed said college financial officers are “arguably more in tune with the financial realities facing their institutions” than their bosses.
Among CBOs surveyed, 36% say their institution is either “very” or “somewhat” likely to merge academic programs with another institution within five years, and 48% say they will likely share administrative functions.
An additional 49% want their campuses to combine academic programs and 61% want them to share administrative functions.
Other key findings:
• While 62% of business officers said they were operating in the black, only 51% said they could do so without federal COVID recovery funds.
• 68% of CBOs said their institution has more academic programs, majors or departments than it needs.
• 22% of CBOs, including 41% of those at private nonprofit campuses, said their college or university tapped its endowment over and above normal spending levels during the past year.
• 25% say their institution should consider merging with another institution in the next five years, including 40% of CBOs in the Northeast.
By contrast, Inside Higher Ed noted that nearly 8 in 10 college presidents surveyed in April agreed with the statement, “I am confident my institution will be financially stable over the next 10 years.”
An additional 58% of presidents expected their institution to be in better shape next year, with more than two-thirds saying they expected enrollment to rise over the next year.
That happy talk may fall short of reality if recent trends worsen.
According to CollegeBoard, which does not adjust its numbers for inflation, the average tuition for in-state students at a four-year public university rose 1.8% from $10,740 in the fall of 2021 to $10,950 the following year. For out-of-state students, public college tuition rose 2.2% from $27,560 to $28,240 over the same period.
Enrollments across all higher education sectors fell by 0.5% from 17,246,157 in the spring of 2022 to 17,153,317 the following year, the National Student Clearinghouse Research Center reported in May.
This spring’s final tally remained 1,309,284 students short of the 18,462,601 scholars the nonprofit clearinghouse counted in the spring of 2019, before the pandemic.
There is a growing backlash among working-class families against the idea that a college degree is worth years of federal student loan debt, said Peter Wood, president of the conservative National Association of Scholars, which favors trimming campus budgets.
“They see good entry-level jobs that do not require a college degree,” said Mr. Wood, a former associate provost at Boston University. “They see college graduates who are chronically underemployed and who have sacrificed four or more years of time and energy to obtain a degree that is, if not useless, only marginally useful. And they see the psychological damage that colleges now frequently inflict on young people in the name of social justice.”
• Sean Salai can be reached at ssalai@washingtontimes.com.
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