The current sustainability of higher education has been an uneasy topic for many in the industry over the past three years. With the unforeseeable challenges created by the pandemic, many institutions have had to face tough realizations about their future and the impact this has on students. In the spring of 2020, the government provided a temporary life raft with the Higher Education Emergency Relief Fund (or HEERF for short); however, this short-term boost will soon run its course, leaving colleges and universities confronting a critical financial juncture.
What is the HEERF Grant?
The HEERF grant is a program that falls under the larger $2.2 trillion CARES Act that has provided financial support for higher education from the economic pressures of the COVID-19 pandemic. HEERF was supplemented with an additional $21.2 billion in early 2021. HEERF Fund guidelines require institutions to primarily use the funds to support students through the form of emergency financial aid grants. The remaining funds are approved to address institutional needs created by the pandemic and other critical initiatives. In fact, it’s estimated that this funding reached about two-thirds of students in 2021, allowing enrollment to remain high and those students to continue the pursuit of their degrees.
Why Should Institutions Explore Post-HEERF Strategies Now?
With the recent news that the Biden Administration plans to let the COVID-19 public health emergency status expire on May 11, 2023, more HEERF funding is unlikely to be provided. This creates a massive funding gap for institutions, many of which were already struggling financially pre-pandemic. In academic year 2019, alone, international enrollment generated $38.7 billion in higher education revenue—a pipeline decimated by intensive pandemic travel restrictions. Add to this the anticipated 7.5% enrollment drop at four-year institutions by the mid-2030s, decades-high inflation, and continued federal rate hikes, and it is clear that colleges and universities need to explore long-term solutions that break with the status quo. This concern preceded the impact of the pandemic. Of the chief business officers who participated in University Business’s 2019 study, approximately 56% gave the higher education business climate a “C” grade or worse.
Four Steps for Long-Term Higher Ed Financial Viability
As institutions confront decreasing enrollment, declining revenue, increased inflation expenses, deferred facility maintenance, retirement/staff turnover, and an end to HEERF, the urgency for financial solvency has never been higher. Unfortunately, for many colleges and universities, many of the metrics and strategies in place to track important financial KPIs are limited to flawed, late 20th century technologies and practices.
The good news that exists amongst the doom-and-gloom of the paragraph above is that new technology surrounding financial data, including new key performance indicators around projections and ROI, can help bridge the gap to a successful future.
While the concept of financial modeling has existed in other industries for decades, in recent years many institutions have embraced the benefits of this strategy. Offices within higher education have long had a reputation for their scrappy, resourceful method of “doing a lot with a little” as it can be difficult to acquire the most effective tools and technologies quickly. While this ingenuity should be applauded, the reality is that managing copious manual spreadsheets or attempting to accumulate multiple, siloed reports is not only time-consuming, but it also limits insights and increases the chance for data error.
Rather than limiting important analytics to isolated groups, new tools and technology can allow for higher visibility across campuses, more technically sound data, and increasingly actionable KPIs. Additionally, as regulators, boards, and accreditors become more rigorous and demanding, improved transparency and more well-rounded data points can directly impact an institution’s sustainability. With campus-wide inputs, highly reliable data, and innovative new processes, financial modeling can unleash visibility into new trends and opportunities your institution has yet to explore. The best news is that moving from isolated, archaic spreadsheets to real-time, institution-wide dashboard metrics just takes…
Effective Change Management
Let’s be realistic—new technology that can streamline processes, provide next-level insights, and help inform executive decision making may sound great, but change can be hard to implement. When it comes to higher education, advocacy for new technologies, data analyses, and overall change management has a checkered past. Some of the most important technological advancements in society have come at the implementation of colleges and universities; however, there are also plenty of campus libraries that still have physical card catalogs, as well.
Ultimately, if you are going to integrate new tech, new processes, and new ways of measuring results, you’re going to receive pushback. Change is hard, especially for those who don’t see the long-term benefits to doing so. A quality change management program not only effectively highlights the new wins your institution will achieve, it will also involve faculty and staff throughout the journey to help reduce anxiety and minimize pushback. Additionally, the ultimate goal for this process is to improve the student experience, as well, so harkening back to this motivation is crucial, too. It should be noted that this won’t inhibit pushback, though. In fact, pushback shouldn’t be avoided—it creates an optimal opportunity to invite feedback and introduce...
Along the same lines of change management, collaboration is critical to putting your institution in a place to realize next-level insights and results. Creating buy-in from a wide variety of stakeholders is key to introducing new tools and initiatives—especially when those involve cherished data.
An effective change management program, rooted in collaboration, will ensure that transparency is prioritized throughout the implementation journey (and beyond). Identifying the right integrations, ensuring all stakeholders have equal visibility into the amalgamated new system, and effectively training users to make use of this new technology not only creates for a more fluid transition, it also heightens the likelihood that the desired long-term goals of the new system are achieved. With the right level of transparency, your institution can thrive at…
When it comes to cultivating a culture which operates on intuitive, deeply insightful analytics which are informed from across your institution, the reality is that your financial data sources play an imperative role. While it is the goal of every college and university to have true depth of awareness into the financial expenditures that exist on every level, many institutions are mired in complicated, disparate systems that are a nightmare to investigate. Data access to revenue streams, staffing costs, utilities, and more are often not detailed (or holistic) enough to allow for real, actionable insights.
With benchmarking, institutions can establish “best practices” by which to operate against. In addition to comparing operational benchmarks against internal data, colleges and universities can also calculate and strategize based on peer sets, allowing decision makers to craft well-informed strategies and goals based on industry-leading standards.
Preparing for a Post-HEERF Higher Education Landscape
As HEERF draws to a close, institutions face the increasingly urgent need to identify sustainable financial pathways forward. Past methods based on outdated academic climates are no longer feasible in this new higher education landscape.
If institutions are going to continue supporting the nearly two-thirds of students who relied on HEERF to remain enrolled during the last three years, they will need to become more efficient and allocate funds to the programs that truly impact students most directly.
Many institutions, spurred by best practices and proactive initiative, have already embraced innovative technologies with richer insights into financial modeling and benchmarking in order to identify opportunities for efficiency. The remaining institutions, confronted with decreasing enrollment, declining revenue, increased inflation expenses, and more, can use the end of HEERF as a catalyst to welcome this vital new process and reap the long-term rewards.
Want to learn more? Check out our eBook exploring how three universities built a stronger, data-informed foundation during a new era of financial stewardship in higher ed. Available now!