By: David Clark, CIA, CFE, CRMA and LaShaun King, CPA
Like many organizations, colleges’ and universities’ worlds were flipped upside down when COVID-19 emerged in the spring of 2020. To maintain their mission of reshaping the future through educating future generations, colleges and universities had to reimagine their own operations and adapt to a digital environment. Organizations shifted to online or hybrid learning, engaged with new and legacy donors in new ways and diversified revenues, among other strategies to support the change. According to BDO’s Nonprofit Standards benchmarking survey, a majority (69%) of education organizations even accelerated their investments in technology — a major shift, as the sector has traditionally relied on on-campus events, physical facilities and in-person learning.
While many institutions have successfully adopted technology and remote and/or hybrid operations , the financial impact of COVID-19 has been felt across campuses nationwide. Colleges and universities have weathered significant lost revenue as campus closures required the cancellation of revenue-generating events such as athletic programs and facility rentals, refund of room and board contracts, and decreases in student retention and enrollment. Despite their best efforts, 57% of education organizations maintain less than 12 months of operating reserves, and 42% expect declines in enrollment and student retention to be their biggest challenge in the year ahead.
While the headwinds are compounding, colleges and universities can consider pursuing the following strategies to encourage strong student enrollment and retention:
Introducing campaigns for enrollment
Job insecurity, overwhelming workplace pressures and reorganization have significantly contributed to employee dissatisfaction and, subsequently, “The Great Resignation” — a recent trend resulting in millions of Americans quitting their jobs. As a result, there’s been a shift in the traditional career path, and Americans are searching for opportunities that support their interests and personal values, creating a pipeline of new applicants for colleges and universities – especially at the more lucrative graduate school level. Further, the industry continues to see declining freshman enrollment, making it more critical for institutions to be able to develop and capitalize on a pipeline of new applicants.
To connect with potential students, organizations should introduce campaigns that speak to this evolving environment. Organizations can differentiate themselves among the competition by showcasing their unique course offerings, industry and career partnerships, student resources and evolved operations that should include new digital solutions for remote and hybrid learning. With an effective campaign, colleges and universities can share a story that resonates with the next generation of students.
Discounting tuition
On the list of COVID-19’s impact is the disruption to personal and household finance. Since the spring of 2020, families have had to review their spending and prioritize costs as many Americans lost their jobs and worked fewer hours – whether due to business closures, COVID-19-related restrictions on in-person facilities or sick leave. As a result, students are comparing colleges’ and universities’ costs and financial aid packages more closely to find the most cost-effective path to higher education – or else risk staggering student loan debt. At the same time, there’s opportunity for colleges and universities to rebrand higher education. While student expenses can be high, there’s often available financial aid that applicants aren’t aware of. By proactively communicating the full financial package — the costs and the full scope of available financial aid — colleges and universities can disprove perceptions that suggest organizations don’t support the financial burden on students. Organizations that go the extra mile and introduce new opportunities for tuition discounting through grants, scholarships and other forms of gift aid are also in a better position to retain and attract students with these financial considerations in mind. When considering these options, higher education institutions should conduct analyses to weigh the tradeoff of increased enrollment at a lower cost and develop a strategy that will provide the maximum benefit to the school, while supporting students.
Leveraging new technology
While assessing opportunities for digital capabilities has been a best practice for many organizations, COVID-19 has accelerated the timeline for new technologies. Colleges and universities are still working to find ways to operate as businesses in a remote environment and leverage technology for greater efficiencies, while also working to meet greater user experience expectations as students compare virtual learning to other aspects of their ever-more digital lives. To keep pace, colleges and universities can explore and introduce technologies that enhance process effectiveness and student and staff engagement. Some systems and tools include recruiting software that allows for a seamless experience when a candidate applies; online student portals that help manage existing students’ workloads, documents and course information; and enhanced data analytics and visibility for management to monitor and oversee operations and make faster decisions. As more student data and sensitive information migrate online through these transformations, colleges and universities should also consider leveraging cybersecurity software to protect students and their organization from data breaches and cyberattacks.
Facing the future
While the road ahead may pose challenges with retention and recruitment, there are strategies colleges and universities can leverage to support the evolving needs of prospective and existing students and help manage their institutions’ finances. Introducing new campaigns that resonate with this landscape, discounting tuition and leveraging new technology can strengthen organizations’ competitive advantage and sustain their mission for future generations.
Article adapted from the Nonprofit Standard blog.
For more information, contact David Clark, Managing Director, Higher Education, Advisory Services, dclark@bdo.com and LaShaun King, assurance director, lking@bdo.com.
