College Financial Sustainability and AI

2.13.2024

College leaders from across the country are facing some strong financial headwinds: the Great Recession Enrollment Cliff, competitive online learning alternatives, and an increasing number of employers no longer requiring a degree for technical, managerial, even some professional positions.

This past summer, Gallup reported that Confidence in Higher Education Continues to Fall. The Gallup 2023 confidence reading was 36%, significantly lower than the previous readings of 57% in 2016 and 48% in 2018. Add to this the decline in public financial support in many states, growing constraints on tuition increases, the rising costs of operation, and the growing distrust of higher education, and we have unprecedented financial sustainability threats on the horizon. With these challenges burning bright in my consciousness, it was time to gather with some of my colleagues on another ACUE webinar, this one entitled “College Financial Sustainability and AI.” This is the fourth in a series of webinars and blog posts on AI and higher education. See the whole blog series here.

So, for this webinar we welcomed:

Geoffrey Cox, Associate Dean for Finance and Administration, Stanford University Graduate School of Education
Margaret (Maggie) McMenamin, President, Union College (NJ)
Dawn Ressel, EAB Senior Director for College Financial Sustainability

Here are the outcomes we set out to deliver:

Promising college financial sustainability strategies
Explanations of how AI can amplify cost containment and alternative fund development
Critical reflections on the sustainability of traditional practices

I hope that these highlights of our productive conversation will be noteworthy for you. Here’s what our panelists shared.

Geoff recommended that we begin by looking to ideas and innovations that will bring us back into a growth position. A start is to recognize that our work is vital to the American workplace. Even as we see degree requirements disappear from some job descriptions, we know that employers more than ever want creative, resilient, critical thinkers. These intellectual skills are lifelong habits instilled in our students during their time at college. Next, we should also be examining partnership opportunities so we can build on the collective strengths of institutions rather than duplicating investments in programs. Further, AI should be embraced with optimism and integrated into teaching and learning to empower students to become creators, not just passive recipients of information.

The pessimistic concerns about AI and cheating have been largely disproven. A recent Stanford study shows that plagiarism is not as pervasive as many have suggested. Finally, more concerning is the crisis in confidence about higher education. How can we be more intentional in promoting the value and importance of the work we do? How can we help students be more creative and resourceful as they prepare for the workplace? I too, believe this work needs doing! So, let’s shift now to hear the contributions of Maggie McMenamin, President of Union College (NJ), who introduced some powerful transformational ideas into the conversation.

Maggie brought her unique lens to this conversation around college financial sustainability. She spoke about how affordability is a cornerstone of what community colleges bring to the marketplace, making higher education more accessible. She advised that, as college leaders see funding sources decline, they should look to their strengths and leverage them with efficiency. Rely on data to inform the shifts you make to bring your institution into realignment. Perhaps that means employing more part-time instructors, training staff to utilize technology more effectively, or using real estate as a revenue generator. Launch new courses and programs that speak to in-demand skills (like AI). Non-credit retraining programs can support mid-career professionals who need to acquire competence in new technologies as they find their way into job requirements.

Maggie agreed with Geoff that shared services among colleges could be a good direction to consider. Why would we replicate what other institutions have? If we can work regionally, maybe we can save some colleges from closing. Since mission is our common ground, reminding people of our mission is the opening to facilitating change in institutions. To fulfill our mission of serving students and our communities, we need to be open to changing our ways of working. Fear can be a blocker, just as it was with Union College faculty and their concerns about AI. However, after receiving professional development through ACUE courses, the doors of creativity have been opened. Yes! I agree wholeheartedly with Maggie, but there’s one more voice I wanted to hear -- that’s the voice of EAB’s Senior Director for College Financial Sustainability, Dawn Ressel.

Dawn has the advantage of seeing higher ed’s challenges through the eyes of her many clients. In her perspective, higher ed is on the verge of having to redefine itself. What will the institution of the future look like? She recommends diversifying revenue streams. EAB has identified over two hundred! Some of these include utilizing industry partnerships, investing in endowment operations, and certainly also using ChatGPT to save time and improve communications. Above all, college leaders should be looking for efficiencies within the institution.

In the academic area, for example, we should be looking at our course offerings and programs. In terms of new technologies, like AI, we should realize that we have been here before. Think about how graphing calculators changed the math classroom! And, in the end, we should focus on how leaders pursue change management. This is vital. A command-and-control approach can backfire. Transparency and communication are key. Helping faculty and staff understand the “why” and the benefits of change is crucial. Dawn did a great job of summing up our deep conversation about the need for institutional change in higher ed today.

Before we closed the session, I wanted to tap ChatGPT4, our robot in residence, for some ideas on how to support institutions in these challenging times. With the right prompt around sustainable financial practices for colleges, it produced these results (each with a paragraph explanation not cited here for brevity):

Revenue stream diversification
Cost containment and efficiency
Strategic enrollment management
Investing in tech and online education
Endowment management
Strengthening alumni relations and fundraising
Collaboration and partnerships
Adopting a student-centric approach
Regular financial monitoring and reporting
Strategic planning
Flexibility and responsiveness
Sustainable practice
Student tuition pricing strategies

So, as I expressed at the opening of this post, I hope that this conversation serves as inspiration for you in these challenging times in higher ed. I’m confident we can meet the moment, survive and thrive with some of the innovative strategies presented by my colleagues here and some new ones that you develop at your institutions. I always want to hear from you, so please reach out and let me know what’s happening at your college!

Be well,

Jim