- College chief financial officers are optimistic about their own institutions’ prospects, with a rising proportion saying they are confident in their financial stability, according to a survey by enterprise software firm Syntellis Performance Solutions released Tuesday.
- When asked this fall if they were confident that their institutions would remain financially stable over five years, 89% of businesspeople surveyed either agreed or strongly agreed. That’s an increase from 72% in 2021 and 62% in 2020.
- Those at the four-year public colleges were the most confident, with 98% of these leaders saying their institutions will be financially stable over the next decade. Corporate leaders of four-year private nonprofits were slightly less optimistic about the coming 10 years, with 86% saying their institutions will be stable.
The new poll comes as colleges face challenges from a shaky enrollment picture, increased labor costs, and tuition restrictions. those challenges prompted to say Fitch Ratings in December that the sector’s outlook was stable but would deteriorate heading into the new year, with the gap between haves and have-nots likely to widen.
Syntellis surveyed over 100 college finance officers, mostly from nonprofit universities. The survey was conducted online in October. A third of respondents were in four-year non-profit organizations, 52% in four-year public organizations and 12% in two-year colleges, with the remaining 3% in for-profit organizations.
A report of the findings notes the contrast between overall market pressures and CFOs’ sunny views of their own institutions, calling it “optimism against the odds.”
According to the company’s survey, financial bottlenecks have not yet led to significant cuts at 60% of the institutions surveyed. Those who made such cuts overwhelmingly laid off administrative staff – 84% fired those staff. Meanwhile, 35% of those who made cuts cut the undergraduate academic program, 26% cut academic faculties, and 16% closed campuses.
Some of the results reflect those in published a survey by the consulting firm BDO a few months ago, when university leaders favored strategies aimed at increasing sales rather than cutting back. More than half of those surveyed said their biggest challenge was reducing enrollment and retention.
Enrollment weighed heavily on the minds of CFOs in the new Syntellis survey as well. The biggest challenge facing finance officials has been cited as the so-called demographic cliff — an expected decline in the number of high school seniors available to enter college from around 2025.
Labor costs were the second most frequently cited challenge. Two challenges for the third slot: inflation and lower funding from public sources or donors.
“The past few years have been a rollercoaster ride for US colleges and universities,” says a report on the survey. “While many institutions have worked to stabilize in 2021 and 2022 after the early 2020 pandemic turmoil, numerous forces are converging to create additional volatility in the years to come.”