Top Challenges and Risks Report: Insights for Higher Education Institutions

The higher education sector in the US is currently at a critical turning point, coping with a significant decline in enrollments across numerous colleges and universities. Indeed, with each passing year, the number of students enrolling in higher education institutions is decreasing drastically. Not surprisingly, rising tuition costs and regulatory and policy changes are the top contributors to this decline. Besides these, several other factors also contribute to this decline.

To gain a deeper insight into the challenges and risks for higher education institutions, we conducted a survey in which over 180 higher education industry leaders participated. This blog outlines the findings derived from this survey, highlighting the most critical issues faced by these institutions.

The Survey

We conducted a survey in which over 116 higher education industry leaders participated. This included a diverse range of institutions, with 68% being public colleges, and 32% private colleges. Among these, 58% of colleges offer 4-year courses, while 42% of colleges offer 2-year courses.

Institutions that took part in the survey

The list of participants included both private and public institutions. They are as follows:

LIST OF PRIVATE INSTITUTIONS THAT PARTICIPATED IN THE SURVEY

LIST OF PUBLIC INSTITUTIONS THAT PARTICIPATED IN THE SURVEY

Major and Minor Concerns for the Higher Education Institutions

In the survey, we asked participants to identify uncertainties they think have impacted or posed the most significant challenges for colleges and universities. The responses revealed several key concerns. Here's what they said:

Private Institutions: Private institutions pointed out enrollment trends, student demographics, student debt, and inflation as the most concerning uncertainties, while faculty recruitment and retention were the least concerning.

Public Institutions: Public institutions highlighted regulatory and policy changes as the most concerning uncertainty, while competition from other schools was the least concerning.

Private and Public Institutions Combined: Both private and public institutions collectively identified financial stability, funding, and FAFSA corrections as the most concerning uncertainties, while declining federal and state funds were the least concerning.

4-Year Colleges: 4-year colleges find student debt and inflation the most concerning uncertainties, while faculty recruitment and retention are the least concerning.

2-Year Colleges: For 2-Year colleges, regulatory and policy changes are the most concerning uncertainties, while declining federal and state funds are the least concerning.

4-Year and 2-Year Colleges Combined: Both 4-Year and 2-Year colleges collectively highlighted financial stability, funding, FAFSA corrections, enrollment trends, and student demographics as the most concerning uncertainties, while competition from other schools is the least concerning.

Key Insights

• More than 60% of survey respondents consider financial stability, funding, and FAFSA corrections as primary risks for all college types.
• Regulatory and policy changes have the greatest impact on two-year public institutions.
• Changes in enrollment trends, student debt, and inflation were identified by the four-year private institutions as significant risks.

Categories of Risks Identified

In the survey, participants were asked about the category of risks that has the most impact on their institution's success. Here’s what respondents said:

• 53% of the survey respondents specified regulatory and policy risks, including education policies, FAFSA, SAI, environmental regulations, infrastructure, and taxes, as the most impactful risks that can hamper the success of an institution.
• 51% of the survey respondents highlighted customer risks, including student enrollment, cost of attendance, student willingness, and ability to pay, as the most impactful risks that can hinder the success of an institution.
• 23% of the survey respondents identified technical risks, including adoption of new technologies or research and development efforts, as the most impactful risks that can hinder the success of an institution.
• 17% of the respondents pointed out competitor risks, including actions and responses of competitive institutions, as the most impactful risks that can hinder the success of an institution.
• 14% of the respondents identified market risks, including GDP, inflation, FX, interest rates, and commodity prices, as the most impactful risks that can hamper the success of an institution.
• 10% of the respondents are unsure of the risks that can hinder the success of an institution.
• 4% of the respondents find geopolitical risks as the most impactful risks that can hinder the success of an institution.

Key Insights

• Most of the survey respondents believe that policy changes and customer risks such as education policies, FAFSA, student enrollment, cost of attendance, student willingness and ability to pay, hinder an institution’s success considerably.
• The survey indicates that most of the higher education industry leaders believe that geopolitical reasons do not have a significant impact on institutional success.

Conclusion

The survey conducted among higher education industry leaders has highlighted significant challenges and risks that institutions must manage to cope with the evolving education industry. If an institution is well-planned for challenges and risks, it can manage them effectively. Therefore, it is imperative for higher education institutions to stay agile, responsive, and up-to-date with the current trends of the education industry and impart the highest quality of education to their students.