The Financial Crisis Hitting Regional Public Colleges

In the world of higher education, a storm has been brewing for years. Now, in the wake of the COVID-19 pandemic, that storm has intensified into a full-blown crisis for many regional public colleges across the United States. As a parent planning for your child’s future or a student weighing your college options, understanding this landscape is extremely important for making informed decisions about your next steps in continuing your eduction.

Enrollment Drops and Funding Cuts

Regional public colleges were, at one point, considered the backbone of affordable higher education. But now, many are facing a double whammy of challenges. On one side, there’s the “demographic cliff” – a sharp decline in the number of high school graduates (particularly in the midwest and northeast). This suddenly shrinking pool of potential students is exacerbated by increased competition from well-known state universities and private colleges – both of which are casting wider nets just to maintain their own enrollment numbers.

On the other hand, state funding for higher education has been on a downward trajectory since 2008. This leaves these regional public universities particularly vulnerable during economic downturns. Despite the economy recovering in other sectors, many states never fully restored their higher education budgets. The result of this became a much greater burden on students and families to cover the cost of their continuing education.

Federal Relief Funds

When COVID-19 hit, it seemed like a lifeline had been thrown to struggling colleges and universities in the form of federal relief funds. Unfortunately it was more of a band-aid, as this influx of cash may have simply delayed the inevitable for many schools. Western Illinois University is a good example. They used roughly $42 million in federal aid to offset revenue losses and cover COVID-related expenses. But now, those funds have dried up, and the university is facing a $3.5 million budget deficit.

This scenario is playing out at many other regional public colleges across the country. The federal aid most of these schools received had allowed them to postpone difficult decisions. But now the bill has come due.

Downsizing and Restructuring

So, what are these colleges and universities trying to do to stay afloat? Unfortunately, many are resorting to drastic measures, including layoffs of staff and faculty, and cutting (sometimes key) programs just to balance their budgets. This trend has become more widespread, too, with more colleges announcing budget cuts due to significant financial challenges:

1. Staff layoffs – from faculty appointments to administrative roles, schools are cutting their personnel to reduce costs. This reflects a broader wave of financial adjustments.
2. Program cuts – less popular or more expensive programs are often being eliminated to focus resources on core offerings.
3. Campus downsizing – increased competition from private colleges is adding even more pressure.
4. Mergers – in some extreme cases, some colleges are actually merging with others to pool resources and reduce administrative costs. This trend is leading to even more closures being predicted.

Adapting to Survive

The future for regional public colleges isn’t quite clear, but what is clear is that adapting and being flexible is probably the most important thing to survival. Here are some strategies these schools are already needing to embrace:

1. Focusing on career-ready programs – offering more vocational and technical programs that lead directly to in-demand jobs may help attract students looking for clear career paths.
2. Expanding online offerings – leveraging technology to offer more flexible, online learning options should help regional colleges compete with larger universities, while appealing more to non-traditional students (such as working parents).
3. Partnering with local businesses – some universities are beginning to develop stronger ties with local businesses. This could lead to more internship opportunities, sponsored programs, and a clearer value proposition for students.
4. Emphasizing affordability – by doubling down on their traditional strength of affordability, regional colleges may be able to differentiate themselves from costlier alternatives.
5. Exploring alternative revenue streams – some schools are even exploring alternative revenue streams, like renting out their under-utilized facilities or offering continuing education programs. For some colleges, this has become essential for survival.

What This Means for You

If you’re a parent or student who’s considering a regional public college, these challenges don’t necessarily mean you should avoid these institutions. Many of them still offer excellent education at a fraction of the cost of the big-name universities or sought-after private colleges. However, it does mean you’ll need to do a bit more homework, such as:

• Researching the financial health of any college you’re considering. Most colleges publish their financials, and if they don’t ask for them.
• Look into the specific programs you’re interested in – are they well-funded and stable? Talk to current or past students from these programs if you can, to see if they’re worth the cost.
• Consider the job placement rates and career services offered by the school. Job placement rates can be misleading in terms of how the college looks at it, so it’s best to talk directly with the college you’re considering and ask them very pointed questions about their placement data. For example, placing an MBA student is different from an art student finding a job.
• Don’t be afraid to ask tough questions about the institution’s long-term plans and financial stability. Talk to the administrators and faculty if you need to. Get a diverse set of opinions, too.

The landscape of higher education is changing quite rapidly, and regional public colleges are at the forefront of this change. By staying informed and asking the right (and often tough) questions, you will be better equipped to navigate these changes and make the best decision for your educational future.

Remember, while the challenges are significant, many regional public colleges are taking the necessary steps to meet these challenges with innovative solutions. The key thing to remember is that you need to approach your college decision with an open mind (and I’d even argue a critical mind). This way, you’ll be able to better balance the potential risks with the often major benefits these colleges can offer.