Navigating Academic Program Cuts: Balancing Budget and Growth

Navigating Academic Program Cuts: Balancing Budget and Growth
by
Shelby Moquin
on
June 3, 2024
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About the Blog

After a brief hiatus for the Memorial Day holiday, Higher Ed Pulse hosts Mallory Willsea and Seth Odell dive into a pressing issue in higher education: cutting academic programs to balance budgets and drive growth. In this episode, they dissect an article from Higher Ed Dive about St. Cloud State University’s decision to cut 46-degree programs to address a $5.5 million budget gap, reflecting a trend seen across many U.S. institutions.

The Financial Realities of Higher Education

St. Cloud State University in Minnesota is facing a significant budget shortfall, driven by declining enrollment and rising operational expenses. Since 2010, enrollment has dropped by over 40%, prompting the university to realign its resources with its revenue. The proposed plan includes cutting 46 degree programs, and 50 minors, and reducing faculty and staff positions. This is not an isolated incident, as many other institutions, including West Virginia University and Vermont State University, are taking similar measures.

The hosts emphasize that while it’s unfortunate to see programs being cut, these actions are necessary for financial sustainability. Seth highlights a contrarian view that cutting programs can also drive growth. By reallocating resources and focusing on high-demand areas, universities can become more financially stable and responsive to market needs.

The Role of Marketing in Program Cuts

Seth stresses the importance of involving marketers in these critical decisions. Marketers can provide valuable insights into market demand and employer needs, helping institutions make informed choices about which programs to keep and which to cut. He explains that launching new programs without cutting underperforming ones spreads marketing budgets thin and can hinder growth.

Mallory concurs, adding that marketing teams often have access to rich data from paid search and other sources. This data can reveal trends in student and employer demand, guiding strategic decisions. She also notes the importance of marketers earning their seat at the table in these discussions, as their input can significantly impact the institution's direction.

Finding the Sweet Spot: Employer and Market Demand

Seth outlines a methodology for assessing academic programs, focusing on employer demand, market demand, and academic considerations. He suggests using tools like Lightcast and Bureau of Labor Statistics data to gauge employer demand and leveraging paid search data to understand market demand. Programs should ideally align with both growing employer demand and student interest in the institution's region.

He also highlights the importance of having benchmarks, such as aiming for at least 50 starts per year for a program to be viable. This ensures that resources are allocated efficiently and that programs are financially sustainable.

Case Study: University of Southern Maine

Mallory shares a success story from the University of Southern Maine, which restructured its academic offerings by cutting underperforming programs and redirecting resources to high-demand areas like nursing, engineering, and business. This strategic move led to increased enrollment in these programs and improved the financial health of the institution. It’s a clear example of how thoughtful program cuts and resource reallocation can benefit both the institution and its students.

Actionable Insights for Marketers

Seth encourages marketers to proactively form opinions on their institution's academic portfolio and be ready to provide data-backed recommendations. He advises using scenario planning to present potential outcomes of different decisions, helping leadership understand the implications of their choices. By doing so, marketers can play a critical role in shaping the institution’s future.

Key Takeaways

  • Cutting underperforming academic programs can drive growth by reallocating resources to high-demand areas.
  • Marketers should be involved in discussions about program cuts to provide valuable insights into market and employer demand.
  • Tools like Lightcast and paid search data can help assess the viability of academic programs.
  • Success stories, like the University of Southern Maine, demonstrate the benefits of strategic program cuts and resource reallocation.
  • Marketers should proactively form opinions on their institution’s academic portfolio and be prepared to provide data-backed recommendations.

Listen + Learn More

For more in-depth insights, tune in to the full episode of  Higher Ed Pulse on the Enrollify podcast network. Stay informed and engaged with the latest trends in higher education by subscribing to our podcast. Don't miss out on the new "PulseCheck" series with Kin Sejpal, exploring international recruitment strategies.

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