Edited by David W. Breneman and Paul J. Yakoboski
Chapter 9: Leading in a Changing Environment
Kent John Chabotar FORESEEING THE FUTURE Predicting the future for higher education is an enterprise loaded with danger and risk. In 2006, if someone had told you what we would face in 2009, you would have had that person put in a straightjacket immediately. But despite the uncertainty, I will venture some observations although they hardly qualify as forecasts. First, tuition and fees will continue to be the number one source of revenue for private colleges and universities (no surprise there). Tuition may in fact go up as a percent of total revenue, not because colleges and universities continue the six to ten percent increases of the past, but because other sources of revenue grow more slowly, as will budgets. Current downward pressure on higher education budgets are unprecedented. When the budget is basically staying the same, even small increases in tuition will start to increase the percentage being drawn from tuition and fees. Second, we will see increased tuition discounting, particularly funded (as opposed to unfunded) discounting. When I arrived at Bowdoin College as chief financial officer in 1991, endowments funded 75 cents of every dollar granted in financial aid. Eleven years later, only 50 percent of Bowdoin’s discounting was covered by endowment funds, with the rest unfunded except by the operating budget. At Guilford College, the unfunded figure is 88 percent. As noted by Jane Wellman (Chapter 12), there are highly selective medallion schools that discount to promote accessibility and non-medallion schools that discount to ensure a student...
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