Higher education institutions are facing mounting financial pressures, from shrinking budgets to rising costs. However, as our recent webinar Smart Budgeting for Higher Education: Discovering Millions in the Margins highlighted, cutting programs isn’t always the best solution. Instead, institutions can find ways to optimize resources, improve efficiency, and uncover hidden revenue—all without compromising their mission.
Cutting Programs Isn’t a Quick Fix
It’s a common assumption: fewer programs mean lower costs. But as Bill Guerrero, CFO and VP for Finance at the University of Bridgeport, pointed out, eliminating programs can actually create new financial challenges. (See: What Does It Really Mean to Cut a Program?)
“There’s this belief that there’s automatic savings or immediate savings… but you’re 18 months down the road to seeing real financial impact.”
Institutions must consider not just the immediate costs but also the long-term effects, including faculty contracts, teach-out obligations, and the impact on student retention. A smarter approach is to look at ways to optimize what already exists.
Finding Millions in Margins
One of the biggest opportunities for financial sustainability lies in the margins—optimizing course loads, faculty workload, and program efficiency.
Elizabeth Lobo, Provost and SVP for Academic Affairs at SMU, emphasized how a strategic approach can make all the difference:
“We run models down to the student credit hour… and use that to make faculty hiring and budget allocation decisions.”
By identifying under-enrolled courses and consolidating where appropriate, institutions can free up resources without cutting entire programs. Adjusting class sizes and faculty allocations can unlock significant savings while ensuring students get the courses they need.
Retention: The Critical Revenue Booster
Acquiring new students is costly, but keeping the ones you already have is one of the most effective ways to stabilize revenue.
Jessica Murphy, Vice Provost at Montclair State University, put it simply:
“It is much more economically sound to retain students than to hope to make up for lost students with new students.”
A focus on student success, advising, and support services can increase retention rates, ensuring institutions maintain steady tuition revenue without the high costs of recruitment.
Transparency Builds Stronger Financial Decisions
A recurring theme in the webinar was the power of transparency in financial decision-making. When faculty, administrators, and finance teams share a common understanding of institutional data, it fosters collaboration and smarter choices.
“I share every college and school’s budget with everybody else… There’s no fight between me and the CFO,” said Elizabeth Lobo.
Creating clear, open conversations about finances helps institutions align their budgets with their missions and avoid reactionary cuts.
Adapting to Change More Quickly
Higher education has traditionally been slow-moving, but in today’s environment, institutions that can pivot quickly will thrive.
As Jessica Murphy pointed out,
“We have to balance reaction with pro-action.”
This means not just responding to financial pressures but proactively identifying new program opportunities, reassessing academic offerings, and ensuring your institution is positioned for long-term sustainability.
What’s Next for Higher Ed Finance?
The conversation from Budgeting for Higher Education made one thing clear: institutions don’t have to sacrifice their programs to stay financially strong. By focusing on efficiency, retention, transparency, and adaptability, colleges and universities can achieve financial stability without compromising academic integrity.
Want to dive deeper into these insights? Watch the full webinar recording here. And if you’d like to explore how your institution can uncover hidden revenue opportunities, let’s set up a time to chat!
