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Articles: Revenues

Finance professor Jeffrey R. Brown's new book is "How the Financial Crisis and Great Recession Affected Higher Education," with co-editor Caroline M. Hoxby, a Stanford economics professor

In How the Financial Crisis and Great Recession Affected Higher Education, Jeffrey R. Brown, a finance professor at the University of Illinois at Urbana-Champaign, and co-editor Caroline M. Hoxby, a Stanford economics professor, examine universities as complex economic organizations that operate in an intricate institutional and financial environment.

New football teams continue to take the field at colleges and universities each fall, overcoming criticism—from within higher ed and from outside—that sports programs not only suck up money desperately needed by academic departments but also drive up tuition and student fees.

The latest NACUBO-Commonfund Study of Endowments shows college increasing spending from their endowments. (Click to enlarge)

U.S. colleges and universities last year paid for operations with bigger chunks of their endowments to compensate for declines in key sources of revenue, particularly tuition and public funding.

The good news is that the average rate of return rose for the second straight year, from 11.7 percent in FY2013 to 15.5 percent in 2014, according to the “NACUBO-Commonfund Study of Endowments,” released in January.

Based in part on geographic proximity and mission complementarity, higher education institutions cater to the fast changing skills development needs of the gaming industry. This is especially true in Las Vegas where UNLV supports the International Gaming Institute which features its prestigious Executive Development Program. UNLV provides knowledge on most aspects of casino management and with courses geared toward executive levels—future leaders of the next iteration of casinos and resorts are trained.

Donald Farish, president of Roger Williams University, predicts nonprofit private colleges will continue to increase both tuition and discount rates in 2015. Farish will deliver a keynote at the UBThrive conference in June.

Presidents and other thought leaders look ahead on cost, technology, learning and the other big issues in higher education.

Many institutions expect to make significant investments in academic technology, Wi-Fi connections and network security in 2015.

Of the higher ed leaders who responded to a UB survey, nearly half expect overall tech spending to increase at their schools, while another 40 percent said it will stay the same. Perhaps surprisingly, a full 11 percent expect tech spending to decrease.

A majority of higher ed leaders expect modest to significant increases in tuition revenue in 2015. (Click to enlarge chart)

Multiple forces are pushing institutions to change from the financial status quo. Institutions are feeling more pressure to advocate for state higher ed funding, prove their value to students and support the simplification of debt repayment. Yet some campus leaders might just be fine with the opportunities that scrutiny can bring, and in many cases, administrators are meeting those challenges.

Student success and controlling costs are the top priorities for higher ed leaders in2 015. (Click to enlarge graphic)

Experts in higher education administration and management predict that 2015 will bring intense and sometimes surprising governance, financial and legal challenges to the sea of potential worries for university leaders. A few critical issues that will bubble to the surface involve financial health, academic performance, student wellness and continuity in leadership.

Capital fundraising retains a top slot among institutional fundraising priorities due to renovation and construction imperatives, new program requirements and the need to update technology. In addition to broader capital campaigns and a razor-sharp focus on major donors, more institutions are seeking support from the business sector.

Advance planning: Dedicated alumni and friends of Hendrix College can purchase a niche in a campus columbarium.

From cashing in on beer sales at football games to providing community members with a safe way to trash old electronics for a fee, administrators are looking beyond tuition and endowments to make up for budget shortfalls.

Resource constraints and other challenges are preventing some historically black colleges and universities from internationalizing their campuses as extensively as other institutions of higher education.

That’s a major finding of the Creating Global Citizens initiative, which for three years studied seven HBCUs that worked with the American Council on Education’s Inclusive Excellence Group and the Center for Internationalization and Global Engagement.

The world of intellectual property is not the easy goldmine it may appear to be from the outside. There is a business behind selling scholarly works, whether they fall into the patent or copyright realms of IP--both forms are citizens of the university world, though with completely different issues and revenue streams.

While trademark would not generally be considered scholarly material that is serving the public good, the $4.6 billion a year it generates for institutions does help them remain more healthy and visible.

That total makes it the second largest category of licensed merchandise in the country, behind only Major League Baseball, says Andrew Giangola, vice president of Strategic Communications at Collegiate Licensing Company, a sports marketing company that represents nearly 200 colleges and universities.

Whether it’s purchasing textbooks every semester or meeting daily needs such as meals, snacks or health and beauty aids, students who find the right dining and retail stores on campus have a better college experience.

Many higher ed institutions are adding shops and brand-name eateries, as well as renovating bookstores to keep up with current technology trends.

For the first time, students are paying, on average, half or more of their tuition’s cost. (Click to enlarge graphic)

Subsidies for public higher ed institutions are the lowest in a decade—and for the first time, students are paying, on average, half or more of their tuition’s cost. Those are a few of the financial trends substantiated by a recent American Institutes for Research (AIR) study.

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