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Business Continuity


Every American can recall where they were on September 11, 2001 when hijacked airplanes crashed into the World Trade Center in New York, the Pentagon in D.C., and a field in rural Pennsylvania. The day brought families, communities, and the nation together in mourning for, and later remembrance of, those who lost their lives in the terrorist attacks. For administrators at New York City higher ed institutions, Sept. 11 brought the monumental task of organizing memorial services, setting up aid for the university and community population, and implementing emergency policy changes.

The Rutgers (N.J.) spying case and the Penn State abuse scandal, among others, highlight the liability risks of all types facing colleges and universities. From the other end of the risk spectrum, Tulane University’s (La.) long struggle to rebuild and recoup losses stemming from Hurricane Katrina illustrates the complexity of property damage risk management.

Preached by a select few in academe who saw the recession approach like a speeding freight train, the do-more-with-less philosophy—finally—is gaining traction and critical leadership support in higher education both nationally and abroad. Yes, finally.

California Gov. Jerry Brown, with students and teachers behind him, gestures during a news conference after voting Tuesday, Nov. 6, 2012 in Oakland, Calif. The governor talked about his support for Proposition 30  that will increase funding for schools and public safety.

While voters across the nation were glued to their screens on election night counting electoral votes, the higher education community was holding its collective breath awaiting the answers on a number of important ballot initiatives, proving this year’s election was truly about more than blue and red for higher ed.

A third of all colleges and universities in the United States are in a weaker financial state today than before 2005, according to a new study.
Colleges have more liabilities, higher debt service, and increasing expenses without the revenue or cash reserves to back them up, as well as limited ability to pass costs onto families, according to Boston-based Bain & Co.

Proving that few higher ed institutions are immune from the effects of the economy, schools such as Yale and MIT are included on Bain’s list.

  • Cuts in state funding have forced University of Alabama trustees to consider tuition increases for the fifth straight year. Tuition hikes ranging from 7 percent to 8.6 percent are expected for all three campuses. If approved, tuition for in-state undergraduate students will rise 7 percent from $4,300 per semester at the main Tuscaloosa campus to $4,600. Tuition for out-of-state students would rise nearly 5 percent from $10,950 per semester to $11,475.
Administrators, faculty, and staff at Ohio U could opt to begin their "twilight years" early.

It’s an increasingly common move by campus officials during challenging economic times: voluntary retirement. Offering these incentives to faculty and staff provides a ready means of reducing personnel costs while not being seen as severe and traumatic as layoffs, salary reductions, and furloughs tend to be.

Although the details of such plans vary from one college to the next, they all rest on the potential for shrinking the workforce during times of static or declining budgets.

It’s no trade secret that there is a growing trend of colleges using developers to construct student housing. A number of universities, particularly public institutions, are finding it advantageous to work with large real estate developers.

However, based on my years of experience, the advantages of working with private developers go well beyond public universities and construction of student housing.

Higher education costs are skyrocketing at a rate much higher than inflation. While states have drastically reduced public university budgets, those universities are constrained from raising tuition costs appreciably. Add to this the fact that higher education is a labor-intensive enterprise, and you begin to understand the dilemma in which we college administrators find ourselves.

Until recently, many 403(b) employee retirement plans were viewed not as actual plans but as clusters of individual employee contracts with different vendors. Higher ed institutions were like middle men, with their role limited to passing through employee contributions to individual plans. Administrators saw little need to pay much attention to their 403(b) plans or to exercise much oversight of third-party mutual funds or insurance companies managing employee funds.