Today’s economic conditions are monopolizing discussions among leadership teams and boards of trustees at many colleges and universities. It is a nerve-wracking time, to say the least. Financial stresses now loom very large in pending decisions about enrollment, tuition increases, net revenue, financial aid policies, and discount rates.
Here are four immediate strategies to consider how to manage these challenges in ways that do not compromise an institution’s long-term strategy and sustainability:
Over the last two years, tax-exempt colleges and universities have become targets of increased scrutiny by the Secretary of Education, the Internal Revenue Service ("IRS") and the Senate Finance Committee. With the looming budget crisis and an ever-increasing deficit, regulators are taking a hard look at whether these institutions are providing the public benefits commensurate with the tax breaks they receive as a result of their tax-exempt status.
The recent credit crunch that destabilized the mortgage market and leaked to student loans, along with a heightened public awareness of the impacts of student debt, has brought to light the very real need for student loan reform. As we watched the events of the past few months unfold, the higher education community has been forced to face the fact that the dislocation in the credit markets could pose a real threat to the delivery of student aid.