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Articles: Revenues

(Ed Note: The university and its executive vice president referred to in this story have asked to remain anonymous.)

Can a university use efficiency methods from the corporate world while staying true to its values?

That was the challenge facing The University’s executive vice president (EVP) and his team.

an arrow holding a dollar bill on a dartboard

As the name reveals, auxiliary services will never be directly related to the core mission of colleges and universities. But as ever-tightening resources have become the reality for institutions, the revenue-generating possibilities for these departments have become more important than ever.

Student Loan Default Rates on the Rise

New figures released last month by the U.S. Department of Education show a sharp increase in the rate at which student loan borrowers are defaulting at colleges and universities across the country. According to the report, “two-year cohort default rates” show that 8.8 percent of student loan borrowers who entered repayment in 2009 had defaulted by the end of 2010, up from 7 percent over 2008.

The economic model theory addresses a fundamental question of how scarce resources should be deployed to generate maximum benefits. An economic model includes forecasting, planning, allocating resources, predicting growth, and evaluating risks. The academic library is no exception to an economic model because there is a strong relationship between an academic library and its economic efficiency in budget performance, particularly during economically distressed times. The library operation requires a fresh look at its activities similarly to profit-making firms.

Colleges and universities are increasingly turning to alternative revenue streams, such as grants, private donations, custom publishing, patents, real estate, and profitable graduate courses to help raise revenue. Administrators at these schools say it is the only way they can compete with wealthy private schools that have brand names and large endowments.

As another school Semester begins, administrators will be confronted with a segment of their student population that does not go on to graduate. Attrition is nothing new, of course. It happens every year, as students begin their college careers in earnest, but find, for one reason or another, that they can't continue. Perhaps the student has financial difficulties or is simply not prepared academically or emotionally for the rigors of college.

There was just one problem with State University of New York at Cobleskill’s otherwise successful plan to boost revenue by focusing on noncredit-bearing professional education programs and community-based programming.

That was finding a better way to get students signed up for classes, yet one that was cost-neutral so as not to wipe out the revenue gains.

In his 2011 State of the Union message, President Obama proclaimed that the "first step in winning the future is encouraging American innovation." The Bayh-Dole Act, which I co-sponsored with Senator Robert Dole in 1980, has done just that. I've watched with great interest as the Bayh-Dole Act has established our university technology transfer system as a model for the world by permitting universities, small businesses, and nonprofits to own and manage patentable inventions arising from research conducted in their labs using federal funds.

Across many college campuses, one of the most innovative, yet sometimes controversial, initiatives in recent years has been the embrace and development of online programs. While avoiding the philosophical debate between online educational delivery and traditional on-campus programs, it is more critical to discuss the philosophy of the creation of online learning and its relevance in American economic growth.

America knows higher education. No other country in the world possesses the breadth and depth of comprehensive educational delivery like our uniquely American system.

Interest in collecting payments in lieu of taxes (PILOTs) from higher ed institutions and other nonprofits is likely to grow as cash-strapped municipalities seek additional revenue, according to a new report by the Lincoln Institute of Land Policy. But the recommendation for cities and towns is to collaborate with colleges about the payments to ensure greater consistency and transparency.

Educating students to "think critically, reason wisely, and act humanely" is solidly at the core of what we do in higher education. Sometimes it seems, though, that what's at the periphery—including retail, real estate, and public facilities— demands an inordinate amount of our time and energy. In audits and reports, letters to alumni, and press releases, we lump those responsibilities together under "auxiliary enterprises." The diversity and range of what these may be, however, defies categorization.

It is easy to communicate with constituents when you are talking about enrollment growth, a large financial gift, faculty accomplishments and new building projects. But what about when the going gets rough? What then? How do you share bad news with individuals, both internal and external, who are vested in your institution?

Over the past two years, Arizona State University has opened two new schools at its campuses in the Phoenix area. But these educational additions are not training future social workers, lawyers, or business executives. They'll be turning out qualified future college students, many of whom—ASU officials hope—will populate the state's universities years from now.

Are you watching all the for-profit universities'; stocks soar as their online programs grow by double-digit percentages?

Have you been reading about private equity firms buying failed private colleges and "preserving the mission,"; but developing online programs? Do you wonder how the University of Phoenix grew to more than 400,000 students? Do you believe that you could develop online programs, market them nationally, capture a small share of those online students, and add millions to your bottom line?

WHEN IT BECOMES HARDER TO raise funds and the notion of success is coming up with just 90 percent of last year's revenues, fundraisers must get smarter--by better understanding their donors and the different tools and approaches to connecting with them. Colleges and universities of all sizes now have the opportunity to influence and motivate a new generation of donors and get them in the "habit of giving," but it's an uphill climb. The competition for every second of attention and each dollar is frenetic.

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