The Pulse of Higher Ed

Higher education institutions, particularly those with online and professional continuing education (PCE) units, are increasingly tasked with balancing financial sustainability and operational efficiency in a resource-constrained environment. As student demographics shift and competition intensifies, institutions are looking for innovative ways to diversify their revenue streams while optimizing operations – this is no easy task.

The need for institutions to “do more with less” has become a common refrain in the education sector. Recent reports have emphasized the financial pressures institutions face, particularly as public funding declines and operational costs continue to rise. According to the National Center for Education Statistics (NCES), tuition and fees now account for a significant portion of revenue for many institutions, particularly as state funding has stagnated or decreased over time. As a result, institutions are increasingly reliant on generating revenue through alternative streams such as professional development programs, microcredentials, and partnerships with industries.

Even prior to the pandemic, higher education institutions were grappling with the reality of rising costs and operational inefficiencies. For example, a 2019 Deloitte report highlighted the fragmented processes of higher education institutions and the lack of technology infrastructure needed to automate administrative processes or leverage data for decision-making. These operational challenges were magnified during the pandemic, as many resource-constrained institutions were forced to pivot quickly to online learning. Many of these inefficiencies remain unaddressed today, and schools continue to struggle with financial constraints and staff shortages.

This context has made it essential for PCE units to adopt innovative revenue generation strategies and improve operational efficiency. Institutions are increasingly expanding their program offerings to attract new students, especially non-traditional learners such as working professionals and adult learners seeking career advancement. Research from the American Council on Education (ACE) suggests that non-traditional learners now account for a growing segment of the higher education market, with many seeking flexible, career-relevant programs that align with industry needs. A joint research initiative between UPCEA and ISACA reinforces industry demand and projections, highlighting the growing need for flexible, stackable educational offerings. In response to increasing demand for non traditional educational pathways, many PCE units have prioritized customizing their programs, developing microcredentials, and forging partnerships with corporate entities to address the evolving needs of today’s learners. However, resource constraints remain a major challenge.

Many institutions are operating with reduced staff and limited financial resources, particularly in the wake of the COVID-19 pandemic, which exacerbated financial strains on colleges and universities. A 2021 Educause Quick-Poll found that 63% of institutions were facing postpandemic IT budget cuts, leading to delayed investments in technology infrastructure. Even three years later, this has forced institutions to adopt more creative approaches, such as utilizing third-party content providers, automating administrative processes, and forming strategic alliances to share resources and reduce costs.

In this environment, it is clear that institutions must continue to adapt to ensure their long-term viability. By identifying scalable best practices and leveraging technology to enhance efficiency, higher education institutions can better navigate the financial and operational challenges they face. The findings from UPCEA and MindEdge’s new research offer a roadmap for institutions seeking to thrive in a competitive and evolving higher education landscape.

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