Home Current Events The Hits to Higher Education Keep Coming (and Will Continue!)
The Hits to Higher Education Keep Coming (and Will Continue!)

The Hits to Higher Education Keep Coming (and Will Continue!)

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In an article published Monday by the New York Times, reporter Shawn Hubler writes that the resurgence of the coronavirus has forced universities to make deep cuts to close widening budget shortfalls. Some of the examples that she provides include the elimination of low-participation liberal arts degrees at liberal arts colleges, pausing admissions to Ph.D. programs in liberal arts, eliminating undergraduate programs in higher education, and furloughing employees.

No one should be surprised about the news since financial issues have plagued many colleges and universities since the last recession in 2008. Shrinking state support, declining enrollment, skyrocketing tuition, and burdensome debt have been debated in the press for years.

Ms. Hubler writes about a recommendation by the Chancellor of the Pennsylvania State System of Higher Education to merge six small schools into two academic entities. The 14 campuses that comprise the system have lost 20 percent of their enrollment over the past 10 years, due to changing demographics in the region served by these institutions.

These kinds of financial pressures have reached a critical mass throughout the country since the pandemic hit. Students and their families have been reluctant to pay full tuition and room and board for online classes. In addition to shrinking revenues, schools have had to upgrade their online capabilities, as well as cover increased expenses for student and employee coronavirus testing and cleaning.

Most of the suspended Ph.D. admissions are in social sciences and the humanities, according to Ms. Hubler. Typically, these programs are underwritten by the universities and not outside funders like corporations, foundations, and the federal government. Suspending new admissions allows the institutions to cover the ongoing costs of student already in the program whose research may have been delayed due to the coronavirus.

Ms. Hubler cites a Bureau of Labor Statistics report indicating that colleges and universities have eliminated 300,000 mostly non-faculty jobs since February. Based on her interviews of administrators across a spectrum of higher education institutions, the next cuts at many institutions will be low-enrollment programs and the faculty responsible for teaching in those programs.

Colleges and universities in the U.S. have operated for years using a business model that defied logic. At many universities, high-enrollment programs like business administration have contributed a subsidy to the university to cover the deficits of low-enrollment liberal arts programs.

Also, freshman and sophomore general education classes utilize large lecture courses, generating a high contribution margin that flows to the university and allows tenured professors to spend more time on their research than teaching in the classroom. Instead of increasing the numbers of Ph.D. students in high-demand business and STEM programs that may be covered by corporations and foundations and reducing the numbers of Ph.D. students in programs like the humanities that have to be subsidized by the university, many universities continue to operate like they did years ago.

Until the spring forced many universities to embrace teaching online in order to continue the spring semester, few universities considered online programs as a valuable way to increase student enrollment and contribute additional tuition revenues to support an enrollment base that has been declining for years.

The pandemic has acted like a catalyst in a chemical experiment that is likely to not have a good outcome for higher education. Unless the next Congress and the White House choose to fund the $120 billion shortfall claimed by the American Council on Education (ACE), the belt-tightening cited by Ms. Hubler will accelerate, as will the number of institutions that will consolidate or close. It will be interesting to see which institutions outside of those with large endowments will emerge stronger by accommodating the demands and needs of the public.

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Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President and Chief Financial Officer in 2002. In July 2016, he retired as APUS president and continued as CEO of APEI. In September 2017, he was reappointed APUS president after the resignation of Dr. Karan Powell. In September 2019, Angela Selden was named CEO of APEI, succeeding Dr. Boston who will remain APUS president until his planned retirement in June 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. During his tenure, APUS grew to over 100,000 students, 200 degree and certificate programs, and approximately 90,000 alumni. In addition to his service as a board member of APUS and APEI, Dr. Boston is a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA), a member of the Board of Overseers of the University of Pennsylvania’s Graduate School of Education, a board member of the Presidents’ Forum, and a board member of Hondros College of Nursing and Fidelis, Inc. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus. Dr. Boston lives in Owings Mills, MD with his wife Sharon and their two daughters.

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