Colleges and universities throughout the U.S. face a variety of risks impacting student success and their overall financial sustainability, including several challenges pertaining to affordability and the return on investment (ROI) from the degrees and programs offered by the institution.
While the higher education spotlight often shines on four-year institutions, it is important to distinguish the specific issues that community colleges encounter. After all, these schools provide critical educational and career path opportunities for a diverse population segment and, in turn, account for much of the U.S. workforce and provide essential jobs to the community.
With that in mind, we examine where community colleges stand today, what risks and warning signs they should be aware of, best practices for mitigating these key issues and, finally, how Baker Tilly can help community colleges chart a course for fiscal resiliency and student success.
The current state of community colleges
Overall enrollment in higher education is down significantly – nearly 15% from Fall 2020 to Spring 2022. Community colleges have taken a particularly heavy hit with an enrollment decline of more than 20% this year, compared to pre-pandemic figures. That’s more than 370,000 students who attended community colleges in Spring 2020 who were not enrolled in Spring 2022.
Affordability is certainly one of the primary barriers many students face when considering post-secondary education. The Coronavirus Aid, Relief, and Economic Security (CARES) Act and Higher Education Emergency Relief Fund (HEERF) funding have provided some tuition relief, but community colleges continue to shoulder much of the burden as post-pandemic, fewer people are able to attend college than in years past.
Why is that? It is not due solely to the financial challenges associated with investing in higher education. Students from underrepresented backgrounds comprise a large percentage of community college students and are among the population segments most impacted by the country’s economic downturn. Many of these students also deal with complicating factors such as working full-time and/or raising a family in addition to attending college.
Of course, the pandemic hasn’t helped matters. Typically, community colleges would see a higher enrollment when there is an economic downturn. However, during the pandemic, we haven’t seen as much of that. Overall, community colleges have lost more than 827,000 students since the emergence of COVID-19. Enrollment figures for Black, Hispanic and Native American students in particular have dipped over the last several years as community college courses switched from mostly in-person to mostly virtual.
Although many community colleges are in the same dire situation, some are in great shape when it comes to enrollment and affordability. These schools typically are the ones that offer strong, in-demand academic programs that were formed in close collaboration with local employers. Degree pathways that provide a direct pipeline to the local workforce add significant value to community college students, as well as create a strong partnership with the community. After all, there is no better ROI than getting hired directly out of school in a field that is valued and, in theory, comes with long-term job security. A strong career placement success rate ultimately benefits the students, the college and the community – a win-win-win.
Unfortunately, that scenario is often not the reality for a lot of two-year colleges and the communities they support. And now with a recession likely on the horizon, it is difficult to predict what will happen in the future, making it even more important to establish these partnerships sooner rather than later.
Key risks facing community colleges
In examining the risk assessments Baker Tilly's higher education team has conducted over the past year, the following stand out as key risk trends impacting the community college sector:
- Affordability and enrollment (the two top risks we consistently see)
- Alignment among infrastructure, technology and student needs
- Lack of consideration of the regional workforce needs and providing in-demand courses (or unique program offerings) to remain competitive
Community colleges should view themselves as a strategic partner in the local and regional economies, which means knowing their students and employers inside and out and making key decisions with their needs in mind.
Addressing risks through strong data and technology frameworks
Identifying top risks leads to the importance of having good data to evaluate and implement improvement areas as part of an institution’s overall technology framework.
Community colleges with strong technology platforms are at a distinct advantage when it comes to making smart decisions to support their students. Some institutions use enhanced self-service technology to facilitate a smooth academic journey tailored to each student’s needs and desires. And when students start to struggle, automated intervention technology can alert the institution that steps need to be taken.
These are just a couple examples of advanced technology helping colleges address concerns surrounding student enrollment and persistence and ultimately their long-term success.
Of course, some institutions may not have the technology, infrastructure and/or resources in place to collect the necessary data, or they may be collecting quantitative data but not qualitative data. In either case, the lack of quality data often inhibits their ability to analyze issues such as enrollment, career placement and students’ reasons for coming to the school and, just as importantly, for leaving.
Furthermore, even if community colleges are able to collect this critical data, many lack the necessary analytical capabilities to leverage the data in an effective manner. Oftentimes, a key to developing a strong ROI is investing in analytics in a way that ultimately benefits the students, faculty, staff and surrounding community.
Community colleges are generally aware of these risk factors, but the critical question is: What are they doing about it? Or, as we’ll explore in the next section: What can they do about it?
Opportunities community colleges should take advantage of
As community colleges look to address fiscal challenges and respond to student needs, the first step is to develop an awareness of where they stand today. This includes taking an honest and holistic look at:
- Financial health: As we approach three years since the start of the pandemic, is the institution in a strong financial position? Is it holding steady financially? Or is it struggling to survive?
- Enrollment: Where is enrollment today compared to recent years? Where do institution leaders hope to be in the future? Are they striving to grow enrollment, keep it steady or is there a need to right-size your resources and campus footprint due to lower enrollments?
- Revenue: What are their costs, relative to their revenues? How can they further diversify their revenues? Are there opportunities for strategic partnerships? Where do they hope to be in the future, as far as fiscal position is concerned?
- Academic offerings: Which degree offerings or course scheduling approaches are bringing in expected levels of revenue, and which ones are losing money for the institution? Should any courses or degrees be combined or eliminated?
As noted earlier, community colleges need to position themselves as a strategic partner to their students and local employers. The concepts of affordability and ROI boil down to the due diligence that community colleges have done on the ever-changing needs of the employers in the region. It ultimately is the school’s responsibility to ensure they are teaching the skills that are most needed in the evolving marketplace.
Community colleges should work proactively and collaboratively with employers in their region to identify specific gaps, in-demand skills and workforce development opportunities. In essence, they need to know their customers (both students and employers). They need to take the pulse of the community and its market needs.
Of course, they also must be in tune with the needs of a diverse student population. Community colleges enroll students of all ages and backgrounds. Some work during the day. Others work in the evenings. Many students have to factor in childcare or transportation arrangements. Class schedule flexibility can be highly beneficial for students – and for faculty as well.
Given the challenges many students experience, not the least of which are financial, institutions should help offer the straightest possible pathways to a degree. This mean smoothing out factors such as technology, communication, enrollment and affordability.
Delivering affordable options to students
One option that community colleges should consider is “fast-tracking” programs in a way that allows students to complete their necessary coursework in one year, rather than two, which would create a simpler and more affordable degree path. Some institutions are already doing this, as the benefits of “stacking credentials” are available to students who are trying to balance their education among other responsibilities.
Community colleges also should take advantage of the shift in virtual learning environments by attracting savvy students from four-year institutions who are looking to take classes in a more affordable and perhaps more convenient manner. This can be a terrific benefit for both the institutions and the students, provided the credits will transfer.
Taking a critical look at how resources are aligning with student and market needs can take the form of objective assessments in a variety of areas. For example, alignment at the intersection of in-demand workforce skills and degrees, and institution academic strengths delivered in a modality and frequency that meets the needs of the target student population is critical. This requires an in-depth look at how programs are marketed to students, what tools are available to help students navigate degree and program requirements, when and how courses are offered and what interventions might be necessary to improve persistence, as well as ensure that resource allocations for those programs and supports allow for a balanced institutional fiscal position.
In considering the fiscal health of the college, leaders should also explore innovative and transformative options, including:
- Collaborating with other community or technical colleges (or four-year institutions) to create a shared services relationship that could revolve around academics, student support services or other institutional support functions such as information technology, human resources or finance
- Restructuring academic offerings to address specific regional workforce needs. For instance, colleges can offer specific programs that local companies need employees to take to enhance their competencies in key areas
- Partnering with companies for critical work-related technology or simulation investments or shared facilities to advance experiential experiences that closely mirror work realities
- Revamping technological capabilities to facilitate clarity on the path to a specific degree. For instance, develop a self-service platform for students that outlines the various directions they can go on their academic journey and guides them through their options every step of the way to enhance initial enrollments and improve persistence (if alternative options are sought due to a change in circumstances)
In summary, our guidance for community colleges is simple: Disrupt or be disrupted. Do not stand still and get shipwrecked by enrollment, affordability and ROI challenges that have effective and proven solutions. Think outside-the-box, be innovative and strongly consider seeking help from experienced higher education resiliency professionals.