Dive Brief:
- According to a report in Inside Higher Ed, leaders at Ohio’s Oberlin College are struggling to close a multi-million dollar budget deficit following a dip in enrollment this year.
- The liberal college’s newspaper, The Oberlin Review, published a letter written by two faculty members criticizing a salary freeze. The letter, published Friday, said faculty found it depressing that neither the college board nor administrators could come up with a better way to address the revenue shortfall other than by eliminated raises.
- The salary freeze is the latest in a string of moves by Oberlin to close the structural budget gap. The school relies too much on gifts, and not enough on tuition, room and board, according to a letter posted by Chris Canavan, the chair of the Oberlin Board of Trustees.
Dive Insight:
Colleges and universities throughout the U.S. are seeing a drop in enrollment in recent years, according to the National Center for Education Statistics. Enrollment dropped by 4% from 2010 to 2014 in degree-granting institutions, and the agency says that from 2014 to 2025 the number of students under age 25 enrolling in college will jump 13 percent, compared with 18 percent for students 25 or older as the size of high school graduating classes grows smaller.
That means higher ed institutions likely will see a dip in income. In Oberlin’s case, a group of trustees tasked with examining finances found the prestigious school relies too heavily on cash from gifts, and does not presently draw enough funding from charging students for tuition or room and board.
If Oberlin is not faring well, in terms of meeting enrollment goals, this says a lot for fate of the rest of the industry. The budget shortfalls at this top institution underscore the need for institutions of all sizes and missions to more closely examine their revenue streams and find ways to be less reliant on tuition in the face of enrollment declines and a political climate which favors affordability and will be less tolerant of raising tuition to close gaps.
