President Obama Just Crushed Your College’s Strategic Plan Now What

President Obama state of the union address on college tuitionDid you catch President Obama’s State of the Union address earlier this week? The one where he crushed your college’s strategic plan. In case you were busy and haven’t yet seen any of the analysis in the news let me share an excerpt of President Obama’s remarks with you here.

Wow! Did you hear that?

“If you can’t stop tuition from going up. The funding you get from taxpayers will go down.”

President Obama mentioned keeping costs down and noted some colleges were doing that by redesigning courses and using better technology. But is that enough? Would it be enough on your campus?

My impression overall was President Obama was focused on public institutions with this message. That’s based on his comment regarding making higher education a priority in state budgets.

Tuition and Budget Cuts

Let me see if I have the calculus right on the context for President Obama’s vision for higher education.

  • State revenues are still lagging all over the country
  • Unfunded liabilities from pensions and health benefits are still going through the roof
  • The accounting for unfunded liabilities is a about to change which will hurt budgets
  • Institutional revenues from the state funding streams is declining due to budget cuts
  • Institutional revenues from property taxes is declining or at best not increasing
  • Total cost of labor including benefits, ~80% of all operating budgets, are increasing
  • Non-labor costs are increasing

Like they say in Maine – “You can’t get there from here.”

I am just thinking about my own state. If we froze tuition, with no increases in revenue from property taxes for the technical colleges and a new request for additional cuts from state revenues in the university system, the only options would be to start cutting ancillary and support services. That is unless you could achieve a major wage and benefit concession from all employee groups, which given the current recall efforts that’s unlikely.

That is not to say it is not possible. But if the goal is to eventually lower tuition I just don’t see how you get there on tuition without states totally overhauling state funding formula’s and state revenues.

I know President Obama didn’t say it, but I am detecting the foundation for the argument that higher education is a ‘right’ as with K-12 which would really affect the funding model.

Strategic Plan

Now about that strategic plan. Did you contemplate or plan for radical changes in outcomes or revenue models? What about cuts to federal funding which the White House has yet to explain just what President Obama meant by “funding you get from taxpayers” in terms of budget cuts.

This is exactly the reason why strategic planning needs to incorporate scenario planning. So that you contemplate the possible futures and develop strategies for them. In this case, every institution should already have ambitious or even aggressive financial health initiatives underway just in case the current economy persists or worsens.

So any adjustments needed if President Obama implements this change administratively through the White House and DOE, bypassing Congress, you can absorb it. Your strategy might even be to jack up tuition now through board action so you can establish your reference tuition rate ahead of any new rules.

IT Strategic Plan

For CIO’s, it may be time to really buckle up for some major budget cuts. Your IT strategy and IT strategic plan may need an entire overhaul if President Obama does get his way. Which means you better plan for the worst.

Reassess your current fiscal year budget and project portfolio against the backdrop of major budget cuts and those things that produce hard dollar savings. You will need these savings to avoid other cuts. What reallocation can be made in your staff capacity or funds to go after additional hard dollar savings that have the shortest payback periods and highest IRR?

Once you have some ideas on adjustments, vet some of the options one-on-one with the IT Governance committee members. Then convene the whole committee.

You might want to include some bold ideas like an acceleration of your plan for online course and program delivery. I don’t mean going from 2% to 6% in online or hybrid. I mean a plan for a significant amount of progress that would enable the tuition to remain flat.

Similarly, you might want to have a plan for an alternative course scheduling model that produces a maximized room utilization. This could be the basis for shutting down a remote campus or closing some buildings at night to save on operational costs and maybe even delaying construction projects.

The idea here is what is possible if you use cost and space utilization in your scheduling model rather than faculty preference as the primary factor?

Now is not the time to be selfish and spend down your budget on pet projects. Use this opportunity to show real leadership by coming forward with options of how IT can help. Maybe that means a shift in policy for BYOPC (BYOD) or changes in technology fees.

There are two points here. First, this ought to be a lesson on strategic planning to anticipate possible futures with environmental scans. Second, don’t put off to tomorrow what you can do today.

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4 Responses to President Obama Just Crushed Your College’s Strategic Plan Now What

  1. Pingback: President Obama Continues Hammering on College Tuition

  2. Pingback: Rising Student Debt and College Tuition Infographic

  3. Jose Paulding says:

    Whenever somebody or perhaps a business decides that success may be attained, progress stops.
    The invisible hand from the market always moves faster and much better compared to the heavy hand of government.

  4. The Higher Ed CIO says:

    I am in complete agreement. But there are times when the government moves with stealth like actions which is sometimes thought of as good old fashioned misdirection.

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