Back
2020 was a massively disruptive year for the higher education sector, and unfortunately, 2021 is looking like it will be another challenging year. Faced with unprecedented financial losses, higher education institutions have no choice but to embrace innovation if they desire to recoup some of these losses and position themselves properly to make financial gains in the future.
The higher education sector is struggling. The average aggregate decline in revenues across 2020 and 2021 is estimated at a conservative yet dramatic 14% [1]. This number will increase if state legislatures reduce their higher education budgets in response to budget cuts and financial losses of their own. The total losses for higher education are estimated to add up to a whopping $183 billion [2].
The most considerable aspect of these losses is attributed to revenue. Revenue is typically composed of tuition, government support, endowment returns, auxiliary operations, and philanthropy. Due to the pandemic, these five revenue sources are not producing nearly enough capital. Specifically, tuition, government support, and auxiliary operations are immensely under-producing. Resulting in massive furloughs, layoffs, pay and benefit cuts, and holds on spending.
Tuition revenue is declining. This is due to lower enrollment levels and universities cutting tuition prices. This spring, enrollment of traditional-aged students 18-24 fell by 5.3%, and overall enrollment is down 4.5% [3]. Community colleges are taking an especially hard hit on enrollment levels, with enrollment down 9.5% from a year ago [4]. In an attempt to draw in more students, many institutions have either frozen or cut tuition levels. Both of which result in a loss since typically tuition rises 3-5% every year to account for inflation [5].
Auxiliary expenses are one of the hardest-hit areas, especially for larger institutions that rely on revenue from housing, dining, and spending, like on athletic program events. The shutdown of campuses hit this section of revenue hard and continues to struggle even as campuses reopen. As previously mentioned, government support is also taking a hit due to the need to balance their budgets and recoup losses from Covid-related expenses.
Higher education institutions' response to counteracting the deficit is to slash spending, causing the higher education workforce to shrink between 337,000 and 500,000 workers since the pandemic began. Much of this statistic appears to be temporary furlough arrangements; however, 38% of institutions have announced formal layoffs. Either way, hundreds of thousands of high education workers are currently out of work and cannot find new positions because 75% of institutions have instituted a hiring freeze. Of those still working, 52% of leadership and staff have received pay and benefit cuts. The majority of these actions are necessary to keep higher education institutions above water. However, slashing spending is not the only way to recoup losses [6].
As we enter 2021, higher education leaders realize that just cutting costs will not provide the revenue needed to return their institutions' financial health. Leaders recognize that they must differentiate their institution in new ways and offer unique value to their student and alumni bodies. This differentiation includes long-term strategic investments into innovative solutions by expanding and diversifying their online education offerings. This will provide new revenue streams and enable global access to their institution.
Innovative options for higher education institutions to consider include offering:
These innovative online revenue streams can put your university back in the black.
How Can Your University Launch an Online Learning Platform for Your Students Easily and Quickly?
Innovative long-term investments that will provide your university with additional resilient revenue streams have a common factor – they are delivered online. During the pandemic, when most universities saw declines in enrollment, universities with 90% of their students online saw a 7.1% increase in enrollment [7]. Online education is scalable, adaptable, and resilient. Investing in an online learning platform at your university is the smartest decision you can make. The digital transformation of the sector is underway, and now online learning is becoming a central pillar of education rather than an afterthought. It is time to invest in an online learning platform that is flexible and robust enough to offer numerous revenue streams. The right online learning platform will provide your university with the ability to recover from the recent losses and thrive financially in a world that is more reliant on digitalization every day.
An online learning platform should have these key features to serve your university best:
With an online learning platform, your university can break away from the pack, attract students and strengthen your alumni network. Innovation is desperately needed and sourcing an online learning platform is the easiest and quickest way to do it. It is also the most cost-effective and is worthy of investment. Build revenue and get your staff back to work.
Amesite Offers a Single, Easy to Use, Scalable Solution
Launch an online learning platform to build resilient revenue streams, drive enrollment, and maintain operations!
Amesite delivers a high-tech AI-enabled online learning platform, creates scalable, custom-branded learning environments, and curates content using experts in the industry that follow best practices, meeting your university's unique needs. A host of self-paced, highly engaging, and intuitive courses can be ready for your university in as little as 30 days.
Amesite can provide your university with numerous revenue streams using turnkey, intuitive micro-credentials, summer camps, and alumni upskilling programs, as well as traditional online course curriculums. All of which require no training to use and allow your university to take full advantage of the immediate needs that these programs satisfy. Amesite is a budget-conscious choice because the is no investment in IT staff or training required to use the platform.
Amesite's system uses established social media formats to help learners access the content in a familiar setting. These mechanisms streamline the learning process. Amesite's platform also gives users the experience of learning with a community, a valuable addition to the online education experience. Engaging features like video chat and live streaming connect instructors and other students virtually to enhance and solidify learning. Amesite has an outstanding and industry-leading 98% retention rate.
A partnership with Amesite is an investment into your university's future. Request a Demo!
Check out some of our customer success stories: The Henry Ford, Wayne State University.
Don't forget to subscribe below and follow us on social to be the first to know about new resources, updates, news, and more! Find Amesite on: Twitter, Facebook, LinkedIn, and Instagram!
Resources:
[1] Chronical. Feb. 5, 2021. How Much Has Covid Cost Colleges? $183 Billion. https://www.chronicle.com/article/how-to-fight-covids-financial-crush Accessed April 13, 2021.
[2] Chronical. Feb. 5, 2021. How Much Has Covid Cost Colleges? $183 Billion. https://www.chronicle.com/article/how-to-fight-covids-financial-crush Accessed April 13, 2021.
[3] Inside Higher Ed. March 11, 2021. Can't Afford Not To. https://www.insidehighered.com/views/2021/03/11/colleges-should-invest-new-initiatives-even-these-financially-challenging-times Accessed April 5, 2021.
[4] Forbes. March 11, 2021. College Enrollment Declines Have Continued This Spring. https://www.forbes.com/sites/michaeltnietzel/2021/03/11/college-enrollment-declines-have-continued-this-spring/?sh=28b75e185aca Accessed April 5, 2021.
[5] Chronical. Feb. 5, 2021. How Much Has Covid Cost Colleges? $183 Billion. https://www.chronicle.com/article/how-to-fight-covids-financial-crush Accessed April 13, 2021.
[6] Chronical. Feb. 5, 2021. How Much Has Covid Cost Colleges? $183 Billion. https://www.chronicle.com/article/how-to-fight-covids-financial-crush Accessed April 13, 2021.
[7] Forbes. March 11, 2021. College Enrollment Declines Have Continued This Spring. https://www.forbes.com/sites/michaeltnietzel/2021/03/11/college-enrollment-declines-have-continued-this-spring/?sh=28b75e185aca Accessed April 5, 2021.