Rethinking Strategies for Struggling Colleges (Part II)
Robin Capehart
May 7
Last week, Limestone College added its name to the nearly one-per-week list of colleges closing across American. The pattern of college closures across America reveals several reactive strategies that consistently prove ineffective in achieving long-term sustainability: budget cuts and layoffs; emergency funding dependencies; reactive mergers and acquisitions; and lowering academic standards.
In Part 1, we discussed these traditional strategies pursued by colleges and universities experiencing financial trouble.
Now, in Part II, we suggest principle-centered strategies that are often are found outside traditional academic thinking.
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Niche Programs
In attracting students who want to learn, you have to give them a reason to climb over six other institutions to get to yours.
One potential path for struggling colleges to attract these students is to focus on developing niche programs that cater specifically to local community needs or underserved fields. By identifying unique areas where they can excel, smaller colleges can differentiate themselves in an increasingly competitive higher education market.
For example, institutions located in regions with a strong presence of specific industries, such as healthcare, technology, or manufacturing, could design programs that directly align with the skills needed in those sectors. According to a report by the Georgetown University Center on Education and the Workforce (2020), 65% of all jobs in the U.S. require some level of postsecondary education or training, and many of these jobs are concentrated in specialized fields such as healthcare, skilled trades, and information technology.
By tailoring their programs to meet these workforce demands, colleges can position themselves as vital contributors to their local economies while attracting students seeking relevant, career-oriented education.
This approach also allows institutions to avoid competing in the crowded and resource-intensive online education market, which is dominated by larger universities with well-established programs. A study by the National Center for Education Statistics (NCES, 2022) revealed that enrollment in online programs grew by 97% between 2012 and 2021, with most of that growth concentrated in large institutions with national reach, such as Southern New Hampshire University and Arizona State University. Smaller colleges often lack the infrastructure and marketing budgets to compete effectively in this space, making it more practical to focus on in-person or hybrid programs that serve local or regional needs.
Developing niche programs also enables colleges to fill gaps in underserved fields that larger institutions may overlook.
For example, rural areas often experience shortages of healthcare professionals, educators, and skilled trades workers. According to the U.S. Bureau of Labor Statistics (BLS, 2023), employment in healthcare is projected to grow by 13% from 2021 to 2031, much faster than the average for all occupations, driven by an aging population and increased demand for medical services.
Smaller colleges located in rural or underserved areas can play a crucial role in addressing these shortages by creating healthcare training programs, such as nursing, medical assisting, or allied health services, tailored to the needs of their communities.
Ultimately, focusing on niche programs that meet local and regional needs provides smaller colleges with a way to remain relevant and financially sustainable. By aligning their offerings with workforce demands, leveraging partnerships with local businesses, and addressing gaps in underserved fields, these institutions can carve out a unique identity and provide students with clear career pathways.
This strategic approach not only benefits the colleges but also strengthens the communities they serve, creating a positive feedback loop of economic and educational growth.
Community Partnerships
Building strong partnerships with local businesses can be a transformative strategy for colleges striving to remain relevant and competitive. These partnerships enable institutions to align their programs directly with the needs of the local job market, creating a mutually beneficial relationship between the college and the community it serves.
By collaborating with local industries, colleges can gain valuable insights into workforce trends, skills gaps, and emerging opportunities, allowing them to design programs that are not only academically rigorous but also highly practical and career-oriented.
One of the key benefits of such partnerships is the opportunity to develop tailored curricula that reflect the specific needs of local employers. For example, if a community is home to a growing technology sector, a college can work with tech companies to create programs in fields such as software development, data analytics, or cybersecurity. These programs can include input from industry professionals to ensure that students are learning the most up-to-date skills and technologies.
A report by the Strada Education Network (2020) found that nearly 80% of students prioritize employability when selecting a college or program. By aligning curricula with local job opportunities, colleges can make their programs more attractive to prospective students while meeting the needs of the regional economy.
Internships are another significant benefit of these partnerships. Local businesses can provide students with hands-on experience in real-world settings, helping them bridge the gap between classroom learning and professional practice.
According to the National Association of Colleges and Employers (NACE, 2022), students who complete internships are 20% more likely to receive a job offer after graduation compared to those who do not. Internships not only enhance students’ employability but also allow local employers to evaluate potential hires before making long-term commitments. This creates a pipeline of qualified candidates for businesses while giving students a competitive edge in the job market.
Additionally, partnerships with local employers can lead to direct job placement opportunities for graduates. For instance, some colleges have established “guaranteed interview” programs with local businesses, where students who meet certain academic and training criteria are guaranteed an interview upon graduation. This kind of arrangement benefits both parties: employers gain access to a pool of well-prepared candidates, while students feel confident that their education will lead to tangible career opportunities.
A study by the Aspen Institute (2021) highlighted the success of such partnerships, noting that colleges with strong employer connections often see higher employment rates for their graduates, particularly in high-demand fields like healthcare, advanced manufacturing, and information technology.
Beyond immediate employability outcomes, these partnerships can also enhance a college’s reputation within the community. When businesses see that a local college is actively contributing to workforce development and addressing regional challenges, they are more likely to invest in the institution through donations, sponsorships, or collaborative projects.
For example, companies might fund scholarships, provide equipment for training programs, or sponsor research initiatives in exchange for access to a skilled talent pipeline. This kind of support not only improves the college’s financial stability but also strengthens its ties to the community, fostering a sense of shared purpose and mutual benefit.
Moreover, these partnerships can extend beyond traditional industries to include government agencies, nonprofit organizations, and community groups, further broadening the college’s impact. For example, colleges in rural areas might partner with local governments to address shortages in essential fields like healthcare or education by training nurses, medical technicians, or teachers.
Similarly, collaborations with nonprofits could result in programs designed to address social issues such as housing, food insecurity, or environmental sustainability, further embedding the college as a critical stakeholder in the community.
Financial Management
Financial management is another crucial aspect of ensuring the sustainability and competitiveness of higher education institutions, particularly in today’s challenging economic environment.
Across-the-board budget cuts, while often seen as a quick fix during financial crises, can have detrimental long-term effects, such as eroding academic quality, reducing student satisfaction, and damaging an institution’s reputation. Instead, colleges and universities should adopt strategic financial practices, focusing investments on high-demand programs that align with the needs of their local communities and broader workforce trends. By doing so, institutions can not only stabilize their finances but also create new pathways for growth and relevance.
According to the U.S. Bureau of Labor Statistics (BLS, 2023), healthcare occupations are projected to grow by 13% from 2021 to 2031, adding approximately 2 million new jobs. By prioritizing such areas, colleges can attract students who are seeking stable, high-paying careers while also addressing critical labor shortages in their communities.
Another essential element of financial management is the development of sustainable business models that balance cost efficiency with quality improvement. Rather than cutting essential services or academic programs, institutions should focus on reallocating resources to areas with the highest potential for impact.
For example, investing in technology to streamline administrative processes, such as enrollment, advising, and financial aid, can reduce operational costs while improving the student experience. A report by Deloitte (2021) found that colleges embracing digital transformation initiatives achieved significant savings, with some reducing administrative expenses by 10-15%. These savings can then be reinvested into academic programs, faculty development, and student support services, ensuring that quality remains at the forefront of institutional priorities.
Diversifying revenue streams is another critical component of sustainable financial management. Many colleges rely heavily on tuition revenue, which makes them vulnerable to fluctuations in enrollment. To mitigate this risk, institutions can explore alternative sources of income, such as offering continuing education and professional development programs, forming partnerships with local industries, or engaging in public-private collaborations.
For example, colleges can partner with regional businesses to create customized workforce training programs, which not only generate additional revenue but also strengthen ties with the local economy. A study by the Strada Education Network (2020) found that 74% of working adults are interested in obtaining certifications or credentials to advance their careers, highlighting a growing market for short-term, skills-based programs. By tapping into this demand, colleges can attract nontraditional students, such as working professionals, and establish themselves as leaders in workforce development.
Institutions should also consider leveraging their physical assets to create new revenue opportunities. Underutilized campus facilities, for instance, can be rented out for conferences, community events, or corporate training sessions. Some colleges have even partnered with real estate developers to create mixed-use developments on campus, incorporating retail spaces, housing, and innovation hubs.
These projects not only provide a steady stream of income but also help foster stronger connections between the college and its surrounding community. Georgia State University, for example, has successfully revitalized its downtown Atlanta campus through partnerships that include student housing, research facilities, and commercial spaces, generating revenue while enhancing the overall campus experience.
Moreover, financial management must consider the importance of student retention and satisfaction, as these are directly tied to an institution’s financial health. Cutting services that impact the student experience, such as academic advising, mental health support, or career services, may save money in the short term but can lead to higher dropout rates and declining enrollment over time.
According to a study by the American Council on Education (2021), colleges that made significant cuts to student support services experienced a 12% drop in retention rates within two years. Instead, institutions should focus on enhancing these services to improve student outcomes and build a stronger reputation, which can attract more students and increase revenue in the long term.
In conclusion, effective financial management in higher education requires a strategic approach that prioritizes targeted investments, cost efficiency, and revenue diversification. By focusing on high-demand programs that align with community needs, leveraging technology to streamline operations, and building sustainable business models, colleges can navigate financial challenges while maintaining their commitment to academic quality and student success. Institutions that adopt these forward-thinking practices will be better positioned to thrive in an increasingly competitive and uncertain landscape.
Student Recruitment
Additionally, institutions should prioritize attracting students whose aspirations and values resonate with their academic purpose.
Historically, colleges have been established to fulfill the economic and social needs of their local communities, and this foundational purpose should guide recruitment efforts. By focusing on prospective students who demonstrate a genuine interest in the high-demand fields that the institution offers, colleges can cultivate a more engaged and motivated student body (White, 2023). This alignment not only enhances the educational experience but also increases the likelihood of students persisting through their studies and successfully entering the workforce.
To further strengthen this alignment, institutions can implement targeted outreach strategies that highlight their unique programs and the specific skills required in local industries. For instance, hosting informational sessions, workshops, and career fairs that connect prospective students with local employers can provide valuable insights into the job market and showcase the direct pathways from education to employment.
By actively engaging with high schools and community organizations, colleges can raise awareness about the opportunities they offer and attract students who are enthusiastic about contributing to their communities through their chosen fields.
Moreover, investing in comprehensive student support services is essential for enhancing retention rates. This includes providing robust academic advising, which can help students navigate their educational paths and make informed decisions about course selections and career opportunities.
Mentoring programs that connect students with faculty, alumni, or industry professionals can also foster a sense of belonging and provide guidance throughout their academic journey. Additionally, implementing wellness programs that address mental health, stress management, and work-life balance can support students in maintaining their overall well-being, which is crucial for academic success.
Creating an environment that supports students holistically not only contributes to their individual success but also reinforces the institution’s commitment to its academic purpose.
When students feel supported, valued, and connected to their college community, they are more likely to persist in their studies and achieve their educational and career goals. This, in turn, enhances the institution’s reputation and strengthens its role as a vital contributor to the local economy and society.
By prioritizing the alignment of student recruitment with institutional purpose and investing in comprehensive support systems, colleges can ensure their long-term success and relevance in an ever-evolving landscape.
And so . . .
Ultimately, the path to sustainability for struggling institutions lies not in reactive cost-cutting measures but in strategic transformation. By focusing on niche markets, building community partnerships, and innovating delivery methods, colleges can carve out a distinctive identity that attracts students who resonate with their mission. Embracing these strategies will empower struggling institutions to thrive in an increasingly challenging educational landscape (Brown, 2023).
As we move forward, it is essential for higher education leaders to rethink their approaches and prioritize quality, community engagement, and strategic growth to ensure a brighter future for their institutions.