Is Leaner, Smarter Academic Administration Possible?

Survival of the fittest

I once engaged in a heated debate with the new dean of the business school and the university's Chief Financial Officer (CFO) over a proposed 25 percent increase in the joint PharmD. /MBA program. They argued that the business school needed more revenue, and since these students were already enrolled, they asserted that they probably would not resist the increase. I responded that these students were already paying full tuition and fees without any discounts or scholarships. We were asking students who were already taking on significant debt to take on even more so that the business school dean would have more discretionary income.

I came prepared. I surveyed the enrolled students and asked how many would drop out rather than pay the 25 percent increase in tuition. All but two indicated that they would drop out and wait until they were gainfully employed as pharmacists before pursuing the MBA, and probably incur less out-of-pocket expense since some would receive help from employer-sponsored educational opportunities. I prepared and shared a chart reflecting my calculations of the reduced revenue that the business school would receive if it raised the tuition costs and stated that this is a classic case of elasticity of demand. If you raise the price of a good or service when substitutes exist or when it is more costly than the perceived benefit, the buyer will forego the purchase. The dean and CFO became increasingly irritated, and, finally, the CFO said, Why can’t you just cooperate?? I responded, I am cooperating. I am looking out for the best interests of the students and the university. Several days later, the business school dean, after reflecting and probably consulting an economics textbook, dropped the plan.

Higher education institutions operating in competitive markets—where substitutes like vocational programs, online certifications, and early job placement are abundant—face more elastic demand. These institutions must tread carefully with pricing strategies, as students have greater freedom to choose alternative pathways to careers.

In contrast, universities with unique programs, strong reputations, or loyal alumni bases enjoy more inelastic demand. These schools can sustain higher tuition prices but face different challenges: increased scrutiny of their endowments, potential taxation, and reductions in indirect cost recoveries on grants and contracts.

What’s becoming increasingly clear is that college-age students today have more options than ever before. University leaders, including business school deans, must adapt to new realities and replace traditional models with agile, innovative strategies.

This moment reminds me of Newton’s First Law of Motion—but not in the way most people might think. The law states: An object at rest stays at rest, and an object in motion stays in motion at the same speed and direction unless acted upon by an unbalanced external force.

Higher education, like an object with inertia, resists change. It stays on its usual path until economic, demographic, or technological changes force it to adapt. And even then, the change can be painfully slow.

Picture a tightly racked set of pool balls. They remain perfectly still—until a cue ball, set in motion by a player’s hand, strikes them. Suddenly, everything changes. Directions shift. New collisions emerge. The entire system is reset.

Today, higher education faces its cue ball moment. A host of external forces—financial, technological, societal—are challenging its status quo. University leaders must act swiftly and strategically to reshape their institutions.

Failure isn’t an option—until you’ve run out of options.

The sobering state of the academy

The Federal Reserve of Philadelphia recently completed a comprehensive study of mergers and closures in higher education using historic data and artificial intelligence modeling to project future closures. The findings were sobering.

They acknowledge that enrollment declines observed in failed institutions are often blamed on what is referred to as the demographic cliff in higher education (i.e., the decline in the number of high school graduates). This has undoubtedly contributed to enrollment declines, but it is not the whole explanation. The National Center for Education Statistics reported that the overall immediate college enrollment rate in 2022 was not measurably different from the rate a decade earlier in 2012 or from the rate in 2021. The impact of the lower birthrate and resulting decline in high school graduates is not projected to begin having an impact until fall 2025.

The enrollment crisis is not solely due to demographic trends. Cultural and economic factors—such as skepticism about the return on investment of a college degree—are already playing a major role. The demographic cliff will compound these issues, likely pushing more institutions to the brink of solvency.

While it is difficult to track closures, mergers, and acquisitions, one source that lists data for individual colleges and universities is the Hechinger Report. The report observed in December 2024 that nearly 300 colleges and universities offering an associate degree or higher closed between 2008 and 2023. For-profit operators ran more than 60 percent of those.

Here's what the data that is available from credible sources suggests:

• Overall Trend: The rate of college closures and mergers has generally increased, especially in recent years, among small (under 1000 FTE students) institutions. Financial instability, declining enrollment, and changing demographics are key drivers.

• For-Profit Institutions: For-profit colleges historically accounted for a significant portion of closures. Many of these were smaller campuses or branches of larger systems.

There has been increased tracking of public and private nonprofit institution closures and mergers since around 2016. There is growing concern that the number of mergers, acquisitions, and closures will accelerate in the coming years as the financial stability of colleges and universities faces greater uncertainty. One estimate suggests roughly 40 unique institutions (excluding branches) closed in 2023-24, divided between for-profit and nonprofit colleges. In the first half of 2024, approximately one higher education institution per week announced its closure or merger. A model by the Federal Reserve Bank of Philadelphia in December 2024 estimated that up to 80 colleges could close in 2025 due to financial distress.

Moody's recently downgraded their outlook for the higher education sector from stable to negative. They, like other credit rating agencies and the Federal Reserve, assess the financial health of various entities, including higher education institutions. Their ratings show the creditworthiness of a university or college, impacting its ability to borrow money and the interest rates it pays on debt. While Moody's previously had a stable outlook for higher education in 2024, there are indications of increasing pressures with enrollment, poor public opinion of higher education, and policy changes at the federal and state levels as contributing factors. Taxes on large endowments and caps on indirect cost recovery are two of the biggest issues facing large educational institutions.

Factors contributing to the negative outlook for higher education

While there are a number of factors that are outside the control of higher education leaders (e.g., politics, accreditation, reliance on international students, and increased borrowing costs), I would like to concentrate on factors over which they may have more control.

• Competitive landscape: The increasingly competitive higher education landscape, along with a focus on affordability, can curtail net tuition revenue growth for many universities. The number and types of competitors are growing daily, and they are not coming from the old for-profit sector. High-tech companies are creating educational initiatives that better serve their businesses’ needs.

• Public perceptions of the value of higher education: Gallup found in 2023 that only 36 percent of Americans have a great deal or quite a lot of confidence in higher education, down about 20 percentage points from 2015. This extends to state and federal legislatures that are increasingly questioning the value of higher education and acting accordingly by reducing financial support and encouraging measurable changes.

• Declining enrollment: This is a significant concern as it directly impacts tuition revenue, a primary source of income for many institutions. It may be more than simple demographics (e.g., the demographic cliff). It may be a combination of factors, including the two listed above.

• Constitution of the academic workforce: The number of tenure-track faculty has declined sharply, either through reductions in force or targeted retirements. This has been done as a cost-cutting measure, but the result has been instability in the faculty ranks and faculty who are not expected to fulfill academic roles (e.g., career guidance, mentoring, or committee assignments). Correspondingly, the number of adjuncts and part-time instructors has increased, with a slow erosion in the perceived quality of instruction. There has also been a growing tendency for the growth of administrative staff with no instructional responsibilities. This has been euphemistically referred to as Administrative Bloat.

Competition Landscape - The student recruitment landscape is now a multi-sector contest, where flexibility, affordability, and career outcomes are the major differentiators. Traditional colleges are no longer competing just with each other—they're up against tech companies, employers, global universities, and credential startups. The days of losing students to for-profit institutions are largely over, replaced by much more sophisticated and agile competitors.

One such competitor that I mentioned in a previous blog post comes in the form of institutions like Southern New Hampshire University (SNHU), Western Governors University (WGU), and Arizona State University Online, all of which offer large-scale, flexible degree programs. They market themselves as a flexible option to the typical student in the seat, fixed academic year approach.

They also must compete with Online Program Managers (OPMs). Companies like 2U, Coursera, and edX partner with traditional universities to expand online offerings and aggressively recruit students.

Finally, one of the fastest-growing sectors is Skills-Focused Learning programs offered by major technology companies, including Google Career Certificates, IBM Skills Academy, AWS certifications, LinkedIn Learn, and Microsoft Learn. All offer industry-recognized credentials. Similarly, major corporate initiatives are gaining traction either through collaborative partnerships with selected universities that can fulfill their desire for fast and targeted learning or independently through corporate-sponsored scholarships to selected universities and programs offering workplace certificates.

These programs offer targeted learning that focuses on skills that employers value and will reward with positions or promotions. They do not reflect the knowledge is good mindset of classical education, and their approach is meeting with approval from parents and legislators. The response of traditional educators has been to dismiss the approach as pedestrian and to ignore their impact. Unfortunately, their intransigence is costing them students and, by extension, revenue.

The solution would be to carefully examine the demand for certain majors and to adjust and shorten the coursework required to fulfill the degree requirements through innovative and creative course and curricular design. An example of this approach is Purdue University’s Degree in 3 Program. The website tagline says it all: Accelerated, Economical, Uncompromised. Purdue offers select majors (e.g., in Liberal Arts, Communication, and Business) that students can complete in three years instead of four, without sacrificing academic quality or requiring summer school.

Another potential strategy is to join the growing number of colleges and universities that have developed procedures to give credit for prior learning. Nearly half of the institutions surveyed last year by the American Association of Collegiate Registrars and Admissions Officers (AACRAO)said they have added more ways for students to receive these credits. Part of the push has come from employers and policymakers who are demanding that colleges expedite the production of graduates with the skills required in the workforce, including granting more students credit for their prior learning. Artificial intelligence has significantly improved the ability of admissions coordinators to determine the relevance and credits for which a student is qualified. The growth of certifications for skills-focused learning from professional organizations such as Amazon Web Services and the Computing Technology Industry Association, or CompTIA, has helped, too. States with large military populations are especially encouraged to develop effective procedures for allowing discharged service members with valuable skills to gain academic credit for those accomplishments, saving them time and money. Online behemoths like Western Governors University and Southern New Hampshire University are way ahead of traditional colleges in conferring credit for experience and promoting that competitive edge to target audiences.

Key Strategies Used

• Curricular redesign: Departments carefully reviewed and streamlined degree requirements, identifying overlapping or redundant content, and redesigning sequencing. This includes allowing credit for prior learning.

• Focus on in-demand majors: Majors with strong career pathways or declining enrollments were prioritized to align better with student demand and workforce needs.

• Innovative scheduling: Courses are scheduled more efficiently, including expanded offerings during winter sessions and flexible credit pathways (e.g., AP, dual credit, online options). This may extend to traditional college campuses, which are largely deserted during the summer months.

• Student Advising: Customized advising ensures that students remain on track to graduate early while meeting all learning outcomes. Combine this with career counseling that raises the student’s awareness of what employers are expecting from graduates.

Public perceptions of the value of higher education – The mainstream media are constantly filled with headlines and in-depth articles exploring the growing disillusionment of the public with higher education. The most consistent and revealing are the surveys conducted by the Gallup Organization. The organization first began including higher education in its annual survey in 2015. In that first survey, the organization reported that 57% of the respondents had a positive opinion of higher education. In the most recent survey (2024), the response resulted in only 36% responding positively. The perception is that higher education has strayed from its mission of education and ventured into controversial cultural issues that run counter to opinions held by large segments of the population, including parents.

Key Strategies Used

Correcting such a precipitous decline is difficult. The concerns typically fall into two (2) categories: high cost/relevance and campus culture. I will focus on the cost aspect shortly, but the campus culture aspect has recently caused the resignation or non-reappointment of several high-profile university presidents.

· University of Virginia – James E. Ryan (Resigned July 2025)

· Harvard University – Claudine Gay (Resigned Jan 2024)

· Valparaiso University – José Padilla (Contract not renewed)

· Oklahoma State University – Kayse Shrum (Resigned Feb 2025)

It typically involves questions of fiscal mismanagement, discrimination, and a lack of candor on the part of the administration. These high-profile leadership shake-ups resonate with public concerns about

• Misaligned priorities (e.g., bureaucracy over academics)

• Cultures of excess or bias (arising from ideological warfare)

• Lack of accountability in how universities operate and fund themselves.

Confidence in higher education has declined for a variety of reasons, particularly because many perceive those in leadership positions—presidents, trustees, senior administrators, and even faculty—as failing to uphold key standards.

While this may be an over-generalization, a quick review of recent headlines tends to support the observation that parents and legislators do not feel that colleges and universities have been the beacon of light that many profess to be. They have allowed problems to be ignored and have not created effective strategies for dealing with them. It almost seems like university presidents need a crash course in crisis management (not crisis communication) before the issues erupt. Many wait until the issue spirals out of control, and then they take cover behind a spokesperson who attempts to manage the situation, usually to no avail.

The solution is candor. The President (not their spokesperson) must speak clearly about the values that make the institution a place where parents would like their children to be educated. The parents may not agree with the viewpoints, but if they are well developed and explained, there is at least the perception that the university leaders are taking responsibility for the conduct of their students and faculty and are seeking to resolve honest differences.

High cost/relevance - The perceived lack of trust that higher education receives is also the basis for proposed changes in the regional accreditation process to make higher education institutions more accountable to their constituents. In May 2025, the current administration issued a widely anticipated Executive Order (EO) making it easier for higher education institutions and states to change regional accreditors. In a statement announcing the order, U.S. Secretary of Education Linda McMahon stated, We must foster a competitive marketplace both amongst accreditors and colleges and universities in order to lower college costs and refocus postsecondary education on improving academic and workforce outcomes for students and families.

One effort that is garnering a lot of interest is the Florida Performance-Based Funding Model. The initiative combines aspects of workforce readiness with institutional performance evaluation. Essentially, the state would add an emphasis on the outcomes of the educational process to the existing accreditation approach, which emphasizes structure and process. The goal of the model is to prioritize economic outcomes and tie higher education to the needs of the job market. It supports withholding funding from low-value degrees based on gainful employment metrics and aligns with broader federal and state accountability trends.

Leaders in states like Florida and Texas argue that existing accreditors (e.g., SACSCOC) do not sufficiently emphasize outcomes-based accountability. They want accreditors who will

• Support programs with clear economic value

• Pressure institutions to phase out low-performing programs

• Avoid penalizing institutions for vocational focus or non-traditional pathways.

Preston Cooper, in an article in Forbes criticizing the existence of degrees that lead to unemployment, observed, These programs shouldn’t get taxpayer money, and probably shouldn’t exist at all. . He essentially echoed the sentiment of parents and legislators who feel that taxpayer (and parent) funding should not be used to support programs of study that don’t result in meaningful outcomes (e.g., employment).

Key Strategies Used

Higher education leadership should prepare for increased scrutiny by trustees, alumni, parents, and legislative bodies. They may also have to revise their business model to emphasize outcomes, rather than faculty qualifications and new buildings. Development of new data collection strategies that, by necessity, extend out into the post-education experience may become commonplace. The very survival of the institution may rest on how well administrators justify their role in the development of an important segment of society.

Declining Enrollment

All these changes are playing out against a backdrop of declining enrollment in traditional higher education. Declining enrollment in higher education is a complex issue that extends beyond just demographic shifts. While the demographic cliff (i.e., the projected decrease in the number of college-age students due to lower birth rates in the early 2000s) is a key factor, it's only part of a broader, multifaceted challenge. The Western Interstate Commission for Higher Education (WICHE) projects that the total number of high school graduates will peak in 2025 before entering a period of steady decline through 2041, attributable to fewer births 18 years prior. Ultimately, the nation is projected to see a 13% decline from the peak through the end of the projections.

There are projected to be fewer high school graduates, particularly in the Northeast and Midwest. The South and Southwest may see growth from regional migration and immigration from other countries, but that looks increasingly unlikely as the current administration strengthens border controls, moves to withdraw F-1 visa support, and tightens restrictions on international student enrollment. These policy shifts may significantly impact higher education institutions that have traditionally relied on international students to offset enrollment declines and generate tuition revenue, particularly in graduate programs and STEM fields.

Colleges and universities — especially those that rely heavily on tuition revenue — will find themselves competing for a smaller pool of students. As the pool of domestic high school graduates shrinks — most notably in the Northeast and Midwest due to aging populations and declining birth rates — colleges and universities face mounting pressure to adapt. While the South and Southwest were once seen as buffers due to population growth, that potential is now uncertain due to changes in immigration policies. Higher education leaders must therefore rethink recruitment strategies, enhance retention, consider expanding adult and online education programs, and pursue new partnerships or mergers.

Higher education leaders today face a pivotal moment. The demands of students, the workforce, and technology have evolved rapidly, but many institutions remain anchored in outdated models of curriculum delivery. Despite increasing calls for innovation, few have meaningfully modernized their approach. Hybrid learning, flexible pacing, and short-term credentials—now essential in a competitive, skills-based economy—are often adopted in a piecemeal or inefficient manner.

Leaders must urgently rethink how education is delivered, not just what is taught. They are in the knowledge transfer business, but their methods are outdated. Institutions that fail to embrace agile, student-centric delivery models risk losing relevance. Conversely, those that take a proactive, well-executed approach to modernization will be better positioned to serve diverse learners, build stronger industry partnerships, and thrive in an increasingly competitive landscape.

Key Strategies Used

To address declining enrollment, institutions may need to

• Diversify revenue streams beyond tuition.

• Strengthen community partnerships by developing shared programs of study with nearby institutions and better aligning their curriculum with potential employers.

• Offer more flexible, modular, and career-aligned programs, including micro degrees and stackable certificates

• Leverage the enormous power of artificial intelligence (AI) and virtual reality (VR) to deliver scalable, personalized instruction tailored to each learner’s needs, unlocking the promise of truly individualized education at scale.

Constitution of the academic workforce

The academic workforce has evolved gradually since I first entered the academy. Early on, administrators primarily served to coordinate faculty and implement their recommendations. Faculty Governance meant genuine participation through senates and committees, where faculty influenced decisions on curriculum, hiring, and institutional policy.

At that time, faculty appointments were divided between tenure-track and non-tenure-track positions—a distinction that carried real weight. Tenure-track faculty were expected to earn the respect of their peers through excellence in teaching, scholarship, and service. Teaching was valued, unless you were at a research-intensive university, where it quickly became secondary to scholarship, especially in terms of securing grants and publications. I still recall a dean advising me to, Only teach enough to be called a teacher. Your real role here is to bring in research dollars (and overhead).

Non-tenure-track positions were not regarded as true faculty roles, and they foreshadowed today’s widespread use of adjunct faculty positions, often lacking the job security, compensation, and influence of their tenure-track counterparts.

The growth in the number and type of administrative personnel is truly astonishing. When I joined the academy, the ratio of support staff to faculty was 1:1. In the most recent data, the ratio has exploded to 3.5:1, and many of the academic faculty are part-time and adjunct status. The expense of creating the academic bureaucracy has grown as well. Focusing on public four-year institutions, the percentage of total budget devoted to instruction has steadily declined while the corresponding portion consumed by administrative and support services has steadily increased. Student services, another non-instructional position, has also increased, largely as a result of the expansion of services, including mental health counseling. Across both public and private nonprofit institutions, institutional expenses have climbed more steeply compared to instructional expenditures.

Key findings

• Instructional Spending: Both public and private nonprofit universities allocate a similar portion of their budgets to instruction.

• Non-Instructional Spending: Private nonprofit universities tend to spend a higher percentage on non-instructional activities, such as institutional support and student services, as compared to public universities.

• Administrative and support services have grown modestly, reflecting concerns about administrative bloat.

• Student services spending has increased, likely due to rising demand for mental health, career, and DEI support.

• Private institutions tend to spend a larger share on institutional support (administration, legal, and fiscal operations), which is often cited in discussions of administrative bloat.

• Public institutions allocate more to research and public service, reflecting their broader public missions and state funding incentives.

Key Strategies Used

There are no easy solutions to such a complex issue. College and university presidents feel compelled to add administrators because of the complexity of the modern academic institution. Some of it is risk management, but some is to spread the work over individuals who have the skill and time to effectively manage any issues that arise. There is, however, administrative bloat, and that needs to be addressed.

University administrators are exploring a mix of strategic, technological, and operational approaches to reduce costs without compromising academic quality. Here’s a breakdown of what’s happening across campuses.

Strategic Restructuring

• Streamlining administrative processes: Colleges are using Lean and Six Sigma methods to simplify workflows. For example, one institution reduced its enrollment process from 111 steps using 30 technologies to just 35 steps and 16 technologies.

• Reevaluating staffing models: Some are reducing professional non-teaching staff and consolidating roles to curb administrative bloat.

Technology-Driven Efficiency

• Modernizing Enterprise Resources Planning systems: Replacing outdated infrastructure with cloud-based platforms helps automate tasks and reduce manual labor. The goal of effective ERP systems is to make back-office procedures more systematic and efficient.

• Digitizing paperwork: Moving from paper-based systems to digital recordkeeping saves money on supplies and staff time. As a former dean (administrator), I can attest to the volumes of printed and electronic media that are needed to track the performance of a single college of pharmacy. One university with which I have been associated recently moved the university fact book, containing data from all aspects of the university, online and accessible from a dashboard. In doing so, they made an important 500+ page reference database searchable and usable.

• Operational: Institutions are adopting tools to monitor fraudulent applications and streamline operations, saving millions annually. They can also significantly improve the Customer Relationship Management (CRM), otherwise known as the admissions process. It is how you empower your staff to provide a personalized approach to customer interactions throughout the student experience and eventually the alumni experience.

Another significant shift in higher education is the move from full-time, tenure-track faculty to adjunct and contract-based instructors. While substituting part-time adjuncts for full-time faculty may offer short-term cost savings, it comes with long-term systemic costs. Adjunct faculty are less likely to engage in traditional academic roles such as mentoring and advising students—roles that are essential for developing the next generation of leaders. Lacking job security and the assurance of contract renewal, adjuncts are also less inclined to experiment with innovative or creative course design.

At the same time, increased regulation and evolving cultural expectations have expanded the role of administrators in institutional governance. As a result, colleges and universities have become increasingly dependent on adjunct and contract-based employees to deliver academic instruction. Data on support and ancillary personnel in the diagram below illustrates this trend, highlighting the steady rise of adjunct faculty as a core component of the academic workforce.

In 2024, the American Association of University Professors (AAUP) released a report expressing profound concern over the ongoing transformation of the academic workforce—from a community of scholars to one increasingly composed of adjunct and at-will employees. The report warned of the significant risks involved in replacing experienced, tenured faculty with non-tenure-track and part-time instructors. This shift, the AAUP argued, results in the loss of institutional wisdom and academic perspective, and creates an environment where faculty may avoid innovation or controversial ideas out of fear of losing their teaching positions. According to the AAUP, such changes undermine academic integrity and threaten to diminish the quality of education.

One proposed—but controversial—response to concerns about faculty performance is the implementation of post-tenure review. In a 1996 position paper, Christine Licata and Joseph Morreale argued for the adoption of a more rigorous evaluation system than the standard annual performance review. Although the AAUP initially opposed this idea, citing previous failures and concerns that it would erode the value of tenure, Licata and Morreale proposed a structured, developmental model aimed at constructive evaluation rather than punitive oversight.

Their framework gained traction, and by 2000, 37 states had adopted some form of post-tenure review, often influenced by Licata and Morreale’s approach. Despite continued debate, this model has started to shape legislation and institutional policy, representing a significant evolution in how tenured faculty are assessed.

In 2005, recognizing the growing prevalence of post-tenure review and the value legislators in most states placed on the strategy. AAUP revised its original position opposing the policy and issued the following guidelines that should serve as a blueprint for administrators considering adoption of the policy.

• Be aware that selective post-tenure review evaluations (as opposed to periodic ones) may raise the specter of impermissible age discrimination.

• Post-tenure-review policies should be developed and implemented by faculty members.

• Resources should be allocated to support the professional development of faculty under such policies.

• Such policies should provide an opportunity for faculty members to comment and respond to such evaluations, as well as an appeals procedure by which faculty may challenge such evaluations.

• Successful post-tenure-review policies should reaffirm an institution's commitment to academic freedom and tenure; establish and apply standards consistently and fairly; and educate participants in the process, including department chairs and deans.

Summary

I have touched on many of the salient issues that are dominating the conversation in college and university circles. There are no easy solutions, just potential strategies. It is up to the leaders of the institution to select the best strategy for them, but inertia is not one of them. Longing for the good old days is self-indulgent. What is needed is a crop of new leaders with fresh perspectives, and we may be getting them. A recent survey by the American Council of Education found that the average length of tenure of a college president is shorter than that of a CEO in a Fortune 500 company. The CEO serves an average of 6.9 years, while the tenure of an average college president is 5.9 years and declining.

The bottom line is that the leadership of colleges and universities needs to adapt and be more agile if they are to survive. A recent U.S. News Commentary expressed this point clearly.

Over the next few decades, we will have to adapt to wrenching change. The time has come to take a more serious look at how we do higher education, and whether the models we’re using which were mostly designed between the late 19^th and the mid-20^th century, are still the best way to prepare our young people for a future that is likely to be very different from even the recent past, and to enable them to play meaningful roles as both engaged citizens and productive participants in a rapidly shifting economy and world.