Feature Article - June 2016
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Colleges & Universities

A Look at Trends in Colleges & Universities

Revenues & Expenditures

College and university respondents continue to be faced with budget challenges, with a greater number reporting that revenues had decreased from 2014 to 2015 than the percentage who expected to see such a decrease in the 2015 Industry Report. While 5.5 percent in 2015 projected a decrease in revenues in this time period, 12.4 percent of respondents this year reported that such a decrease had taken place. Another 33.3 percent said revenues increased from 2014 to 2015, and 54.2 percent said revenues had remained the same. (See Figure 47.)

Looking forward, the percentage of college respondents who expect revenues to increase or decrease falls slightly, while those expecting revenues to remain the same increases. Some 28.3 percent of college respondents said revenues will be higher in 2016 than 2015, and 32 percent expect an increase in 2017. At the same time, the percentage expecting revenues to decrease falls to 10.6 percent for 2016, and 7.3 percent for 2017.

After reporting a 36.6 percent increase in operating expenses from 2013 to 2014, college respondents saw a slight decrease in operating expenses this year. College respondents' average operating cost fell by 1.6 percent from 2014 to 2015, from $1,820,000 to $1,790,000.

Looking forward, college respondents are expecting operating expenses to increase at a slower rate than the general survey population. While among all respondents, operating expenses are expected to increase 5.8 percent, college respondents projected a 2.6 percent increase from $1,790,000 in 2015 to $1,836,000 in 2017.

On average, college respondents report that they recover 35.5 percent of their operating costs via revenue. This compares with 49.6 percent of operating costs recovered via revenue for all respondents. Nearly one-half (49.8 percent) of college respondents reported that they recover 30 percent or less of their operating costs via revenue. Another 8.8 percent earn back 31 to 50 percent of operating costs via revenue. Some 5.3 percent said they earned between 51 and 70 percent of their costs via revenue, and 19.4 percent said they recover 71 percent or more of their operating costs via revenue.

College respondents were less likely than non-college respondents to report that they had taken action to reduce their operating expenditures, though a large majority had done so. Some 80.5 percent of college respondents said they had done so, compared with 83.9 percent of non-college respondents. The most common actions taken by college respondents include: improving energy efficiency (44.6 percent of college respondents had done so); increasing fees (31.6 percent); reducing staff (31.6 percent); putting construction or renovation plans on hold (27.7 percent); or cutting programs or services (27.7 percent). In fact, college respondents were much more likely to report that they had cut programs and services than non-college respondents. While 27.7 percent of college respondents had done so, just 17.9 percent of non-college respondents said they had cut programs or services in order to reduce their operating expenditures.