Higher education institutions have been curtailing campus expansion plans as they reassess which facilities they really need to own and operate.
That’s one of the key findings in Gordian’s 12th Annual State of Facilities in Higher Education. The report also found that the backlog of capital renewal needs grew at 2% this year and shortfalls in funding campus renewal investments have been measured at more than 32%.
“On campuses this year, we continue to hear stories of planned project costs outstripping available and allocated budgets, tempering the impact of even the most well-meaning and thoughtfully directed dollars,” the report states.
Spending on operations has kept pace with inflation, but colleges and universities have not yet recovered from budget reductions that happened before and during the Covid-19 pandemic.
Looming over the assessment of higher education facilities is the expectation that enrollment at colleges and universities will experience a significant drop in the coming years.
Declining birth rates and shrinking numbers of international applicants mean a smaller pool of potential students. The reports suggests that the most selective and sought-after universities will be able to maintain or even grow their enrollment, but the future may not be as bright for other schools.
“[F]or those institutions that have been struggling, difficult choices that many have been talking about for several years now are upon them,” the report states. “Most sustaining models involve reimagining the institution as a smaller place with reductions in employees and property to align spending with revenue. Alternatives demonstrated over the past decade would include merger, sale or dissolution.”
