Since 2020, at least 35 additional institutions have closed, with several others, at this writing, scheduled to cease operations in 2024. Most of these were small colleges with limited resources and small endowments, stressed by rising costs, dropping enrollments and the effects of COVID-19. Takeaways: Given the discouraging demographic forecast sure to affect future enrollments, we can expect more institutions to be shuttered in the last half of this decade. The challenge for the financial aid professional will be helping to make sure their school isn’t one of them. Institutions in the Northeast and Midwest, whose populations have already been declining for some years, may face the stiffest headwinds. Liberal arts schools will diminish, and job-oriented academic programs aimed at placement in high-paying fields such as computer science and healthcare will become more prominent. Because fewer competing higher education institutions will exist, available student populations will consolidate in the remaining institutions. That may help healthier colleges recruit new students, at least for a while. But colleges should not be surprised if, in addition to inquiries about academic programs offered, the cost of tuition and fees, and the amount of financial aid available, they also get some pointed questions from prospective students and their families about their institutions’ fiscal health. The disruption experienced by students whose colleges go under is profound. As colleges pursue more high-touch recruiting techniques to attract prospective students and retain existing students, they will need to be ready with convincing assurances about long-term viability. Challenge #4: Financial Aid Staffing Crisis At exactly the time when educational institutions need to redouble their efforts to compete for a decreasing student population of students – a population in which a greater percentage of new applicants may need substantial financial help – many financial aid offices are struggling to attract, hire and retain qualified staff. To be sure, financial aid staffing shortages are part of a continued trend across higher education. The Chronicle of Higher Education reported on a 2023 survey of staff members by the College and University Professional Association for Human Resources. 11 In the survey, more than half who responded said they were at least somewhat likely to be looking for a new job in the coming year. A third of the respondents said a new job search was likely or very likely for them. In the financial aid area specifically, 44 percent of respondents said they were at least somewhat likely to be seeking other employment. Because financial aid is the front door to higher education for many students, the staffing situation in financial aid offices may be regarded as especially critical. A report from The National Association of Student Financial Aid Administrators (NASFAA) underscores the severity of the problem. 12 In a March 2022 NASFAA survey of 500 institutions, half of the respondents said that staffing capacity in their financial aid offices was at just 75 percent for award years 2019-2020 and 2020-2021.
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