Higher education in the United States and Canada is at a crossroads. Fast rising tuitions, declining enrollment, and an uncertain economy are pressuring colleges and universities to revamp their operations. Institutions of higher learning are responding, in large measure, by improving the efficiency of all aspects of their business. Moving IT operations to the public cloud can help colleges and universities implement their programs of change.

Higher Ed Challenges and Public Cloud Solutions

• Colleges and universities have been evolving for centuries. However, the past 15 years have seen a dramatic acceleration in the pace of change confronting institutions of higher learning. Major factors include:
  Decreased government funding for public colleges and universities following the Great Recession of 2008.
• Rapidly increasing costs have pushed the total costs of attending college. The inflation-adjusted average annual tuition and fees for 4-year institutions increased from $14,722 in 2009 to $16,647 in 2020.
• Demographic changes and the increasing costs of a college degree have combined to reduce enrollment. During the pandemic, the undergraduate student body population in the U.S. dropped by 1.4 million students, or 9.4%. That decline has continued. Approximately 662,000 fewer students enrolled in undergraduate programs in the spring of 2022 than in the previous spring – a drop of 4.7%.
• Rising interest rates make the cost of borrowing for college more expensive.

Higher Ed Responds

College and university leaders are pursuing various remedies to the problems their institutions face. From protecting revenue by encouraging student enrollment and retention to reducing costs through improved efficiency, higher education is becoming more business-like in its approach.

Improving Student Retention and Enrollment

BDO’s Higher Ed 2022 Higher Ed Benchmarking Report (conducted in the Summer of 2022) found that 81% of higher education leaders had “improving student retention and enrollment” as one of their top three strategies for the next 12 months. The top three approaches to increasing enrollment were “introducing campaigns to encourage prospective students to enroll,” “discounting tuition,” and “adding new degree offerings / courses.”

Introducing campaigns to encourage prospective students to enroll is a sales and marketing exercise. That means advertising and reaching prospective students. Modern advertising is heavily tilted toward the internet and social media. That requires data and a lot of it. This data and the tools to manage and exploit it are most easily accessed in the public cloud. Modern internet-based advertisers extensively use the public cloud. Improved retention is also a data-centric challenge. Vast amounts of first party (student) data must be collected, maintained, and analyzed to create algorithms that can reliably predict a problem in time for successful intervention. The public cloud provides not only the most cost-effective data storage but also has the most sophisticated data analysis tools.

Improved Efficiency

When asked about the goals for technology spending in the BDO Survey, college and university leaders cited “improve operational efficiency” as the number one response. This makes sense since “discounting tuition” is a top approach being pursued to increase enrollment and retention. The public cloud significantly reduces IT costs, especially for a seasonal business such as higher education. The computing power required to support an institution of higher learning is much higher when the students are in class. During the summer, when most students are gone, the public cloud facilities can be turned off resulting in savings. The public cloud also provides a platform for increasing digitization and self-service. Amazon Web Services’ cloud-based Alexa is one example.

New Sources of Funding

The most cited strategy for improvement over the next 12 months was “improving student retention and enrollment.” The second most common strategy was “seek new sources of revenue / funding.” When asked how these new sources of revenue/funding would be acquired the top response was “tap new donors.” One can again imagine this as an exercise in modern marketing and advertising. Corporations have long understood the criticality of large data pools in acquiring new customers. Colleges and universities will follow suit with education cloud computing strategies leading the way. The public cloud provides the third-party data, infrastructure, and software tools to make this aspiration a reality.

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