An analysis of 91 public higher education systems reveals that cost-cutting alone cannot reverse institutional decline, according to research released through Higher Ed Dive.
The researcher examined all 91 systems using public data and found that enrollment loss, not spending alone, drives financial distress. A system that cuts costs while enrollment continues to fall becomes more efficient at contraction but does not change its trajectory.
Technology decisions matter, but not as cost reducers. Under financial pressure, systems often treat technology as a way to consolidate platforms and centralize transactions to save money. These moves stabilize a system but do not reverse decline. The researcher notes that two systems with mature shared-services operations remain among the most at-risk because they built those services under duress. The services softened the blow but came too late to change outcomes.
Recovery requires rebuilding demand. Systems need to recapture students lost through transfers between campuses, bring back stop-outs, coordinate enrollment across campuses instead of having them compete for the same students, and align credentials to regional labor market needs. None of this is possible without shared infrastructure.
Systems that run a common administrative platform have built roughly two and a half times as many shared services as those that do not. The researcher suggests system leaders apply four tests to technology decisions: whether the investment underpins both cost reduction and demand recovery, whether each campus can see value on its own timeline, and whether distressed systems can fund multi-year system-wide changes.
Technology will not solve a system's problems but will unlock the capabilities that can. The researcher argues that systems should build these capabilities before crisis arrives, since starting after distress begins comes too late.