Higher Education Institutions
▪ Higher Education Institutions have faced mounting pressures on their financial health and long-term viability over the past decade:
▪ Students – The Gen-Z cohort, much smaller than its predecessors, is showing different preferences for Institutions, campus culture, and program delivery.
▪ Programs + Faculty – Poorly managed programs with declining enrollment, few graduates, and entrenched faculty.
▪ Financial – Covid-19 induced costs for safety and engagement, reduced ancillary income streams on top of shrinking tuition revenues and diminished endowments.
▪ Prior to the pandemic 25% of private colleges were running unsustainable deficits. Investment rating agencies have downgraded higher education debt due to rising risk, making borrowing more expensive.
▪ States have cut their funding of higher education by an average 13% over the past decade and the downward trend continues post-pandemic.
▪ Schools continue to operate in inefficient silos, both administratively and programmatically. Experts predict a failure rate above 25%.
The Opportunity
Despite the gloomy picture in higher education, with a fresh perspective there are strategies to survive, adapt and prosper in this new reality.
▪ Lessons from the business world suggest that stress in the Higher Education sector is a catalyst for consolidations and combinations – survivors act early and are willing to objectively self-analyze.
▪ A forward-thinking strategy can turn a failing school into a valuable asset for potential partners or acquirers.
▪ ELM2 Advisors seeks to assist Institutions in identifying their unique brand advantages, confronting their challenges, and addressing issues using business tools within a framework of alumni-driven boards and shared faculty governance.
▪ ELM2 Advisors will help both strong and troubled Institutions to position themselves for strategic combinations which unlock value, extract synergies, and create longevity, legacy and strength in the subsequent Institutions.
