by Michael K. Townsley | Aug 2, 2025 | News 2025
A headline of the Wall Street Journal article of July 28th says: “AI is wrecking an already Fragile Job Market for College Graduates”. The gist of the article is that many companies are installing AI to perform the skills that recent college graduates used to provide. Until very recently, college graduates, as the article notes, did the grunt work of preparing reports that taught them basic management and operational skills so that they could advance up the ladder of management success. Now, AI is able to do this work cheaper and faster. Nevertheless, companies still hire a few graduates to review AI reports for accuracy, coherence, and the use of legitimate citations. Unfortunately, the number of new college graduates hired by major companies is very small compared to the past.
Colleges need to quickly get a grasp on this change in the job market before the student market finds an alternative to the cost of a college degree that leads to low pay and a career with no future.
by Michael K. Townsley | Aug 2, 2025 | News 2025
Over the weekend, Duke University reported than they had cut more than 660 positions due to changes in Federal Funding. They were not clear if this was due to federal grants or federal grants plus indirect cost recovery funds. Whatever the reason, this is a large change in staffing. The takeaway on this news is that wealth and research is no longer a protection against the uncertainties that confront higher education.
Over the weekend, Duke University reported than they had cut more than 660 positions due to changes in Federal Funding. They were not clear if this was due to federal grants or federal grants plus indirect cost recovery funds. Whatever the reason, this is a large change in staffing. The takeaway on this news is that wealth and research is no longer a protection against the uncertainties that confront higher education.
Over the weekend, Duke University reported than they had cut more than 660 positions due to changes in Federal Funding. They were not clear if this was due to federal grants or federal grants plus indirect cost recovery funds. Whatever the reason, this is a large change in staffing. The takeaway on this news is that wealth and research is no longer a protection against the uncertainties that confront higher education.
Over the weekend, Duke University reported than they had cut more than 660 positions due to changes in Federal Funding. They were not clear if this was due to federal grants or federal grants plus indirect cost recovery funds. Whatever the reason, this is a large change in staffing. The takeaway on this news is that wealth and research is no longer a protection against the uncertainties that confront higher education.
by Michael K. Townsley | Jul 26, 2025 | Financial Strategy and Operations
Trump’s ‘Big Beautiful Bill’ includes a provision that the federal government will not provide federal aid for bachelor degree programs that fail to produce incomes for graduates that do not exceed the income of a high school graduate. When students in an academic majors lose their federal financial aid, a college may only be able to keep these students by using unfunded institutional aid to match the lost federal aid. However, the trade-off of unfunded aid for lost federal financial aid has a negative effect on cash reserves. Federal aid provided cash, but unfunded aid does not provide any cash, which will result in the depletion of cash reserves. Under this circumstance, colleges could be forced to drop majors that lose federal financial aid. The new federal provisions on the loss of financial aid are compounded in those states that are forcing public universities to terminate majors when enrollment falls below a specific level.
Only time will time will tell whether this provision of Trump’s B3 will push colleges to terminate programs. As usual colleges will have to wait for federal bureaucrats to write and distribute the regulations before colleges learn the full impact of this provision on their academic programs.
by Michael K. Townsley | Jul 26, 2025 | News 2025
Every college needs a financial strategy and performance report format that clearly describes how the college moved from the end of the previous fiscal year to the end of the current fiscal year and how the current state of the college will shape the strategy for the next fiscal year. This template provides such a format that can tell the board of trustees, the president, and chief administrators about the financial condition of the college and where it intends to go. Any college can change any section of the report to fit the financial condition, performance and strategy for the college. The following template should not be taken as a strait jacket.
Template
Financial State of the College, Previous Fiscal Year:
- Operational Deficit
- Total Net
- Enrollment Loss During Fiscal Year 2023-24
- Debt Load
- Cash Position: Precarious
Financial Strategy for the Current Fiscal Year:
- First Priority – Build a multi-month cash reserve.
- Continue Reduction in Force (RIF) of Faculty and Staff Begun during the Prior Fiscal Year
- Freeze Discretionary Expenses
- Sell Unused Buildings
- Cut Debt Service
- Grow Enrollment
- Pay Down Unpaid Vendor Billings
- Rebuild Image by Restarting Renovation of the Library
Financial Strategy – Performance for the Current Fiscal Year
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Action
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Start of Fiscal Year
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End of Fiscal Year
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Change
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Cash Reserves
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Faculty & Staff Costs
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Savings Discretionary Buildings
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Cash from Sale of Buildings
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Reduction in Debt Service
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Enrollment
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Payoff in Vendor Payables
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Progress on Library
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Major Financial Conditions at the End of Fiscal Year
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Start of Fiscal Year
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End of Fiscal Year
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Change
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Operational Net
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Total Net
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Cash Reserves
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Debt-Service
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Enrollment
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How We Produced the Financial Performance for the Current Fiscal Year
- Describe how each strategy was accomplished
- Continue list
Opportunities for Next Fiscal Year
- Describe major opportunities
- Continue list
Financial Weaknesses to Address in the Next Fiscal Year
- Describe major weaknesses
- Continue list
Financial Strategy for Next Fiscal Year
- Operational Net
- Total Net
- Cash Reserves
- Enrollment
- Complete Library
Operational Plans to Achieve Objectives for Next Fiscal Year (Explanations)
- Operational Net
- Total Net
- Cash Reserves
- Enrollment
- Complete Library
by Michael K. Townsley | Jul 26, 2025 | Financial Strategy and Operations
During a period of deep financial distress, a president has many options to reduce the gap between revenue and expenses, while increasing cash reserves. The problem is that revenue options take too long to take effect to help the college. The quickest way to slow the rate financial decay is to cut expenses. Although it may take several months to put large scale expense strategies into operation, once they start, the college will see quick results in cutting the gap between revenue and expenses and the continued erosion of cash reserves.
Of course, any president is well aware of the turmoil that comes with cutting expenses, especially, when cuts involve terminating positions, reducing pay rates, and eliminating or slashing benefits. While presidents may recognize that cutting expenses is the fastest way to attack financial distress, many presidents, who have passed through the academic crucible of becoming a president, have been conditioned to avoid risk associated with making employees unhappy.
Nevertheless, presidents may be surprised to find that employees are already well acquainted with the parlous state of the college. As a result, while many grumble about the possible loss of employment and benefits, enough employees may recognize that given the financial state of the college, some will survive if substantial expense cuts are made, but all will lose their employment if the college closes.