Key trends for finance in Higher Education

Many trends are driving Higher Education institutions to rethink their operational finance capabilities. They recognize that legacy systems, siloed solutions, and fragmented data cannot support the level of decision making and agility they need to respond to changes in income, funding, and statutory reporting.

Institutions are beginning to see that modern Cloud solutions will enable them to meet changes in the fiscal environment and student expectations confidently, without creating additional costs or workloads.

Let’s take a look at the factors driving digital change for the Higher Education industry, and what the priorities are of those looking to uplift their financial outlook.

A changing fiscal environment

Challenging income streams

Many countries have implemented caps on tuition fees which, coupled with inflation, challenge the financial stability of Higher Education institutions. There is a global trend towards higher reliance on tuition fees rather than government funding, altering the financial landscape of Higher Education.

Institutions must look for additional funding providers and also focus more resources on attracting international students. Institutions are considering various funding models, such as increased teaching grants, employer levies, and reforms to loan repayment terms.

Rising operational costs

Increasing costs for staffing, infrastructure, and technology are putting financial pressure on universities globally. The global financial downturn has had a dramatic effect on institutions historically supported by the public, who do not have the budget flexibility to weather cost fluctuations.

International student mobility

Changes in visa policies and geopolitical factors has affected the number of international students, impacting revenue streams. Global market instability and reduction in international student programs has put increased financial pressures on students, reducing the attractiveness of overseas education.

Financial deficits

A growing number of universities worldwide are facing financial deficits, with projections that this trend will continue. Financial pressures have led to staff redundancies and the closure of courses at many universities around the world.

These trends reflect the global challenges and shifts in Higher Education funding, highlighting the need for institutions to adapt and innovate to maintain financial sustainability.

Decision makers must be empowered with data

Senior members of Higher Education institutions have more to think about than ever, which Deloitte summarizes as:

“Financial stress, rising criticism of diversity, equity, and inclusion initiatives, heightened focus on student ROI, and mounting pressure to respond to a host of domestic and geopolitical incidents.”

Importantly, these issues can be eased when leaders are empowered with integrated data, a single source of data for the entire institution, and monitoring key metrics closely to ensure that compliance, profit, student and employee satisfaction, and more, can be optimized.

With data at their fingertips, leaders can reduce anxieties around fiscal resilience, compliance, gaining insight into governance factors that are growing in interest among funders, such as social responsibility, ESG reporting, and more.