CFOs and higher-ed finance professionals need agility to address the financial impact that new learning models have had on their institutions

Navigating the financial impact of today’s flexible classroom

CFOs and higher-ed finance professionals need agility to address the financial impact that new learning models have had on their institutions

Because of all of this, colleges and universities must now financially plan at a very detailed level.

In today’s era of uncertainty around fees and enrollment, institutions may be leaving money on the table or spending it out of the incorrect budgets. For example, many schools received pandemic-related government funding for hybrid learning. If they don’t have an accurate way to track where that money is and if it has been used, there is the potential the schools will need to return those funds. Also, schools could be spending out of a general fund and not the one allocated for hybrid learning, causing them to divert money that could be used elsewhere.

Profitability reports are a useful tool in helping schools assess on a program-by-program basis if they are making a profit (and, if not, why). Hybrid programs in particular present challenges in determining profitability. While virtual learning costs less than traditional learning, to be financially successful with a blended learning initiative, institutions must determine if they are spending more than they are bringing in, and this needs to be compared against other costs, such as the cost to keep a lab open part-time for hybrid students, as well as the loss in fees as mentioned earlier.

Schools also need to determine if this type of learning environment makes strong financial sense. If there’s one particular program where 75 out of 100 students are learning remotely versus another where 25 out of 100 students are online, it’s critical to understand how all of this affects a school’s bottom line. This can impact staffing and related costs, too, as some professors may not want to teach in this kind of hybrid environment.

Key Considerations

It’s impossible to easily and accurately understand the financial impact blended learning can have on an institution with humans and spreadsheets alone. Schools need a solution to clearly understand the impact of hybrid learning offerings at a granular level and measure the effects regularly – while also being able to quickly and effectively shift resources as needed.

The ideal solution needs to enable finance executives to conduct “what-if” scenario planning, e.g., staff turnover and the potential financial impacts, a reduction in room and board and other fees, building usage (or lack thereof) and the related costs in maintenance and utilities, etc. – and quickly adjust forecasts for more strategic decision-making.

Higher education executives can easily track actuals in real-time and create precise forecasts using agile financial planning and analysis (FP&A) technologies, such as a cloud-based financial performance platform (FPP). With the functionality these platforms afford, institutions’ finance executives have immediate access to reliable, real-time data, giving them a clear picture of their school’s current financial situation, as well as an outlook for the future. In today’s hybrid learning environment, this is precisely what schools need.

Looking Ahead

Institutions need to settle into this blended learning reality and know that this is a permanent change to the learning landscape. Just as other areas of higher education have gone digital, it’s critical for the office of finance to have agile tools that allow for scenario planning based on real-time data, and the quick modification of budgets and forecasts to stay in line with revenue and overall operating costs. Without this speed and flexibility, especially in today’s current disruptive and uncertain economy, institutions may face negative financial impacts they’re unprepared to handle.

How to use data to fuel a secure financial future at your institution

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