Making the Tough Call: Closing Lagging Academic Programs

 

By: Emma Rose Mar 05, 2019

Making the Tough Call: Closing Lagging Academic Programs

The decision to close an academic program can be one of the most challenging questions facing today’s academic leaders. The decision often comes with a lot of number crunching, a bit of soul searching, and a big dose of anxiety. Unfortunately, programs sometimes have to close to make room for new opportunities. Assessing program demand, financial impacts, and student outcomes will help you make an informed decision.

In this era of an evolving higher education landscape, traditionally high-enrolling academic programs may be losing their luster. Niche programs that were created to help fill a transient need might no longer be doing the job. Students’ interests are shifting and your institution has to change with the times. This may mean restructuring, or outright closing academic programs that have been a part of your institution’s offerings for decades.

Understand the costs

The decision to close an academic program often stems from a desire to save money, but it can cost your institution something as well. The decision to close an academic program can’t be purely financial. When you close a program, you shake student and instructor confidence in your institution. Instructors and students alike may worry if their program is next.

At the same time, local press may see the closure of a program as an indication the institution as a whole is struggling. Such “bad press” could tarnish the school’s image and make prospective students less likely to apply. Meanwhile, alumni may be upset that the program they so proudly supported has been cut. In short, the long-term impact of decreased confidence and disgruntled stakeholders may outweigh the short term financial savings of a program closure.

That’s not to say that programs should never be closed. Some should, and must, if the institution is to survive and meet the changing needs of students. However, a single year of enrollment numbers, or even a downward trend over the last few years, may not be a good enough reason to close a program. Closing an academic program is a major decision that should be based on hard data and informed projections. By taking all factors into account, you can make an strategic decision about which programs should be closed.

Look for trends

To quantify program demand, start by looking for trends. Using prior enrollment data, you should be able to graph the overall trend in enrollments. Are they rising or falling? If they are falling, is it at a faster rate than the general decrease in new enrollments across higher education? According to data from the National Student Clearinghouse Research Center, total enrollments fell by 1% from Fall 2016 to fall 2017. However, during the same timeframe, enrollments by students seeking a bachelor’s degree rose by 1.5%. Knowing how your institution compares to industry trends will give you a starting place for your decision making.

Next, compare the change in your particular program against other programs your institution offers. Are enrollments falling at a faster rate than enrollments in these other programs?

Finally, look at the market forces that might affect enrollments in the near future. The Bureau of Labor Statistics and other organizations publish forecasts for the growth or decline of many industries. These forecasts can help you make an informed projection about how demand for your program might change in the future.

Consider student outcomes

The primary goal of an academic program is to prepare students for professional success or additional education. Programs with low placement rates or poor student outcomes should be first on the list of potential closures.

Before shuttering an under-performing program, consider looking for ways to improve or restructure the program to better meet the current demands of the industry. Might you narrow the focus, find a corporate partner, or enhance career service to improve outcomes?

If attempts to update the program aren’t working, or if they’re too expensive to implement, it may be time to close that academic program to make room for something new.

Investigate the financials

Trends and placement numbers identify programs that should be evaluated for closure. With that information in hand, you can assess financials for at-risk programs to determine which, if any, need to be cut. You should be able to answer the following questions about each program.

  • What is the cost per student? Know how much educating students in that program costs in comparison to other programs. This should include the cost of maintaining facilities, paying faculty, and procuring program-specific supplies or equipment. A costly program with declining enrollment might need to be cut when a relatively inexpensive program might be allowed to remain given the same enrollment numbers.
  • What is the status of program resources? Examine the current buildings, classrooms, equipment and materials that support this program. How much maintenance do the resources require? What will it cost to keep them in good working order? How soon will they need to be replaced or updated? If costly maintenance bills are on the horizon, and other risk factors are at play, that may indicate the program should be closed.
  • What other resources does the program bring in? Some programs help sustain themselves by bringing money into the institution. In some cases, research and development contracts can help defray costs. Certain faculty members may bring in funding or prestige. Does a particular program have influential alumni or other stakeholders that would be negatively impacted by the closure? Consider all of these factors.

Making the final decision

Investigating the program from all angles will give you the information you need to quantify program demand and understand how that program impacts the institution as a whole. When you find a program with declining enrollment, medium to low student outcomes, and a poor cost to income ratio, it may be time to close.

To make certain that you’ve taken all factors into account, be sure to complete a comprehensive market demand analysis. While a market demand studies are usually done before a new program is introduced, it will also help assess the current and near-future demand for a program that you suspect may be falling out of popularity.

Interested in staying on top of education trends and better understanding your program health? Our Aslanian Market Research Annual Subscription provides ongoing market research that is customized to your institution and programs.