Controlling Costs

• Outsourcing, Streamlining Administration, Integrating Information Technology, and Employee Incentives to Cut Costs
  

• Cost Savings through Environmentally Friendly Systems
  

• Student Employment Initiatives
  

• Consortial Arrangements
  

• Non-Tuition Revenue Streams

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Outsourcing, Streamlining Administration, Integrating Information Technology, and Employee Incentives to Cut Costs

Private colleges and universities are implementing—and expanding—better business practices to control operating costs, enhance efficiency, and give students a high quality education at the lowest price possible.  These include outsourcing services, targeting cost reductions, implementing new information technology for administrative functions, and streamlining staff while safeguarding quality.

Clark University (Worcester, MA)

Clark has launched initiatives in strategic fuel purchasing, and computerized energy co-generation and management, which have resulted in a 33-percent annual savings. Clark practices “enterprise” budgeting, which treats certain parts of the university as self-contained businesses.

College of Notre Dame of Maryland (Baltimore, MD)

The College of Notre Dame of Maryland outsources dining services, bookstore, mailroom, copy center and facilities support to companies with greater core competencies.  It also presents an annual award to the employee who generates the greatest savings while maintaining or improving service.

Columbia College Chicago (Chicago, IL)

Columbia College Chicago has a financial incentive program that rewards faculty and staff who save money by eliminating processes and procedures without harming student services or outcomes. Recipients are given a financial award equal to one-third of the cost savings, up to $2,000. 

Denison University (Granville, OH)

The university's personnel committee now requires that any growth in staff size be approved only if it can be accomplished without creating any additional burden to the student body.  The increase must be funded by either non-student revenue or by a tradeoff with an existing expense.  

Emory University (Atlanta, GA)

Emory has consolidated departments and is collaborating with regional institutions to purchase commonly used supplies.  It is eliminating contractor redundancy by combining contracts with major vendors for lower prices, and pursuing smaller vendors for greater discounts. 

Flagler College (St. Augustine, FL)

To enhance efficiency, Flagler requires faculty to teach at least five courses or 300 credit hours each semester.  It has replaced permanent tenure with rolling one- to three-year contracts; and increased the use of part-time adjunct faculty. 

Georgetown College (Georgetown, KY)

Georgetown outsources much of its alumni relations operations, including the production of publications, management of events, and development of a web site.

Massachusetts Institute of Technology (Cambridge, MA)

MIT launched a re-engineering project to close the gap between the institute's income and its expenses.  MIT has consolidated suppliers and steamlined facilities operations.

McKendree College (Lebanon, IL)

To serve students more cost effectively, the McKendree restructured its administrative staff.  Without reducing the quality or degree of service to students, several staff positions were closed. 

Spartanburg Methodist College (Spartanburg, SC)

Spartanburg enhanced the efficiency of its administrative structure by replacing six academic departments with four academic divisions.  The new structure reduced the number of administrators reporting to the vice president for academic affairs, better allocating resources. 

Stetson University (DeLand, FL)

Stetson has reduced administrative costs through program consolidation and new computer applications.  It replaced the position of chief academic officer with a dean's council, giving the existing deans of arts and sciences, business, and music direct responsibilities for institutional planning.

Union University (Jackson, TN)

Union University has outsourced several of its operations, including bookstore, facilities, grounds, and housekeeping. Through careful budget monitoring, it has taken steps to reduce hiring.

University of Notre Dame (Notre Dame, IN)

Notre Dame has re-bid and streamlined administration of benefit plans; implemented campus-wide budget reductions; enhanced procurement processes; outsourced the cashier's office; and implemented incentive plans to encourage departments to improve expense management. 

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Cost Savings through Environmentally Friendly Systems

Private colleges and universities are moving quickly to implement and expand environmentally-friendly systems that reduce energy consumption and result in significant cost savings.

Adelphi University (Garden City, NY)

Adelphi installed a geo-thermal heating system in 2003 for its new residence hall, which reduced the building's projected consumption by 30 percent.  The university cuts back 400 kilowatts of power on high demand days in exchange for payment from its energy supply company. 

Illinois College (Jacksonville, IL)

To reduce energy costs well into the future, Illinois College opened a resident hall in 2006 that emphasizes state-of-the-art strategies for sustainable site development, water savings, energy efficiency, materials selection, and indoor environmental quality.

Juniata College (Marion, AL)

Juniata buried cool-water lines at all of its main buildings to reduce the electrical load for air conditioners, making it more cost efficient to cool buildings.  The college has created a LEED-certified multipurpose building that uses recycled materials, natural heating and cooling systems, composting toilets and a variety of other systems to reduce the environmental footprint and cut down on energy consumption.  Juniata installed new boilers that can be switched between natural gas and heating oil, allowing the college to save money by locking in long-term supplies at reduced costs. 

Park University (Parkville, MO)

Park has had significant savings by building classroom and office space underground, including saving more than 50 percent on the construction cost of new distance learning facilities.  Park also reaps ongoing savings through lower operating and utility costs.

Princeton University (Princeton, NJ)

Princeton has implemented an electricity supply load management system that predicts electricity demand on an hourly basis, compares demand to pricing, and allows the university to use major equipment when energy costs are lowest  This system saved about $2 million in the 2006 fiscal year.  Princeton also produces chilled water when costs are lowest, stores this chilled water until it is needed, and has been recommissioning heating and cooling systems to original or improved designed standards for additional savings.

University of Evansville (Evansville, IN)

The University of Evansville produces approximately half of its own electricity with a guaranteed savings of at least $400,000 annually over the next 15 years.

University of Scranton (Scranton, PA)

During the summer of 2005, the university implemented a water conservation project that saved the university nearly $100,000 a year and conserved more than 10 million gallons of water consumption. The savings from reduced water consumption, sewer taxes, and thermal energy for water heating are estimated at about $95,000 per year. 

Wilson College (Chambersburg, PA)

Vegetable oil from Wilson’s 100-acre, on-campus, organic farm, is recycled into biodiesel fuel for the farm’s equipment, and waste products from the dining hall and equestrian center are used as compost for the fields.

Student Employment Initiatives

A growing number of institutions are giving students an opportunity for paid hands-on work experience related to their field of study.  Colleges save on the higher costs of full-time, permanent employees.  

Juniata College (Marion, AL)

Juniata’s entire information tech support operation is run by its students.  Student managers direct budgets, hire (and fire) student employees, and take on R & D assignments for new software or products. 

Marquette University (Milwaukee, WI)

To save costs, Marquette supplements its finance staff by hiring student accounting interns who apply classroom knowledge while providing a needed university service. 

Rhodes College (Memphis, TN)

Since 2004, students compete for jobs as “student associates” in areas related to their academic field of study.  Rhodes pays the students staff wages, while reaping the savings of assigning only fractional positions.  Students gain valuable training and experience.  With 60 students involved, Rhodes saw cost containment almost triple in the third year of the program.  The positions solve departmental needs at a fraction of the previous cost and resulted in improved services, extended programming, and greater student satisfaction.

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Consortial Arrangements 

Regional and Metropolitan Consortial Arrangements

Statewide Consortial Arrangements

National Consortial Arrangements

Regional and Metropolitan Consortial Arrangements

Increasingly, private colleges and universities in common metropolitan areas or regions work together to cut operating costs while improving quality.  These multi-institution alliances allow colleges to leverage joint purchasing power for lower costs on energy, insurance, and information technology; reduce administrative and academic redundancies; offer students new learning opportunities and better services; and share best practices.

Associated Colleges of Central Kansas (McPherson, KS)

ACCK’s consortial activities collectively save participating campuses an estimated $1.2 million each year.  The effort provides administrative computing services and selected academic programs from a central location; an undergraduate major in special education; and upper-level coursework in several disciplines.  ACCK offers a health insurance pool; Internet access through a single vendor; daily courier service; and a Blackboard server used by faculty at the member institutions.

Baltimore Collegetown Network (Baltimore, MD)

The 17 members of the Baltimore Collegetown Network offer cross-registration to help eliminate unnecessary duplication of courses.  Seven of the colleges offer a free shuttle to students, faculty and staff to campuses and other points of interest through the metropolitan area.

Colleges of the Fenway (Boston, MA)

Six neighboring institutions in Boston formed the Colleges of the Fenway consortium to share courses, programs, and services, while retaining their individual names, missions, and independence.  The consortium offers cross registration of students and collaborates on master planning and information technology.  It offers temp services and advertising contracts, and holds admissions and marketing events.

Five Colleges, Inc. (Amherst, MA)

Five Colleges, Inc., a consortium of five private and public institutions, promotes long-term education and administrative resource sharing.  Members make joint appointments in areas such as risk management and recycling; jointly recruit for admissions; conduct joint management training; and have a cooperative purchasing agreement that allows the institutions to jointly save $1 million each year. The colleges have common academic calendars; offer a joint automated library system and online course catalog; share several academic departments; and make joint faculty appointments. 

Independent College Enterprise (Charleston, WV)

The Independent College Enterprise is a collaborative effort between seven Virginia, West Virginia, and Massachusetts institutions to share all of their administrative computing services.  ICE owns and operates the hardware and software that support the financial management, human resource, financial aid, admissions, alumni, development, and student records processes for all seven schools. 

Lehigh Valley Association of Independent Colleges (Bethlehem, PA)

LVAIC’s collaborative purchasing programs have generated substantial cost savings, giving smaller institutions better pricing and access to higher quality products and services.  It handles $60 million in group purchasing of products and services.  Seven other regional colleges, universities, and private secondary institutions have joined LVAIC’s six member institutions in these programs. 

Southeastern Pennsylvania Consortium for Higher Education (Glenside, PA)

The eight private colleges and universities that make up SEPCHE share administrative services; a common calendar among groups of colleges to facilitate co-curricular and curricular activities; cross-registration and transfer processes; and collaborative student activities. They jointly hire faculty and staff in mutually beneficial areas, develop new academic programs, and provide faculty development.

Statewide Consortial Arrangements

State associations of private colleges and universities are innovating and expanding collaborative initiatives that cut operating costs while improving quality.  These statewide alliances allow colleges to leverage joint purchasing power for lower costs on energy, insurance, and information technology; reduce administrative and academic redundancies; offer students new learning opportunities and better services; and share best practices.

Association of Independent Colleges and Universities in New Jersey (Summit, NJ)

AICUNJ provides New Jersey’s 14 independent colleges and universities consortial purchasing for communications, energy, insurance, computer software, equipment financing, mattresses and travel, and employment benefits such as temporary and long term disability benefits plans.  Collaborative professional development workshops also help keep costs down.

Association of Independent Colleges and Universities of Pennsylvania (Harrisburg, PA)

AICUP member institutions participate in several joint purchasing agreements, including licensing for major Microsoft products, with an average cost savings of 60 percent to 70 percent; repair and maintenance contracts, with an estimated overall cost reduction of 10 to 30 percent; local and long distance phone service; Internet access; natural gas; electricity; bond financing, with an overall savings of $1.5 million in insurance expenses; and worker's comp and auto insurance.

Connecticut Conference of Independent Colleges (West Hartford, CT)

CCIC has a multi-pronged administrative collaboration effort that is focused on group purchasing, shared services and the development of new markets.  Members have access to shared staff training and contracts for various products including legal online music downloading, internet security tools, personal security options, parcel delivery, bottled water, conference calling, and news clipping services.  Other services include student health insurance, workers compensation insurance, internal audit services, an annual risk management conference, and collaborative emergency planning. Work groups meet on a regular basis to explore options, expand services, and share best practices. 

Council of Independent Colleges in Virginia (Bedford, VA)

CICV is involved in several collaborative business programs, including a volume discount program for long-distance telephone service and a discounted Microsoft Campus Agreement. CICV is also engaged in extensive collaborative efforts to recruit students for member institutions. 

Independent Colleges and Universities of Florida (Tallahassee, FL)

ICUF sponsors the Independent Colleges and Universities Risk Management Association that offer property, liability, workers compensation, and auto insurance.  This group will soon add pooled coverage for property, casualty, workers compensation, auto, pollution, e-commerce, and a number of other products.  In addition, ICUF provides its 28 members with self-insured medical benefits; maintains a purchasing arrangement with UPS, Dell, and Siemens; and offers a statewide Microsoft Campus Agreement. 

Maryland Independent Colleges and Universities Association (nnapolis, MD)

MICUA offers collaborative purchasing programs its 18 member colleges, including student, property and casualty, group life, and long-term disability insurance; as well as student tuition payment plans.

Ohio Foundation of Independent Colleges (Columbus, OH)

OFIC’s 35 member colleges share technology hardware, software, and expertise; software licensing; faculty development and teacher education programs in technology use; consultative referral service in health and property and casualty insurance solutions; and consultative referral services in energy management solutions.  OFIC also provides collaborative programs in minority student recruitment and retention.

Oregon Independent Colleges Association (Portland, OR)

On behalf of its 17 member institutions, OICA has initiated and sustains volume purchasing programs for all voice and data telecommunications; multiple lines of software and hardware; a self-insured workers compensation benefit trust; a self-insured employee health benefits trust; moving vans; public notices; and management training. Annual savings are estimated at $3 million to $5 million. Students at OICA member institutions can cross-register, without cost, at other schools to complete required courses not offered in a given term at their home campus.

Tennessee Independent Colleges and Universities Association (Nashville, TN)

TICUA offers its 37 member institutions a self-funded health insurance program; and has its own $17 million procurement program that offers discounts with over 40 vendors, ranging from computer software to electrical services.

Wisconsin Association of Independent Colleges and Universities (Madison, WI)

The WAICU Collaboration Project is a comprehensive initiative to perform all administrative support (back office) functions of Wisconsin's 20 private colleges and universities.  According to the most recent statistics, WAICU reduced members’ costs in 2005 by more than $5 million—a 58 percent increase in savings from 2004.  The effort, now halfway through its implementation process, includes joint administration of health plans, a study abroad consortium, professional development for faculty and departmental chairs, collection services, background checks, and a student health plan.  The congressional report The College Cost Crisis called the WAICU project “transformative.”

National Consortial Arrangements

These consortial efforts allow institutions from around the nation to pool resources to control costs and improve services.

Association of Jesuit Colleges and Universities (Washington, DC)

Twenty-one AJCU member institutions provide a collaborative virtual reference service, which allows participating colleges to extend standard hours of operation by distributing the staffing of the service across multiple libraries and multiple time zones.  Online reference librarian assistance is offered 24 hours a day, seven days a week. 

Coalition for College Cost Savings (Nashville, TN)

CCCS helps small to medium sized independent institutions in 16 states enhance efficiency through joint procurement agreements for several services and products.  Joint contracts for comprehensive asset management programs and employee long-term care insurance are also offered.

Online Consortium of Independent Colleges and Univerisites (Denver, CO)

In 2006, more than 80 nonprofit, private colleges joined together to launch the Online Consortium of Online Colleges and Universities (OCICU), which allows member schools to have access to classes taught by seven provider schools. By joining the consortium, member schools are able to offer all of the OCICU courses to their students at a much smaller cost than developing everything on their own. Students benefit from having more classes to choose from.

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Non-Tuition Revenue Streams

To help reduce the pressure of rising costs on tuition, private institutions are generating and expanding alternative revenue streams.

Augustana College (Rock Island, IL)

Augustana has launched a capital campaign with the goal of endowing $50 million in need based scholarships.

Hampton University (Hampton, VA)

Hampton uses income and interest from real estate and other investments to fund approximately $4 million in scholarships for students each year.

Loyola University Chicago (Chicago, IL)

Loyola University Chicago converted the first floor of a college owned building in Chicago to commercial retail rental property.  It is also leasing university-owned land for annual rental income of $2 million, plus cost of living increases each year. 

Martin Methodist College (Pulaski, TN)

MMC has encouraged alumni to use the temporary federal IRA charitable rollover provision to establish scholarship endowments. 

Nichols College (Dudley, MA)

Nichols’ facilities are rented out in the summer at 100 percent capacity to help offset costs.