The Future of Higher Education

Part 5: Operations and Facilities

Ivy-covered walls and red-brick buildings boasting large windows overlooking commons represent the idealized perception of higher education. However, higher education leaders are finding that the beauty of these old campuses has faded because of age and is actually being threatened by enrollment decline, online education and changing attitudes. At the same time, maintenance and operations in higher education also are changing with the advent of new technology. In the fifth of our series on Higher Education 2028, this blog addresses the future of higher ed facilities and operations.

Challenging Times

Institutional leaders find themselves caught in a difficult dilemma – build, renovate or wait.  A 2016 Sightlines report, The State of Facilities in Higher Education, states that in general, higher education institutions are struggling with stable or declining enrollments. However, different types of institutions actually are facing different facility challenges. For instance, smaller institutions that borrowed money to construct or renovate buildings now have fewer students (and thus, tuition revenue) available to repay construction loans. Comprehensive institutions (which in Canada are some graduate-level research and offer a wide range of undergraduate, graduate, and professional programs while in the United States are master’s universities with a small number of doctorates) initially experienced rapid growth, hence contracting for new spaces, but when these new spaces are ready for use, their enrollment is declining. Conversely, research universities are actually growing, but leaders find themselves struggling to manage their spaces and identify campus priorities.

Higher education leaders are also finding that adding new buildings now comes at a steeper price, both because construction and maintenance costs have increased, but also because many students are opting for online education, making buildings obsolete and/or having excess capacity. In an article in The Conversation, Dr. Subhash Kak, the Oklahoma State University Regents Professor of Electrical and Computer Engineering, notes that lack of student demand resulted in the closing of 800 out of approximately 10,000 engineering colleges in India, and  that approximately half of U.S. institutions are at risk of shuttering in the next few decades due to online education.

Reusing and Repurposing

Not surprisingly, Education Dive suggests that higher education will see a trend in which leaders reimagine their campus design. Many are taking the first step of contracting for space utilization studies to determine how to use existing space more effectively.

A 2018 College Planning and Management column on higher education trends suggests that leaders should focus on efficiency and flexibility when considering their space. New forms of business analysis can help higher education leaders to more accurately anticipate student course needs and more efficiently use campus instructional facilities.  These analyses include aggregated data and predictive models as well as heat maps that show classroom demand by the hour.

Additionally, many institutions are (re)designing buildings to serve multiple purposes, i.e., renting out spaces for local businesses to use for presentations, etc.  This is one of the benefits of involving local stakeholders in the planning process and building commitment from the community for joint use projects.

The Thrill of the New

Still, many leaders are heeding the call to construct new state-of-the-art facilities, and College Planning and Management suggests that higher education leaders should focus on profit and loss as a way to determine what to build. “Facilities and all assets for that matter, must be viewed today as holdings that either result in profit or loss,’ said Tom Oliff, senior vice president for administrative services at Broward College. He encourages higher education leaders to create partnerships with area developers that can provide funding either upfront or recurring unrestricted revenue over a period of time.

Additionally, higher education leaders need to consider regenerative design practices when designing new buildings. These types of buildings produce all of their own energy, capture and treat water and have a net-positive impact on the environment, including the surrounding ecosystems, according to the Whole Building Design Guide of the National Institute of Building Sciences.

Higher Ed’s Dirty Secret: Deferred Maintenance  

Many campuses have buildings that were constructed before 1975 and are due for renewal, but  constructing new buildings often has taken precedence, leaving institutional maintenance staff forced to continually be reactive. For example, the Nonprofit Quarterly points to the University of Arizona, which has a projected $350 million deferred maintenance needs, the Honolulu Star-Advertiser reports that the University of Hawaii’s deferred maintenance costs has reached $745 million, and the Chronicle of Higher Ed reports that the Cal State system’s deferred maintenance exceeds $2 billion. The situation has become so challenging that Arizona’s maintenance staff was forced to shop on eBay for a replacement part for a 50-year-old electrical transformer that caught fire.

Deferred maintenance in higher education exceeds $2 trillion, as campus operating budgets and additional sources of funding for facilities and maintenance have not kept pace with inflation or the growth of campus space.  Moody’s Investors Service Report found that schools investments are the lowest in a decade in covering depreciation on existing facilities.

Legislators generally are not keen on providing funds for renovations. For instance, The State Press reported that the Arizona Legislature ignored Arizona State University’s requests for funding for building repairs and safety improvements for a 15-year period. Now, the university is dealing with water leaks in classrooms, elevator malfunctions, insect infestations and asbestos tiles that are in poor condition.

Deferred maintenance can be summed up like this: “pay me now or pay me (more) later.”

It is imperative that institutional leaders to focus on developing a plan to deal with this aging infrastructure. Some institutions are borrowing money while others are using funds from tuition. Donors may be willing to fund some of the updates if they are offered naming rights, but this isn’t nearly as “attractive” to donors as it is to build a new building.  Additionally, what about those buildings who have already been named – it’s not so easy to rename them.

The solution: Capital campaigns need to include a significant endowed component that is earmarked for facility maintenance (and not touched for other things).

Operating at a High Level

Higher education institutions also need to find ways to gain efficiencies in operations. The College Planning and Management column offers several trends that may prove helpful to higher education leaders:

  • Collaboration — Institutions must tightly focus on their core purposes and then use collaboration to gain efficiencies in order to preserve energy and resources. This can institutional cooperation and development of standardized shared practices.
  • Purchasing – Subscription models that help organize basic infrastructure needs continue to increase on campuses. These software subscription systems, offer significant financial advantages over 5-10 years.
  • Facilities Management – Some suggest using apprenticeship programs to fill gaps created by the retirement of older facilities staff members.

In addition, campuses will need skilled staff who can not only manage smart building technologies but also analyze the data. This analysis will help leaders understand the building’s usage so they can make better decisions about space allocation. In addition, these technologies should result in cost savings through wiser use of utilities and resources.

Bottom Line

Deferred maintenance, like student debt, is $1 trillion plus problem (deferred maintenance actually exceeds student debt), and it is not going to go away.  With the rising costs of tuition to pay salaries, etc., legislatures and donors need to step up to the plate to help fix our aging education infrastructure.