Many high school students across the United States dream of going to college and getting the proper education to succeed in their adult lives, but high education costs are forcing many students to redirect their dreams, according to a recent article in The New York Times.

E. Gordon Gee, the president of The Ohio State University, understands that colleges and universities throughout the nation need to do something about the high costs of education, the source reported. Gee said that by creating a solid business model, educational institutions will not need to continue to raise tuition prices, which are reaching a breaking point. 

"The notion that universities can do business the very same way has to stop," Gee told the paper. "We have not been as conscious about costs as we should be, and that has now come home to roost."

Colleges and universities put tremendous rigor into the annual budgeting process. But due to the relatively stable environment over the decades, there was not a strong need for careful strategic planning, and thus the process was neglected. Educational institutions used to rely on state funding and tuition increases to maintain high levels of educational quality. However, many states are no longer allocating as much money to public colleges and more students are struggling to pay such high tuition costs, the source reported. 

"We know the model is not sustainable," Lawrence Lesick, vice president for enrollment management at Ohio Northern University, told the newspaper. "Schools are going to have to show the value proposition. Those that don’t aren’t going to be around."

Realizing they must evolve their business plans to reflect market changes, college presidents are adjusting their budgets and looking elsewhere for resourcing. Some universities have begun holding private fund-raising events, privatizing services, cutting staff and eliminating entire departments in order to keep their numbers out of the red, the Times said.

Unless struggling universities make a major change to their financial plans, many may not be able to offer the educational experience their reputations require. Below are a few areas schools can focus on to ensure they are able to meet their long-term goals.

Look to the past to plan for the future

In developing a long-term financial plan, universities must look at how they were making their money and isolate the strategies that are no longer possible. After identifying problem areas, they can begin to develop new funding initiatives that balance out, or eclipse, the resourcing methods that have become obsolete.

Evaluate the environment of the university

If a university has gained popularity over recent years, it may be able to bring in even more students if tuition prices were reduced. College presidents need to evaluate whether the trade off of more students for a lower tuition cost will improve their bottom line.

Gauge the state of the economy

The country's recent economic woes have taken a toll on families, leaving many scrambling to afford the cost of higher education. Creating programs that provide financial assistance to families may establish good will that reverberates throughout the student population. This may encourage more students to show interest in the school, and, as a result, encourage more donors to contribute funding.

Recent years have shown nothing can be taken for granted. A flexible and robust strategic plan that enables colleges and universities to perform sensitivity analysis around key variables – like enrollment, tuition and state funding – is essential to any educational institution's well being.

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