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Monday, February 2, 2015

Considering Economies of Scale In Louisiana's Higher Education Budgets

Economies of scale can be applicable to higher education as it is to the business world. Improving economies of scale is result of finding value through increased production. In the higher education world economies of scale could mean a number of different things depending if you are looking at a single higher education institution or a statewide system. The need to take a better look at economies of scale are becoming apparent in places like Louisiana that have a projected $300 million shortfall this year.

A few ideas have been thrown around amongst legislators and each will debated soon as they scramble to make the numbers work. The debate cannot be complete without a discussion of economies of scale that discover new efficiencies while pushing for higher levels of value. A laundry list of rough ideas can spark thought on which ideas may or may not be beneficial as states struggle with budgeting criteria.

Consolidate Degrees: Consolidate less popular degrees into larger degrees that are less costly to maintain. If much of the curriculum is shared and similar competencies are learned it can save money by removing redundancy throughout departments.

Collaborate on Less Popular Degrees: When programs are too expensive for a university to maintain on its own it may consider finding other universities that would like to share their time and resources on these less popular programs and/or classes to reduce costs for everyone.

Collaborate With Corporations on Research: Research is expensive and collaborating with end users may not only pick up the pace of research but also encourage greater resource allocation. The more research developed that has practical use upon completion is a benefit in raising the value of higher education institutions.

Standardize Curriculum: Core courses can often be standardized while allowing more variability in upper level courses. A basic math or writing class doesn't need to be rewritten by each professor to be successful.

Move Online: Online education offers opportunities to reduce expenses associated with facilities, parking, maintenance, staff, etc... as students can learn from home without having to attend all of their courses on campus. Online education can be standardized which also reduces expenses.

Shared Services Among Universities: Universities have an expensive support network of internal and external service suppliers. Finding places where universities can share resources and services reduces costs and helps balance budgets.

Lease Unused Facilities: The legacy cost of buildings is a growing challenge among aging universities. Leasing and sharing time in facilities that are not fully utilized by universities can mitigate expenses.


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