Being Prepared for the Unknown

Funding is essential to the operation of any business, higher education included. Similar to any budgeting process, an analysis of money in and money out highlights areas where changes are required for a balanced budget. Federal funding is an input that some colleges and universities are deciding to not include in their calculations. As Jesse calls out, “there are no grants from the National Institute of Health, no Pell Grants, no Covid-relief funds, no federally backed student loans.” And he continues, “There’s also no federal oversight.” This seems like a sound strategy in a politically uncertain time, but the challenges come in that this funding is often significant, making strategies to replace it difficult.

At Mount Liberty College, in Utah, they started the college with no federal funding due to opposition of what is required by the Federal Government, relying instead on founders, donors, and other local financial inputs. Jennifer Jansen of Mount Liberty Collage, said “Ours has been sort of bootstrapped all the way from the beginning.” Finding new and especially different ways of doing things is challenging, but also creates opportunities to have more robust pipelines of money, so as each one ebbs and flows, the impact is not as material as a traditionally almost guaranteed flow from the Federal Government.

Making the move away from federal funding can come in spurts, as was the case with Grove City College, that largely occurred following multiple court cases that dictated requirements from colleges and universities, tied to specific funding, such as Pell Grants and Stafford Loans. Over time, the college built a relationship with PNC Bank for its loan program for students, and currently has a $270 million endowment including a recent donor gift of $70 million. The President of the college, Paul J. McNulty, says, “Having a healthy endowment helps significantly.” This seems obvious but also underlines the point that when you have robust internal financial models, you are more equipped as an organization to adjust to changes in the various financial input streams. Additionally, Jesse notes in the article that a viewpoint of Grove City College is that when colleges and universities move away from federal funding, they can see fundraising booms.

Taking the stance to not accept federal funding is not an easy decision given the amount that typically flows into colleges and universities, especially for research. Having a plan for how to manage cuts or to decide to move away entirely before cuts force decisions is a path some institutions are taking. Being more prepared always pays dividends.


Spending time scenario planning will make you more prepared for changes in the future.

 



References:

  • [1] Jesse, David. “They'll Pass” The Chronicle of Higher Education, vol. 71, no. 21, July 18, 2025, page 8 – 10.

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