In the years ahead, rural America faces a host of issues: shrinking populations, greater outmigration, and lower levels of workforce participation. And even as small, rural colleges find themselves in declining economic ecosystems, they face their own, separate challenge: the declining demographics of high school graduates, particularly after 2025.
For small rural colleges, there is no time to lose in confronting this challenge. Here are five steps these colleges should take, sooner rather than later:
1. Before 2026, grow new educational business, prioritizing students from local towns and cities.
First, recognize the potential for adding programs that can tap new pools of students from existing recruitment markets and recognize that preprofessional programs are the most likely winners. If this principal strategy is not enough to confront the challenges sufficiently—or if this strategy has already been fully pursued—turn next to nearby populations. It is the most straightforward to understand the unmet needs of, and then recruit, those who live close by. Recognize that it is expensive to develop new markets, particularly those that are far away, absent an extremely distinctive academic program or a new team in an emerging sport.
Take a page from the book of authors Jim and Deb Fallows, who cite high levels of roll-up-your-sleeves collaboration in towns and cities that prosper. Determine if there are local firms that need ongoing education for their employees. Get to know your local two-year colleges, and do all that you can to make your own institution welcoming and seamless for transfers, at least those in the academic programs most aligned with yours. Rely less on consortia of other rural colleges, which will likely not act quickly enough, and more on consortia and partnerships in a smaller geographic radius, even across institutional types. Be wary, for instance, of signing on to slow-moving processes for developing badges or credentials that aim to be national; lean in on credentials and programs that will be quickly recognized by all industries and educational partners around one city.
2. Innovate through people, processes, and resources most suited to the task; do not wait to develop your own organizational talent.
It is likely that few faculty and staff at your college will have experience launching new programs quickly, particularly if those programs are designed for populations new to the college: adult students, say, or future engineers. Hire an academic who has built programs elsewhere, and in so doing has learned from mistakes. If the person also has prior experience with small rural colleges, so much the better. Recognize that you do not need nation-ally innovative ideas, but instead ideas that address unmet needs in markets you already saturate or can infiltrate quickly, especially those closest to the institution. All the while, be transparent with faculty and staff about the need to make investments to build educational business and therefore net revenue as innovating will most certainly require reallocation of existing resources and possibly prudent use of unrestricted surpluses.
3. At the same time, accept that the institution may very well be smaller and that some norms for small rural colleges will change.
Given the scale of demographic changes, especially in the Midwest and Northeast, even if you succeed in generating new educational business with net revenue, your institution may still shrink, or merge with another institution, after 2026. Face this situation squarely, and determine if the planned additional net revenue will be sufficient to prevent shrinking. If not, accept that further change is needed, from student-to-faculty ratios to faculty salaries, from standard numbers of courses taught per faculty member to the amount of research that can be funded. All must be considered.
In planning and budgeting, rely less on peer group data, which like Integrated Postsecondary Education Data System data are backward-looking, and are best used in a rising market, not a declining one. Remember that the goal is not to strive to approach the average of some institutions five years ago, but instead to prosper through a declining market when the strongest institutions will themselves be innovating and challenging norms. Your competitors’ numbers will not be what they were five years ago either. Similarly, unless you believe you can raise your endowment much higher in a short period of time, do not look at otherwise similar schools with significant larger endowments; their larger assets can mask the real market consequences of being a smaller college in a rural area. Be honest and model a shrinking pool of traditional undergraduates and strong net price competition.
4. Accept that changes will be both organizational and physical, and invest only where needed.
As institutions shrink, there will naturally be fewer faculty and staff. Consider how, as budgets are tighter and your institution is smaller, your students can do work that staff might have done before; your students are available for work, having few job opportunities in a rural economy. Plan as well using less space and fewer physical assets. While all groups will want more space, there will be fewer true space needs with fewer faculty and staff. Realize the savings from cost avoidance in energy and maintenance by using less space. Consider selling buildings and land, because local industry may have a need for these assets, and nonprofits or a local town might be willing to take over a building, particularly if by doing so they can help sustain you, one of their largest employers. Think hard about what the right deferred maintenance to address is, and do not spend on facilities you will likely no longer need. Finally, for the right reinvestment project, borrow prudently as needed. Do not worry about credit rating declines; if the long-term sustainability of your enterprise is under question, the credit rating will be the least of your concerns.
5. Look toward the past for continuity of institutional values, but not for organizational models for the future.
The deep values of an institution, if regularly articulated, can aid in addressing the challenges of the future. Consider what those deep values are, and what new values may also generate morale and commitment. Perhaps a commitment to work-life balance, or community connections, will animate your constituencies. Values can, for instance, keep faculty and staff committed to the institution despite declining external economic conditions. As you shape a positive future amidst the challenges, help the board turn to different metrics than rankings, and ask again about the true purpose of the institution in serving students—all students who can benefit from the education you provide—rather than the purpose of admitting students simply to deny them enrollment, or because they can pay very large sums (And as for rankings, note that your ranking may improve if only because other schools decline faster.) Consider making rural values part of the culture of your institution.
On the other hand, avoid the temptation to look back for anything other than values and boldness. Many will say: Look at our institution X years ago, from budget to staff and faculty; let us head backward. But recognize the danger in reclaiming past solutions when they were matched better to past rather than present challenges. In 2019, for instance, safety concerns were different from those in 1999: with more mobile phones, we need fewer phones outside, on towers with blue lights, while we need more mental health counselors. Similarly, while many students and families in the 19th century sought a higher education in the wilderness, away from the temptations of cities, that wish is not what we hear from the great majority of students and families today. The enterprise of the past is not always a good design for the future.
These five steps do not need to be taken in any particular sequence. Instead, pursue as many of them as possible together, and quickly. While doing so, develop and execute a clear and consistent internal and external communications program that signals that change is afoot. You will need as many hands on deck as you can get.
We often say that colleges transform lives, preparing students for rewarding lives, not wholly defined by material gain. We now have the opportunity to transform institutions, preparing their faculties and staffs for rewarding work, even as the material gains are less available.
John R. Swallow, PhD, is the president of Carthage College in Kenosha, Wisconsin.
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