'Escape forward': How one public university plans to grow

To understand the wretched state of financial affairs at many of the nation’s public colleges and universities, one need look no further than The Prairie State.

Illinois is widely considered the worst-run state in the U.S. Crippling pension obligations, $150+ billion in debt and unpaid bills, deeply divided political leadership, the nation’s highest property taxes, all-time-high net out-migration population (105,217 in 2015), and, most alarming, a nearly two-year budget stalemate that has kept public and private businesses and institutions on edge. Sitting on $26 billion of outstanding general obligation bonds, Illinois claims the lowest credit rating among the states—BBB (Fitch Ratings), just two notches above the junk level—and, based on its present course, debt obligations are only going to worsen in the coming years. 

The state’s public universities and colleges have been among the hardest hit by the budget impasse, losing (temporarily) as much as a third of their operating budget—all while dealing with flat or declining enrollment numbers. Illinois’ political and fiscal mess has left these institutions—especially the smaller, regional schools that can’t lean on private donors or sizable endowments to get by—gasping for air. 

How can public institutions expect to survive and thrive in this turbulent environment? The answer, for one school anyways, is to think and act like entrepreneurs, to bypass the traditional funding and operational models—to escape forward. 

Michael Amiridis, Chancellor of the University of Illinois at Chicago—one of just four public universities in the state that has seen enrollment grow in recent years—coined the term when describing the school’s strategies for growth. They include a mix of belt-tightening tactics—including reorganizing internal operations to improve efficiencies and reduce costs—and creative public-private partnerships, not only for capital infrastructure, but also for vital operations areas, like international student recruiting and online degree program delivery.  

“We are using private capital to build the necessary infrastructure, whether it is human services, such as a global network of student recruiters, or capital projects, such as a new complex including dormitories and classrooms,” Amiridis wrote in a April 13 letter to Crain’s Chicago Business. He says the school is looking to create “reliable revenue streams” through infrastructure projects that offer a solid ROI and that will payoff for years to come.  

 To be sure, not all public schools face such chaos. Illinois offers the most extreme case. But enterprising institutions like UIC offer a path forward during an era when state and local government budgets across the nation are under heavy scrutiny. Colleges and universities would be wise not to expect a windfall of public funds anytime soon. Escape forward!