Those following the higher education news cycle over the last several months know that state legislators across the country are mandating cuts to academic programs with low enrollment.1 The cuts are an attempt to identify cost savings and reinvest in programs that will, presumably, attract students. However, program enrollment and course enrollment have different impacts on an institution and both should be used in decision making.
While all institutions track the number of declared majors (for reporting outcomes like degrees awarded) in a program, fewer institutions measure the economic contribution of those programs to the overall academic operation. Forvis Mazars has written about that extensively in other articles and re-asserts that there is immense value in understanding which programs are financially sustainable and which are not. By using certain dashboards in our Program Economic Analysis (PEA) solution, for instance, institutions can understand the impacts of teaching expenses, nonteaching instructional expenses, release time, and academic support functions on these contribution margins. These dashboards can be helpful for cabinet members and we encourage institutions to review a list of use cases for such a solution here.
Just as it is necessary to understand program enrollment and margin, it is equally important to understand enrollment and margins in subject areas. Students take core and general education courses that are required for graduation and build a foundation for courses in their declared major. Such courses are the basis of much of the credit hour production that generates university revenues. A common example of this is in courses taught within English departments. While there may only be 30 English majors, nearly every student at the university is taking at least one English class in their first year. If there are 3,000 first-year students, that means that the English department is producing 9,000 (chargeable) credit hours each year, on top of whatever it is generating for its declared majors. That may be more credit hours than popular programs in STEM or business.
Using course dashboards within Program Economic Analysis, you can do this analysis for your courses, subject areas, departments, programs, and colleges. You can also measure how much revenue each of these units is generating and how much they cost to deliver by credit hour. You will find there are some subject areas that are not generating margin when analyzed at the program level (by declared major) but are generating margin when analyzed at the course level (by students’ enrolled courses).
The distinction between program and course enrollments is essential to identifying efficiencies and for strategic staffing. Sunsetting low-enrolled programs serving the core curriculum will not result in cost savings in the short term, because faculty will still be required to teach that subject to all students on campus (immediate cost savings will come from sunsetting programs that are expensive and not associated with the core). However, sunsetting a low-enrolled, high credit hour production program may result in cost savings in the future because the institution may not require highly specialized faculty to teach in its general education curriculum. That information allows academic officers to recruit and compensate accordingly.
Until institutions identify and use tools that will help them make these distinctions, it will be difficult to:
- Challenge external assumptions about their revenues and expenses.
- Identify realistic opportunities to achieve sustainability.
Want to learn more about using PEA to help your institution understand credit hour production to help measure financial performance? Contact a professional at Forvis Mazars today and check out the other articles in our use case series to learn about the variety of ways PEA can help provide strategic value to your institution.
- 1“Legislatures Require Colleges to Cut Degrees in Low Demand,” insidehighered.com, July 15, 2025.