A Good Time
This is the fourteenth in a series of "food for thought" pieces from CIEE. The themes vary but all deal with study abroad for U.S. undergraduates. We present our ideas not as the only viable ones but rather to stimulate discourse in furtherance of the study abroad enterprise. Previous topics include:
- How Are We Doing?
- Standards
- A CIEE Eye for the Study Abroad Guy...or Girl
- Parents, Pills, & Pandering
- A Research Agenda for Study Abroad
- What’s It All About?
- Numbers
- Mirror, Mirror on the Wall
- Down With America: Anti-Americanism and Study Abroad
- Beware the Wolf in Sheep’s Clothing
- Leadership, Management, & Study Abroad
- Be Careful What You Wish For!
- Moving Beyond the Gap
We welcome your comments and requests for additional copies. Contact editor@ciee.org.
We are living in interesting times. Some might see this as an all too appropriate “serves you right” statement or the curse of similar construction. Either way, it’s hard to argue that this is anything but the most interesting of times. The significant change in leadership in the U.S. government, the global economic meltdown, and the increasing divide between have and have not are creating a perfect storm of economic challenge and social unrest.
Instant communication allows a world of experts or supposed experts and various elected and appointed officials to share or blog their views in one form or another. We can see death and destruction live and in color; and we can see every version of it, from that reported by CNN to that reported by Al Jezeera—two very different perspectives on the same story, both equally slanted but in different directions. We can watch Bernie Madoff, the newest King of Ponzi schemes, fight for personal survival after destroying the assets and lives of so many others. We can see Hank Paulson, a good man who never asked to serve his government or country—and who didn’t need to do so—try to figure out how to get us out of a mess that many of his friends had a hand in making, although we know this only in retrospect. We are literally bombarded with messages, many of them troubling, negative, and designed intentionally or unintentionally to erode confidence.
We are at the nexus of circumstance and our views are molded by those telling us about crisis, solution, and the “right” thing to do. Whether you believe the present is comeuppance for eight years of misguided political leadership, the result of three decades of greed and perfidy on Wall Street, God’s wrath, and/or a myriad of other causes and circumstances, the fact is that we’re at a historic moment of change and transformation in many post World War II institutions. Whatever the problems, there is plenty of blame to go around and be shared by our institutions, our leadership, and ourselves.
Assumptions that many have taken for granted are being challenged. These include things like “my house will always be worth more next year than this year;” “people who manage large organizations need to make eight and nine figure salaries to do so and actually know what they’re doing;” and “lower taxes and democratic, capitalist institutions automatically give rise to economic growth and development.” These are complex issues, far more complex than presented here and beyond the scope of this discussion. But the point is that some or much of what we’ve always assumed is “just so” and “that’s the way it is” are being challenged.
We’re not contrarians, but sorry Chicken Little, “The sky is NOT falling.” Yes, our 401K plans are looking a bit more like 201K plans, and only the most oblivious can’t notice the slowdown on Main Street. But, there are signs that credit is loosening; there are plans for government action that we see as sensible and appropriate; and after decades of being admonished to save more money, be cautious in the use of resources, and be kinder to our environment, people are doing just that. These actions will ultimately be good. There are challenges, difficult ones. We’re convinced that there are also remedies. We believe that strong leadership, human motivation, and common sense, often the rarest of commodities, will ultimately lead us forward again. The fear mongering of our broadcast outlets notwithstanding, the end is not nigh.
The academic world is not immune to the economic forces around us. Parents paying large tuitions are challenged to find these sums and/or reluctant to cash in depleted stock values and/or borrow against an uncertain future. At a time when schools have less funding for financial aid, they are being pushed to provide more. States strapped for cash are looking at the costs of higher education and putting more of the operating burden on students and institutions than general taxpayer funds. Coupled with decreased investment returns and declining endowment values—income which supported campus operations for many—schools are slowing spending plans on capital items and reducing operating expenses. The severity of the operating gap that exists on any one campus varies widely. The response also varies with need. At a macro level, actions taken and/or likely to be taken in the coming year(s) include slowed hiring, demands for greater staff productivity, more careful scrutiny of costs, and less expansive notions of new development. There is a “chill” on spending everywhere. It’s likely to last well into the 2010-11 school year. Like other types of chills, it is not quickly forgotten in the sunshine of a new day. Many of the review processes and questions asked today are likely to become the norm in the decade ahead.
Last year at the CIEE Annual Conference in Nashville, TN and in February of this year at the Forum on Education Abroad conference in Portland, OR, there were sessions on the operating impact of economic circumstances in study abroad. These sessions indicate widely disparate circumstances from school to school and office to office. While no one is untouched, the impact is in some cases very minor; much more focused on how to work with students to cut costs while abroad (OMG, you mean I can’t travel every weekend?) than on office cutbacks, hiring freezes, and program closings. At the other end of the spectrum, a few schools have either directly or indirectly put the kibosh on study abroad by cutting financial aid and/or limiting enrollments in other ways that create the same outcome: less study abroad participation and less programming. Everyone else is in the middle.
There is an old investment saying: “too late to sell, too soon to buy.” We believe that in study abroad most of what is happening today in response to economic circumstances is unlikely to be mitigated. Simply said, those offices being asked to cut costs, freeze hiring, and/or otherwise curtail activities are going to have a hard time doing much other than what they’re asked. In some cases, proactive behavior and creative accounting and budgeting will help, but what’s done is done, at least for now. Rather, it could be that the biggest impact on study abroad of the current economic cycle will not be the short-term impact but the long-term one. We believe that some very important lessons are falling out of this economic cycle and will hopefully leave a lasting impression on study abroad offices and their future plans. Those offices that see these patterns, not all of which are clear, will benefit in a variety of ways.
First, on those campuses where study abroad is fully integrated into the culture of the school and its curricula, study abroad has fared the best. In these institutions where the dialogue is not about whether and how study abroad should be allowed, but rather how to increase participation in this necessary and useful part of an educational experience, support has not, in any way, waned. In a simple sense, if study abroad is a “built in” and not an “add on,” it fares best in all circumstances, including challenging economic ones.
Second, those offices with scalable, computerized, web-based information resources linked to school enrollment programs find it easier to maintain productivity in the face of flat and declining staff. There are a variety of add-on programs available for schools to manage study abroad information. Our observation is that while such systems are filling an interim need, the most sophisticated users are working to fully integrate study abroad into the fabric of the school system of enrollment, tracking, and so forth. While this process is often a bit slower at the front end, as with curricular and related issues mentioned previously, the more integrated the study abroad office, the better its support across the academy in all economic periods.
Third, how you keep your accounts says a lot about the information you have at hand to manage costs and how the study abroad office is perceived in financial management circles. Some study abroad offices are freestanding profit centers, some are cost or responsibility centers, some are hybrids—it’s truly all over the place. It appears to us, that in those places where study abroad is a freestanding profit or responsibility center, it does the best in these times. Revenue from tuition—offset against direct and indirect costs—is the best way to track the true overall cost and contribution or loss from study abroad. If the office only aggregates costs, then no one will pay attention to the income it generates, both directly from enrollment and indirectly via admissions and related benefits to the school. It is a lot easier to cut the budget of a cost center than a contribution center.
Next, there are great inefficiencies to very small, highly-specialized, and expensive-to-operate programs. These are often some of the most exciting and intellectually engaging programs that all of us work on, but financially they are a challenge…and then some. Programs that have been the provenance of a single institution would be well-served to examine whether a consortium approach to program management makes sense. This is not meant to be self-serving. Organizations like CIEE, and many others, started to serve consortia and groups of institutions in the operation of programs that were not financially viable for a single entity. In the heady years of the last decade or two, some have lost sight of these benefits. We continue to believe and have experience that says a shared model works and offers some relief for the maintenance of programs that otherwise will fall victim to the CFO’s economic cutting knife.
Finally, a positive mental attitude in the face of dire news and histrionic political action and social commentary really quells the riot instinct. Is this fun? No way! But there is hope, there is a commitment to the field, and there is enormous interest, probably more so than at any time in history. This is very likely to continue and grow in the years ahead. Much has been made of the international credentials of many members of the new administration. This is the beginning of a new generation of leaders and this pattern of those with international experience being the norm, rather than the aberration, is likely to continue. Nothing can auger more positively for our future.
We are all very smart managers in good times. It’s times like this that sort out the truly skilled. While we can’t change the cards we’re dealt, we can begin a process of change and transformation in the study abroad office that will impact its success for many years to come. In the words of Rudyard Kipling, “this time like all times is a very good one if we but only know what to do with it.” The best is yet to come.