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Colleges are facing a new financial hurdle: Employers are dropping degree requirements for potential hires.
Institutions of higher education are grappling with unprecedented pressure to maintain enrollment numbers. A tight job market and prolonged inflation have accentuated the already inefficient legacy payment system that burdens many colleges.
And there is a new challenge, as he reports The Wall Street Journal. Large corporations and governments seeking to fill public sector positions are reconsidering four-year degrees as employment qualifications. Although bachelor’s degree holders, on average, earn more than high school graduates over a lifetime ($2.8 million vs. $1.6 million, respectively), student loan debt is an ongoing challenge for many borrowers who worry about their ability to repay those loans.
A November report from PIMNTS and American Express details tuition and board growth over the past decade. These dramatic increases can present difficulties for some prospective students (and their parents who finance these degrees). This is an especially pressing concern, given that the cost of living due to inflation has 60% of Americans living paycheck to paycheck.
A common pain point for colleges is their reliance on legacy payment systems that cannot meet modern institutional needs. Other challenges cited in the PIMNTS survey included the inability to handle recurring payments and the length of time it takes to receive payments. Seventy-two percent of school financial leaders feel that their payroll operations are only somewhat or marginally effective, consuming, on average, nearly 3% of the college’s budget. The true cost could be higher when factoring in the employee hours of troubleshooting and filing paperwork.
This need for change creates an opportunity for colleges and universities to consider digital payment platforms as one solution. Cost-cutting measures applied to legacy payment systems could open up the possibility of those savings being passed on to students through reduced fees. Addressing one issue related to legacy payment systems may not produce enough cost reductions to significantly offset tuition, but addressing multiple legacy payment issues can make a consequential difference. Failure to renew outdated payment systems could cost schools much more than just administrative costs. Even a slight drop in student numbers could mean exponential problems for higher education institutions in this competitive market.
Many institutions lack the infrastructure to implement these changes, but there is good news: Colleges interested in reducing costs by adopting digital platforms can partner with companies to consolidate their payment operations through strategies such as ID card innovations and all-in-one platforms. For schools with multiple payment platforms that handle different areas, such as tuition, restaurants and bookstores, this consolidation would streamline operations and simplify compliance and security.
Using digital payment platforms doesn’t have to be all or nothing. Adoption can start as a small introduction to the school’s broader payment system, such as tracking cafeteria payments, and then moving on to related activities. These incremental digital upgrades to campus operations can provide students with the consistent payment experience they seek—while helping to increase enrollment in an inflationary economy.
How consumers pay online with stored credentials
Convenience prompts some consumers to store their payment credentials with merchants, while security concerns give other customers pause. For “How We Pay Digitally: Stored Credentials Edition,” a collaboration with Amazon Web Services, PIMNTS surveyed 2,102 U.S. consumers to analyze the consumer dilemma and discover how merchants can win over those who wait.
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