Cameron Mirza works for IREX as Chief of the Party for USAID Early Grades Education in Jordan, working with the Government of Jordan, school leaders, and the University sector to improve the learning outcomes of early-grade students. Between 2020 and 2023 Cameron was the Chief of Party for USAID pre-service teacher education program. Previously, Cameron was MENA Director for Nottingham Trent University working with MENA governments to close skills gaps between higher education and the labor market. Cameron spent several years reforming the higher education sector in the Kingdom of Bahrain. First, as Head of Strategy at the Ministry of Higher Education where he co-authored the first national strategy for higher education and authored the first employers-led graduate skills guide in 2014. Then as Director of Strategy for the University of Bahrain he authored the transformation plan and led the university to its highest-ever ranking position. Cameron is a board member of Global Impact Initiative an NGO that supports refugees gaining valuable employment skills upon resettlement and a published author on the topic of higher education including recently as co-editor of ” nationalization of the Gulf labour markets, higher education and skills development in Industry 4.0″.
In the face of shifting global dynamics, universities must rethink their financial models, moving beyond an over-reliance on student numbers as the primary revenue source. Traditional approaches, which prioritize tuition and enrollment fees, are increasingly unsustainable in a world marked by demographic changes, economic pressures, and evolving societal needs.
According to UNESCO, there are over 25,000 higher education institutions worldwide. However, increasing competition for domestic students, challenges in recruiting international students due to restrictive government policies in some countries, and fundamentally outdated business models have left many universities globally struggling to survive.
Challenges of Over-Reliance on Student Numbers
Student enrollment has historically been the backbone of university funding. While this approach aligns incentives with access to education, it also exposes institutions to significant vulnerabilities:
- Demographic Shifts: Declining birth rates in many regions have reduced student populations, particularly in high-income countries.
- Geopolitical Uncertainties: Visa restrictions and global instabilities have caused fluctuations in international student enrollments, a critical revenue stream for many universities.
- Economic Pressures: Rising tuition fees and student debt, coupled with affordability concerns, have diminished the pool of prospective students willing or able to pay for higher education.
The financial strain is evident. A report by PwC in 2024 highlights financial sustainability challenges in UK universities due to decreased per-student funding. The situation in the US is equally concerning; the Wall Street Journal reported that over 500 four-year private nonprofit colleges closed in the last decade, and nearly 100 colleges shut down in the 2023-24 academic year.
While elite institutions like Harvard and Cambridge continue to thrive—Harvard’s 2019 endowment market value reached $39.4 billion, and Cambridge generated $154.17 million in research grant income—the financial outlook for mid-tier and smaller universities remains unpredictable.
Strategies for Financial Resilience
To build resilience and reduce reliance on student numbers, universities must adopt innovative financial models. Key approaches include:
- Lifelong Learning and Micro-Credentials
The demand for short courses and certifications is growing. Universities should capitalize on this by offering upskilling and reskilling programs for professionals and local communities. Online learning platforms such as Coursera and FutureLearn provide opportunities for global reach, expanding access to quality education while generating new revenue streams.
- Building Endowments and Encouraging Philanthropy
Endowment funds, cultivated through alumni networks and philanthropic contributions, offer sustainable revenue. Institutions like Harvard and Oxford demonstrate the value of long-term donor relationships and reinvesting endowment returns into institutional priorities. For many parts of the world the culture of endowments and philanthropic ventures are still emerging or uncultivated, this requires a clear focus and a changing mindset sand culture that must be lead by universities.
- Leveraging Public-Private Partnerships (PPPs)
Collaborating with private entities on infrastructure, technology, or program delivery allows universities to share financial risks and tap into external expertise. For example, the University of Birmingham partnered with Bruntwood SciTech to develop the Birmingham Health Innovation Campus, securing significant private investment for state-of-the-art healthcare facilities. The campus will also house the Precision Health Technologies Accelerator (PHTA), providing nearly 70,000 square feet of incubation and collaboration space. The University has also announced a £50 million investment to expand the Birmingham Energy Institute, including the construction of a net-zero carbon smart building on the Edgbaston campus
- Issuing University Bonds
Higher education is the new frontier for the bond market, as an increasing number of universities issue bonds to finance debt or investment. University bonds are a type of fixed-income security that universities issue to raise funds. Investors purchase these bonds, providing the university with capital upfront, and in return, the university commits to pay periodic interest (coupons) and repay the principal at maturity. Data held by Dealogic, a financial data provider, shows that the value of bonds issued by education providers worldwide nearly trebled from $2.2bn in 2007 to $6.4bn in 2017. Australia has also been active in the bond market, A case in point is the University of Melbourne, which issued $250m in bonds in 2014 to build student housing facilities and renovate existing ones. In 2017, the University of Oxford issued a 100-year bond worth £750 million. This was one of the largest university bond issues in Europe. The bond carried an interest rate of 2.5%, reflecting strong investor confidence.
- Stakeholder-Centric Branding
Branding is pivotal in shaping a university’s identity, reputation, and appeal to key stakeholders. Authentic relationships, clear value propositions, and distinctive positioning are critical for fostering trust, recognition, and competitive advantage. Underpinning financial sustainability ambitions will require a shift in focus for many universities from top-down self-promotion to stakeholder empowerment. Universities must move away from traditional metrics, build authentic relationships with stakeholders, create genuine value propositions for different audiences and finally develop distinctive positioning that reflects the true character of the institution. Branding can shape identity, and reputation, and appeal to stakeholders such as students, faculty, alumni, donors, and corporate partners. A strong university brand fosters trust, recognition, and competitive advantage, which directly impacts enrollment, funding, and financial sustainability.
Conclusion
To ensure long-term financial sustainability, universities must diversify their revenue streams while aligning their financial strategies with their academic missions. Moving beyond student numbers and international student recruitment requires embracing innovation, taking risk, fostering stakeholder trust, and leveraging brand. Ultimately, a holistic approach to financial sustainability will enable universities to thrive in a rapidly evolving higher education landscape.