Navigating Program Closure in an Era of Budget Cuts

Navigating Program Closure in an Era of Budget Cuts

Program closure is never an easy decision. While academic curricula evolve over time, it's rare for established programs to close, even as new ones emerge. But with the financial landscape shifting significantly, particularly in Canadian higher education, this once-unlikely scenario is now becoming a reality.

The Financial Landscape Has Changed

In the past decade, Canadian institutions relied heavily on growing international student tuition as a primary revenue source. That reliable stream has slowed drastically. In January, the federal government announced a 35% cut in study permits for 2024, followed by a 45% drop in applications. By September 18, a further 10% reduction was announced for 2025 and 2026. While I’m not fully convinced a further cut is anything beyond symbolic, it certainly closes the door on changes to reverse the decline.

These cuts will have far-reaching impacts, particularly on budgets. They will play out differently across provinces, with some experiencing sharp declines and others seeing modest growth. One thing is clear: this isn’t a one-time shock. We’re facing a protracted period of reduced enrolment and budget shortfalls.

Now that we know these cuts aren’t just a one-time shock, we need to plan for what the future will look like.

Intake cuts in 2024, 2025, and 2026 have a long tail: in universities, it often takes students six years to complete their studies; in colleges, it often takes two to three years. This means that cuts made in three consecutive years will have a ripple effect for at least eight years.

Given this, institutions are now faced with the hard task of finding efficiencies, which may include layoffs, early retirement offers, mergers, or program closures.

My Experience with Program Closure

I’ve lived through this kind of change firsthand. I started my undergraduate studies at Simon Fraser University (SFU) after it absorbed the Technical University of BC (TechBC). I began in the Information Technology program, but quickly realized that my passion wasn’t in programming. I wanted to switch to the Management and Technology program, but SFU had folded it into their standard Business Administration offerings, causing an extra year of studies for most students. This was not appealing, though I’ll note I eventually completed my Management of Technology MBA with SFU.

We were in a unique position – the university was committed to “teaching out” the IT program, meaning they would offer all required courses to current students but wouldn't admit new students. This led to an environment where we felt compelled to complete our courses as soon as they were offered, lest we miss our only chance.

My experience navigating the uncertainty of this transition shaped my understanding of the challenges faced by students and administrators alike when a program closes. It wasn’t just about finishing my degree; it was about finding ways to advocate for others and adjust to an evolving academic landscape.

Lessons Learned: Key Considerations in Program Closure

Reflecting on my time at SFU and my later career in higher education, I’ve identified four key lessons that every institution should consider when facing program closures:

1. Legal Obligations: Once a student is admitted to a program, there’s often a legal obligation to provide them with the curriculum they signed up for. This means offering the full range of courses they need to graduate or providing reasonable alternatives, even if the program is no longer admitting new students.
2. Teaching Out: Teaching out a program usually involves offering all necessary courses for current students while not accepting new ones. This process can take longer than expected, especially when accounting for students who may need extra time to graduate.
3. Faculty Management: It’s challenging to retain faculty when they know their program will be closing. Finding a balance between using full-time staff and hiring sessional instructors becomes crucial.
4. Creative Solutions: There are often opportunities to provide flexibility, such as allowing students to take courses from other programs, institutions, or online platforms, or even to facilitate transfers to other universities.

Forecasting Program Viability with Plaid Forecast

To plan for program closures effectively, forecasting tools are invaluable. For example, Plaid Forecast allows institutions to model different scenarios and prepare for the impact of declining enrolments.

Let's take a hypothetical scenario for an institution facing budget cuts.

Identifying programs that may be at risk

We start by looking at our existing plans scenarios:

Central Plan A: this scenario represents our plan prior to knowing about the federal changes to international study permits.

Relatively, this plan shows modest growth over the coming five years, with domestic growing from about 22,000 to 25,000 and international growing from 6,200 to 7,000. The intakes are mostly steady state, so this growth reflects the growth that happened at Plaid University in earlier years.

Of course, then the Minister of Immigration, Refugees, and Citizenship Marc Miller announced new regulations in January 2024 and again in September 2024. The first announcement was a 35% cut relative to 2023 international study permits issued. The second announcement was a further 10% cut for 2024 and 2025.

Factoring those changes into account, we made a new scenario:

• A- International Down 35-10-10 (relative to 2023).

In this scenario, our international intakes decline compared to Central Plan A. For example, here’s what we expect for new international intakes for the Bachelor of Commerce program:

For Plaid University as a whole, we’d be down 2,596 new intakes (Plaid University overall has about 30,000 students), hitting our budget to the tune of $93m. Of course, intakes are only part of the story: the next section looks at overall headcounts, inclusive of all programs and all study years.

Forecasting Impacts

We can see our preliminary results in this scenario start to show a downward trend for international, dropping our overall headcount from 5,875 to 5,394 over five years. Note how the impact is already felt in the earliest terms we’re projecting.

Plaid Forecast also allows us to compare results of any scenario to any other scenario. Below is a live comparison of the difference between our scenarios. See how the yellow line is noticeably lower than the red one? That’s the impact of these cuts.

Phasing Out Programs

Now let’s drill deeper into our results. Plaid Forecast can project enrolments in programs, residencies, year levels (or other progress indicators such as block codes), and courses.

Here, we’ll find our bachelor degree programs with the fewest international students. Our theory is that maybe these ones will be unable to absorb the cuts in intakes, but we need to test this with evidence. We posit that programs with fewer than 350 international students may be unable to continue in their present form. Remember, at a lot of institutions tuition follows the student through a tuition allocation model: so if there are fewer engineers enrolling, then the engineering faculty will see a budget cut as well as the wider institution.

We start at the high level, and we can see right off the hop that our biggest bachelor programs (BA, BSC, BCOM) will be spared for this exercise because they all stay above 350 international students – barely for BCOM.

Zooming in a little further, we can see our smallest three programs: BED, BSCHS, and the much larger BENG. These ones fall below our cut-off of 350 international students on a consistent basis as we head into 2026.

Given our framework that suggests these programs are unsustainable, we can model what phasing them out would look like, in minutes with a few mouse clicks.

We took our base scenario “A- International Down 35-10-10” and cloned it four times:

• B – Phase out BED
• C – Phase out BENG
• D – Phase out BSCHS
• E – Phase out BED BENG BSCHS

Given these are somewhat repetitive, I’m only going to report here on the impact of phasing out all three programs - by setting intakes for these programs (both domestic and international) to zero. Given BSCHS and BED are small, their impact on the entire university will be small; while BENG phasing out will have a noticeable impact.

This image shows the total impact on headcount. The top half is domestic, the bottom half is international. Looking at the top, we can see the teal line is noticeably lower than the blue and orange (overlapping) lines. This is the impact of phasing out BED BENG BSCHS – particularly the volume of domestic students in BENG. Notice how the gap gets wider over time – that’s the impact of teach out. For the international lines, we can see that the difference is relatively smaller due to a smaller base, but still significant if comparing the red line of our original plan to the purple line of government cuts plus phasing out programs: by the time we get to Summer 2028, we are down about 2,000 international students relative to our plan, and about 4,000 domestic students. Using that 2023 average tuition rate for international students means we are down about $72m over five years on international tuition. Domestic is down about $28m (assuming domestic tuition is 20% that of international tuition).

So… did cutting three undergraduate programs end up saving us over $100m in costs? Or did we inadvertently cut the wrong thing?

Teach Out

As we phase out our three undergrad programs, we want to know what commitments we're going to have to honour here as well.

Drilling into our three programs, we can see that our teaching commitments are going to last well into 2028, and quite possibly beyond. We'll need to account for these students when we consider what courses to offer going forward.

The Bigger Picture

Program closure isn't simply about shutting down courses; it's about fulfilling obligations to students, managing faculty transitions, and identifying creative ways to maintain educational integrity throughout the process. The right data, forecasting tools, and strategic planning can help academic leaders make informed decisions that balance financial realities with educational responsibilities.

Conducting analysis with predictive modelling tools like Plaid Forecast allows you to make evidence-informed decisions about what kinds of programs to continue offering, and is crucial for several reasons:

1. Informed Decision-Making

• Understanding Impact Analysis helps quantify the potential impact of a program closure, such as how many students will be affected, how it will influence faculty workloads, and the financial implications. It allows leaders to assess whether the savings from closing a program will truly outweigh the costs associated with teaching out the program or reallocating resources.
• Identifying Ripple Effects Programs don't operate in isolation. Cutting one program might impact others due to shared courses, interdisciplinary offerings, or faculty teaching loads. Analysis can help identify these interdependencies to avoid unintended disruptions across the institution.

2. Financial Forecasting and Budgeting

• Revenue Loss Estimation By conducting a financial analysis, institutions can estimate the potential loss in tuition revenue, particularly from international or high-demand programs. Understanding these figures helps assess whether closing a program will alleviate or exacerbate budget constraints.
• Long-Term Financial Planning Analysis allows institutions to model different scenarios (e.g., immediate cuts vs. gradual phase-out) to understand how they will impact the budget over time. This is essential for planning future investments, hiring decisions, and infrastructure needs.

3. Maintaining Academic Quality and Reputation

• Protecting Core Programs Analysis helps prioritize which programs to protect, restructure, or cut by identifying those with the highest enrolment, strongest outcomes, or strategic alignment with the institution’s mission. This ensures that essential programs aren't cut prematurely, preserving the institution's core academic strengths.
• Minimizing Student Disruption By understanding enrolment patterns and course dependencies, institutions can develop transition plans that minimize disruptions for current students. This maintains the institution's reputation and reduces the risk of negative publicity or legal challenges.

4. Supporting Strategic Goals and Mission

• Aligning with Institutional Strategy Not all programs contribute equally to an institution's strategic goals, such as research productivity, community engagement, or student employability. Analysis helps identify which programs align most closely with these goals, ensuring that cuts are strategic rather than purely reactive.
• Scenario Planning for the Future Institutions operate in dynamic environments influenced by policy changes, demographic shifts, and labor market demands. Conducting analysis in advance enables institutions to model different scenarios and adapt more quickly to changes, making them more resilient in the face of uncertainty.

5. Transparency and Stakeholder Engagement

• Building Trust and Credibility : Transparent, data-driven analysis builds trust among faculty, staff, students, and other stakeholders. It shows that decisions are not being made arbitrarily but are based on a thoughtful and evidence-based process.
• Supporting Advocacy and Funding Requests : In some cases, analysis might highlight programs at risk but critical to the institution's mission. This data can be used to advocate for additional funding, partnerships, or grants to sustain these programs.

6. Legal and Regulatory Compliance

• Ensuring Compliance with Teach-Out Obligations : In many jurisdictions, institutions have a legal obligation to offer courses for students enrolled in a program until they can graduate. Analysis ensures that institutions understand the timeline and resources required to fulfill this obligation, minimizing the risk of legal challenges.
• Preparing for Accreditation Reviews : Some accrediting bodies require evidence of thoughtful planning and impact analysis when programs are modified or closed. Advance analysis demonstrates that the institution is proactively managing its academic portfolio.

7. Identifying Opportunities for Innovation

• Finding Creative Alternatives Analysis can reveal opportunities to revitalize or reimagine programs rather than cutting them entirely. For example, low-enrolment programs might be repackaged as interdisciplinary minors, combined with other programs, or transitioned into online offerings to attract a broader audience.
• Enhancing Collaboration By identifying overlapping courses or competencies, analysis can help institutions leverage resources more effectively, fostering collaboration across departments or even institutions.

In Summary

Conducting analysis in advance ensures that program closure decisions are strategic, transparent, and aligned with the institution's long-term goals. It helps academic leaders make data-informed choices, mitigate risks, and identify opportunities to optimize resources while maintaining quality and supporting student success. This proactive approach is essential for navigating the complex landscape of higher education, especially in times of financial uncertainty and change.

It's a tough time to be an enrolment planner: the landscape is shifting constantly, and you simply don't have the time to wait days or weeks to get answers for your leadership. Plan your tomorrow, today with Plaid Forecast.