May 4, 2026
LINK TO SOUTHERN OREGON BUSINESS JOURNAL (Originally posted on Pam’s Facebook Page)
This is a tumultuous time for Southern Oregon University and the administration, staff, students and community members who deeply love the place. Here’s my view on the situation facing the university.
First, some larger context: Higher education across the country is experiencing an existential crisis. Reasons include demographic shifts and a resulting plunge in the number of 18-year olds; increasing personnel costs that outstrip the cost of living; the steep price tag of a four year university degree that has caused students and their families to reevaluate the value of the investment; easy availability of on-line courses that are often cheaper and more convenient; stagnant state funding; and cultural and social debate over the importance of education. A recent Gallup poll revealed that just 35% of Americans have confidence in higher ed – down by half from just a few years ago.
Across the country institutions, especially small private colleges, are closing, merging or undergoing acquisition. Here in Oregon, Willamette and Pacific Universities announced a merger last December.
For those reasons and no doubt others, higher education is at a pivotal moment that requires institutional introspection and fundamental restructuring for long term survival.
The state response
Recognizing the urgency of state action to stabilize our higher education system, last fall I worked with SOU and others to draft House Bill 4124, which instructs the Higher Education Coordinating Council to study the higher ed system and recommend changes to ensure that the system is financially and operationally sustainable for the long term. The HECC will look at opportunities for restructuring, collaboration and integration among the state’s community colleges and 4-year universities, with recommendations scheduled for consideration in the 2027 legislative session.
SOU is the first of our universities to face existential questions, but others are close behind. The state study needs to recommend bold action that will push higher education to the top of the 2027 legislative agenda.
SOU’s financial crisis
HB 4124 was intended to provide a path toward stability for SOU. But last February the university discovered a $15M hole in the budget for the current biennium, which ends June 30, 2027. Projections for the next biennium were even more dire, with an additional cash flow deficit of $28M. The financial crisis meant that the university could not sit around and wait for the HB 4124 process, which will unfold in the next year. Instead, the university needed to immediately begin to look at major restructuring to ensure that the doors remain open after July 2027.
The “good” news was that we were able to acquire a special $15M allocation in the legislature’s short session to ensure that SOU is stable for now. To assist the university in development of a transformation plan, we also allocated funding for outside consultant work. With agreement between the state and the university, that contract was issued to Deloitte. The assignment was to assess SOU’s situation and recommend changes that would achieve financial stability, with an end-of-April deadline, now extended into May.
The urgency is real
The expedited timeline has two purposes. The state’s $15M lifeline will be allocated through the legislative Emergency Board, which meets in June. Funding is predicated on evidence that: 1) the university now has in place solid financial planning for the remainder of the biennium; and 2) SOU has committed to a transformation that sets a reasonable course to long term sustainability in the next biennium. The SOU Board needs to address institutional transformation with plenty of time for presentation prior to the E-Board meeting.
But the real issue driving urgency is that SOU has a year to figure out how to be sustainable. July 1, 2027 is looming. This is a gargantuan undertaking that will require every moment allotted to it. We simply don’t have time to add another six months to the process.
What happens next
Deloitte’s findings and recommendations will be presented to the Board of Trustees and all the rest of us this week. That report provides important input and I expect it to guide the university’s decision making.
But the adoption and implementation of a sustainability plan is the university’s job and must be owned by the Board, administration and university community. If this process is viewed as one in which outside consultants devise a plan that is jammed down the throats of everyone who loves SOU, we have little chance to make constructive change. The legislature and the Emergency Board aren’t looking for a vote on the “Deloitte plan.” Instead, they want to see evidence that SOU has committed to a transformation pathway that is reasonable, doable and timely. That’s what the community should expect, as well.
The long term future
If the statewide higher education study succeeds in identifying new integration strategies and possibly transformation funding, we will make sure SOU benefits. In the meantime, we are learning things in SOU’s process that may inform the statewide discussion.
Like the rest of higher education, Southern Oregon University must change, and quickly. But I have no doubt that the university will be here to serve the community on the long term. We have to adapt to changing demographics and different educational modes, rethink the ways we provide services, and strategically target relationships with regional and statewide employers and other higher education institutions.
But absolutely — we can do this.
The next week is going to be difficult as the university community grapples with the magnitude of decision-making required for transformation. As always – please contact me if you have questions, feedback, or would like to chat.
