Knowing the True Cost of Your Programs — And What to Do About It

One of the highlights of every year for me is welcoming our colleagues in higher education back together for our annual summit. This year was no different. We kicked off our first session of the 2026 season with a presenter who always delivers — Chris Burnley, back by popular demand. Chris brings a rare combination of perspective to this topic: he has worked with numerous colleges and universities and has served in CFO and VP of Finance roles himself, so he knows what it is like to sit in your seat.

His session focused on something that sounds straightforward but turns out to be anything but: understanding the true cost and margin of your academic and athletic programs. I think what struck me most listening to Chris was his emphasis that getting this analysis wrong can be just as dangerous as not doing it at all.

Why This Work Matters Now

Chris opened by acknowledging what we all know: most institutions are experiencing declining enrollment and limited ability to grow net revenue. That reality means we have to find ways to either improve revenues or reduce costs — and to do that well, we need accurate data at the program level. He noted that the Delaware Cost Study, which many institutions had used as a peer benchmarking tool, was discontinued after the 2024 cycle due to a lack of respondents. That loss makes internal analysis even more important.

And yet, when he polled our attendees, the vast majority — roughly 95% — had never participated in the Delaware Cost Study, and only about a third had conducted a detailed cost of instruction study of their academic programs within the past three years. This is exactly the gap his presentation was designed to address.

The Framework: What Goes Into a True Program Cost

Chris walked through the methodology developed and used by NACUBO, which he emphasized has invested significant training resources into getting this right. At its core, the approach calls for allocating 100% of teaching faculty costs — not provosts or other central administration, but teaching faculty and deans of schools — either directly or indirectly to the programs they serve. If a faculty member spends 75% of their time teaching, 75% of their salary is attributed to instruction. Program-specific operating expenses round out the picture.

He also stressed the importance of starting with a clear definition of your programs. Using program prefixes and CIP codes — psychology, music, accounting, and so on — gives you a unit of analysis you can actually act on. Rolling everything into a broad category like "business" makes it impossible to identify which sub-programs are driving results and which ones are dragging.

One of Chris's most emphatic points was to resist the temptation to use a full-costing methodology — one that allocates overhead like the business office or advancement to academic programs. His view is that this approach obscures the real question you're trying to answer: if we eliminated this program, would it help or hurt us? Programs should be evaluated on their own performance, not burdened with costs they don't drive.

Reading the Results: Margin Dollars and Margin Percentage

Once you have program costs and revenues in hand, Chris recommended sorting programs by both margin dollars and margin percentage — because each tells a different story. A program with low margin dollars but a high margin percentage may simply be under-enrolled; investment in recruitment could unlock its potential. A program with high margin dollars but a low percentage may have too many faculty or sections that could be consolidated.

Programs with low or negative margins in both dimensions are the ones that require the hardest conversations — restructuring, sunsetting, or elimination. Chris cautioned against the instinct to immediately cut, but was equally clear that in the current environment, mission alone cannot continue to justify subsidizing programs indefinitely. The institutions that wait until they're in crisis with accreditors have no room left to make thoughtful choices.

Athletics: A Parallel Analysis

Chris extended this framework to athletics as well. He asked our attendees whether their institutions assessed the actual financial performance of each sport — looking at the net revenue generated by student-athletes minus the full cost of running the program — and just over half said they had. He encouraged those who haven't to begin, and pointed to the EADA Equity and Athletics reporting as the most robust benchmarking source available.

Some of his findings from working with institutions were striking. Larger rosters, it turns out, tend to correlate with better win records — pushing back against coaches who argue they can recruit or win, but not both. He also found that JV programs can be net revenue generators, and that coaches who aren't effective recruiters create compounding costs that go far beyond the immediate season.

Partnering Rather Than Cutting

Throughout the session, Chris returned to a theme I found particularly valuable: wherever possible, bring program directors and faculty into the analysis before handing down decisions. He shared examples of graduate programs that were slated for closure until the right enrollment leader identified that response times to prospective students were running into weeks — something no one in the finance office had known. A small investment in faculty attending recruitment events produced significant enrollment gains for an agricultural science program at a cost of under $5,000.

He also emphasized the value of creating a strategic growth committee — one that includes elected faculty representatives alongside financial leadership — to evaluate proposals, set deadlines, and monitor progress quarterly. Partnership, he said, produces lasting change in a way that top-down mandates simply do not.

Useful Resources Chris Recommended

Chris pointed to several tools worth exploring:

• The CIC Financial Indicators Toolkit — available through IPEDS data, provides faculty salary benchmarks by rank and region
• Lightcast / Jobs EQ — for labor market demand, wage data, and employment projections by CIP code
• Prospective Data Science — a subscription benchmarking tool (base service under $300/year) that uses AI to aggregate data from 990s, audits, IPEDS, and other sources
• NACUBO's Student Success Portal — a newer resource worth investigating as a potential replacement for Lightcast
• Compubo HR — for benchmarking faculty salaries at the program level

A Final Note on Timing

Chris closed with a point I want to leave you with: do this work before it is urgent. He described a call he received from an institution that was already in trouble — and by that point, all they could think about was cutting. The window for making thoughtful, strategic adjustments had closed. If you start this analysis now, you have choices. I hope Chris's framework gives you a place to begin. And as always, if you'd like to continue this conversation with Chris or with our team, please don't hesitate to reach out.