By Richard G. Mills, Jr.
Neglecting risk management poses long-term hazards for higher education institutions. Colleges and universities face numerous complex threats, yet risk management often remains undervalued. Administrators and trustees frequently view it as a cost center rather than a strategic investment in resilience. This misperception threatens financial stability and exposes institutions to financial, reputational, legal, and existential risks.
This article argues that underfunding risk management in higher education creates a structural vulnerability that institutions can no longer afford to ignore. We evaluate and discuss how budget pressures can translate into compounding legal, operational, and reputational risks and the long-term cost of neglecting this indispensable function.
Why Risk Management Is Undervalued
Underfunding of campus risk management stems from a structural bias. Unlike research, athletics, or student success initiatives, risk management rarely commands attention from boards or legislators. At best, it is perceived as a back-office expense and a necessary but non-strategic cost; at worst, as an impediment to innovation. But this view misses its essential function: not to halt progress, but to enable it sustainably. Risk management safeguards institutional reputation, finances, and mission, ensuring that bold initiatives do not collapse under avoidable crises.
Underinvestment also reflects a bias toward present demands over future protection. From Title IX litigation to cyberattacks and large liability claims, the financial stakes of campus risks are rising. Settlements now routinely reach into the tens of millions of dollars, and cyber incidents can paralyze entire systems. A single uninsured or underinsured event can quickly dwarf available funds.
Academic leaders often allocate resources toward visible priorities such as buildings, research, and recruitment rather than toward prevention and coverage. Risk management succe