Like any business, the University of Southern Maine has a problem: its bottom line (students) is being affected by the entry into the market of a lower-cost competitor (Maine’s community college system).

This is a finding of a new report, “A Southern Maine Imperative II,” commissioned by the university’s Board of Visitors to analyze the future needs and demands upon the three-campus system: Portland, Gorham and Lewiston.

“USM has been affected far more than the rest of the University of Maine System by the growth of the Community College System,” the report states, on its opening page. This competition has contributed, along with other factors, to USM’s financial difficulties.

Certain fiscal influences, like energy costs and state budget tightening, are beyond university control, however. The more imperative issue is finding and retaining the raw material that keeps USM in business: students.

Retention at USM lags; one-third of freshmen don’t become sophomores. Another third finish four-year degrees in six years, a choppy educational approach that only might be solvable, officials say, student by student.

Growth of community colleges has worsened this position. USM’s tuition is three times a community college’s, and asks for a four-year commitment, rather than only two.

How USM should change its approach and policies to counter this competition is an urgent challenge for its administration. But just like in business, this strong competition should benefit the university’s consumers: students.

Some progress is already being made. Members of the USM Board of Visitors speak glowingly about curriculum adjustments, both instituted and planned, to transform the spectrum of educational opportunities available for USM students. This is an important approach.

The rise of community colleges isn’t only about cost.

But curriculum changes – the carrot – are only part of the problem: USM administrators and officials must find a stick to address the factors that cause students to drop out, and also work to offset rising tuition costs.

More financial aid is one avenue. So is revisiting the appropriation formulas that support Maine’s university system, which USM officials accurately note were developed in a different era, and long before the Lewiston campus existed.

Yet throwing more money at students, and fighting to re-divvy a shrinking revenue pool, are not surefire solutions, either. And trying to compete with community colleges on cost is likely a losing proposition.

There are more opportunities in finding collaboration between USM and the community colleges, to use the latter’s lower entry cost as momentum to enrolling in the former to complete a four-year degree.

This effort is working here, between USM-LAC and Central Maine Community College.

Not only would this strengthen both systems, but the combined power of USM and the community colleges could make higher education even more attainable in Maine. This is a winning proposition for the state.

And, most important, for its students.