Higher education was already in trouble before the coronavirus.
At this moment, the focus is, as is should be, on how schools can reopen safely for fall 2020. But, beyond the immediate crisis is a much bigger issue. Almost all colleges and universities are going to have to change their fundamental business models in order to remain relevant and viable. For many institutions, this will be an existential crisis.
The multiple forces driving change were building long before the pandemic. Reductions in government funding, changing demographics, rising costs, new alternatives, and a loss of public trust in higher education have been topics for years. Rather than adapt to these forces, most institutions have been kicking the can down the road making only incremental changes.
In a post Covid-19 world, that is no longer possible. Suddenly changes that might have taken years or decades now must happen in months or a few years at best.
The prosperity and the security of the United States depends on the viability of our system of higher education.
We all have a stake in higher ed’s success for failure. With that in mind, it is important that we all understand what is happening. After a decade consulting in the higher education space, I have seen firsthand how unprepared many institutions are to adapt to the changing landscape. Given the complexity of the network of higher education institutions, some will fare better than others. The forces of change will affect different schools differently. Some will thrive; some will survive; and some will likely merge or close completely. All of higher education will certainly change.
Higher education is stratified, made up of some 3,000+ total colleges and universities. Approximately 20 million college students will enroll in the U.S. in 2020. 75% of them will attend public 2-year and 4-year institutions with the remainder enrolled in private non-profit and for-profit institutions.
Here is the outlook for these different classes of institutions in the years ahead.
Top Tier Schools: The rich will get richer.
The U.S. system of higher education is currently seen as the best in the world in large measure because of 100–150 “flagship” research institutions (think Harvard, Berkeley, Michigan, etc.). Nearly every state has one or more of them. Some are public and some are private. In any case, they are going to be fine no matter what. They have substantial endowments, superb reputations, and hefty research programs in medicine, engineering, physics, nano-technology and other leading-edge fields. Enrollment is not going to be a problem as these schools have 10 or more applications for every student space. There will still be challenges but they won’t be financial. These schools are where much of the innovation needed to drive our economy will come from.
Regional Public Universities: The outlook is mixed.
Then there are the regional public four-year universities. Think of any public college with a direction or location in its name like Central Michigan, Western Kentucky or San Diego State. There are hundreds of these schools, each serving a particular locale. The student body comes largely from within 100 miles. The focus is on undergraduate education with bachelor’s degrees in liberal arts, science and technology, teaching, healthcare and other disciplines that lead to employment.
In the aftermath of Covid-19, these schools are going to struggle to justify cost of tuition and fees for students who are concerned about student debt. Many have been having trouble meeting enrollment goals for several years. Most of them are to some degree victims of the decline in public support for higher education especially since the great recession of 2008. States have stopped funding college as a public good and forced increases in tuition. While there may be some research, these schools do not attract multi-million dollar research grants like the flagships do. So, they are very dependent on enrollment.
It is unlikely that any of these schools will actually close. Most of them are vital economic engines in their communities. These schools bring income into the community and create many secondary service jobs. Reducing tuition is not an option and may make things worse. There will be efforts to cut costs. Some of them will eliminate academic programs with resulting reductions in faculty and/or staff. Schools will delay capital projects and even eliminate some intercollegiate sports. Some states, like Georgia, have begun to merge their public institutions to save money. Without real innovation in how they operate, these schools will likely survive but struggle.
Small Private Colleges and Universities: An endangered species.
All across the country are small private colleges and universities with a long and proud tradition of offering a liberal arts education in a traditional residential setting. Some are religious, some are secular. Most have enrollments of less than 3,000 students and are very dependent on tuition. Many of them are in serious trouble. Costs are high, and what they have to sell is primarily the educational experience that includes small classes, a nurturing faculty, and a chance to develop one’s sense of purpose and direction. Enrollment has been a challenge for a while now and Covid-19 has compounded the problem. Without the residential experience, these schools are just not worth the cost.
The presidents and boards of these schools will have three alternatives: change, merge, or die. Most of these schools won’t have time to transform themselves because they lack reserves in the form of endowments or philanthropy to buy the time they would need to make necessary changes. The nation will be poorer if hundreds of these schools go broke and close, yet that is likely to happen over the next few years.
Community Colleges: Positioned to flourish.
Best positioned to survive are the community colleges. There are about 1500 of them in the US, most of them public. Nearly 50% of all students enrolled in public higher ed institutions are enrolled in community colleges. And for good reason. Almost all are open enrollment so anyone can apply. They make use of lower cost adjunct instructors and are flexible in developing academic programs that meet emerging needs in the marketplace. They serve a local constituency and are supported by county millages in many cases. Tuition costs are relatively low and there are no “frills” like football teams or residence halls. Many of these schools had already moved to online learning before Covid-19 and are well positioned on that score.
Community college can be a path to a 4-year degree but that isn’t necessary. What people get at a community college is vocational training. What we get as a nation are med techs, HVAC technicians, auto mechanics, and other similar occupations that society needs. What we don’t get are teachers, doctors, research scientists, engineers, and other high-skill professions unless students go to another institution. One problem for community colleges is that the average age of their presidents is about 67. When they retire there isn’t a good pipeline for training the next generation of senior leaders. But, that is a topic for another day.
For-profit Institutions: Not likely to be a major factor in the future.
The jury is out on this group. Ten years ago, everyone thought they would be a big force, but a variety of scandals have plagued schools that over-promised and under-delivered to students who didn’t get jobs but ended up with large student loan debts. Lawsuits and increased regulatory oversight have reduced their footprint. Most of the schools that have failed in the last five years have come from this group. The lesson here is that for-profit institutions tend to make decisions based on reducing cost and maximizing revenue. The results are that they do not deliver value and are not sustainable.
What’s Next: How colleges can reinvent themselves to thrive in the future.
While colleges need to transform themselves, there isn’t a one-size solution that will fit all institutions. What schools have traditionally offered is actually a bundle of services that were “sold” as a package. Those services are being unbundled and offered by others on an ala carte basis.
Here are the four key components that can be configured into a compelling promise that will attract students and create real value for all of us. Schools will need to find the right combination to match mission and market.
· Teaching and learning. Teaching and learning will be delivered in-person, online and in a hybrid mode. If done well, a lot can be done online. There is growing competition so instruction can be seen increasingly as a commodity. If it is just knowledge you are after you can go to YouTube or Coursera or a number of other places and get that for little or no cost. Increasingly employers are providing their own training. Everyone is going to get better at online teaching/learning as a result of Covid-19. Still, it is not a universal solution, especially where hands-on clinical or lab training is essential.
· Transformative experience. Going away to college is a transformative experience for many young people. Getting out of mom and dad’s house and interacting with people who are not like you is something the residential college life is uniquely suited to provide. Note that adult (non-traditional) learners are less interested in this experience. Hence, the explosion in online masters programs. Still, there is always going to be a market for this kind of unique life experience. Unfortunately, it is likely that this will only be available to those who can afford it and so it is less likely that there will be real socio-economic diversity that was an important part of that experience.
· Access to resources and relationships. It is hard to put a dollar value on the network that one develops in college. Just take a look at the network that Kamala Harris is able to mobilize as an HBCU/ Howard University grad and sorority sister. The greater the reputation of the school, the more valuable the network. Also, you will be able to get internships and alumni connections that are invaluable. You don’t get these connections through online learning.
· Certification of competency. Traditionally, the college degree is the ticket to a career or at least is sine qua non for getting a job interview. A Washington Post columnist recently asked whether you would rather have a Princeton degree or a Princeton education, the implication being that the degree is much more important as a ticket to getting a job. But that is something of a false choice. It is true that the education without the degree is worth far less in the job market. However, it will quickly become apparent if your degree is not backed up with real knowledge and skill. Also, check to see if Bill Gates or Steve Jobs had college degrees (spoiler — they didn’t).
The big problem for colleges is that there are alternative forms of certification that are eroding the monopoly on the magic ticket. You can now get a certificate in coding from Microsoft that will get you a good job without a college degree. The prevalence of competency-based certification is also increasing.
The future is going to be chaotic and uncertain.
Leaders in higher education are going to deal with that by embracing the ambiguity and finding a way to pull together the many stakeholders to come up with a compelling vision that will inspire the innovation needed to navigate that future. That is going to mean letting go of treasured traditions and comfortable rituals of college life. However, there is no choice.