Blog

Preparing for Change at America’s Colleges and Universities

America’s colleges and universities are in the early stages of dramatic change. For many, the concentration has been on the development of new academic programs, designed to differentiate academic offerings among institutions and create new revenue streams. For others, efforts to find efficiencies internally or through participation in consortia have improved the bottom line on the expense side of the ledger. These efforts to work within the framework of the existing financial model have been fruitful, especially since it is unlikely that substantial increases in revenue from tuition are likely to occur.

One thing is clear. It’s not enough to say that we should throw away the old financial model. In fact, it can be dangerous. Colleges and universities prefer to move prudently and methodically, with sometimes painfully slow attention to process. In shared governance, there are three groups that must be recognized – trustees, faculty, and administrators.

Coordination and buy-in take time. Otherwise, it’s the equivalent of throwing the baby out with the bath water. Colleges must have a solid foundation to thrive and upon which to implement change.

College Fiefdoms Can Hinder Change

The biggest problem is likely to be on the administrative side. Higher education institutions are like small cities with all of the complexity and potential for confrontation that exists in these political environments. Each administrative division often operates as an individual fiefdom. This is particularly problematic when trustees do not understand that their role is to put their noses in and fingers out of the tent as Cornell’s president, Frank H. T. Rhodes, once said.

The role of faculty can also be complicated, especially if faculty governance is weak or dominated by a few individual voices. Friendships among all parties can muddy the necessary distance between them when the difficult and sometimes unpopular administrative decisions must be made.

The first step, arguably more important than issues like strategic partnerships, any decisions on outsourcing, or participation in cost-saving consortia, must be to determine how best to integrate the various fiefdoms into a common institutional sense of self.

College Leadership Needs Authority to Make and Manage Change

It mandates that the senior leadership have both an ability to manage change and the authority to make it. And it starts with the value proposition. Based on the mission and history of the institution, colleges must ask themselves who are we and what image do we present to the world beyond the college gates?

These questions presume that a common platform exists through and by which all campus groups can communicate effectively. Writing in University Business a year ago,  American University’s provost Scott A. Bass noted that the University “utilizes more than 36 databases for different student-related administrative and learning management functions . . . Yet, there is little or no integration among these discrete data elements.” American University is right to call the question and smart to do so strategically since most institutions finds the same circumstances on their campus.

Dr. Bass asks the question: “Do these systems facilitate effective support for a student who has complex issues and who experiences multiple touch points throughout a given academic year?” The answer is clearly “no.” The effect can be to reduce student retention and graduation rates as frustrated students leave or transfer elsewhere.

In short, the haphazard approach to fiefdoms claiming multiple uses of technology across the campus does not support the student. It also fails to serve the institution well.

Coming Together Around a Common Institutional Database

For change to occur, there must be renewed concentration on how to build a common platform. At the institutional level, diverse databases encourage institutional bureaucracy. They are expensive to install, upgrade, and maintain. They often do not adapt well to solution upgrades. Further, the efforts to connect them are always difficult at best and can impair critical strategic decisions based on multiple inputs of research that must inform these decisions.

The overall point is that while change must occur on college campuses, it is not necessarily a bad or troubling moment. It requires that fiefdoms in critical areas like enrollment, financial aid, advancement, student affairs, career services, and athletics give up a little to support an institution now often at cross purposes with itself.

Change further assumes that a college or university understand its value proposition and be prepared to take the steps internally to support it. And it mandates that the board of trustees and faculty see integration as a way to connect the dots to develop a coherent strategy.

In the end, the integration of a college’s databases is an opportunity for the college community to come together. It is the right kind of efficiency designed to help a college create a more unified, service-friendly, and better-orchestrated database that serves its stakeholders. It is a strategic decision that must be led by the president.

On campuses suffering from cultural inertia, it must break with the older traditions of “we’ve never done it this way before.” And in the end it can be a seminal moment in the tenure of a president who has the courage to lead.

New Thinking Needed on How to Pay for College

Swirling around the debates over the high sticker price of higher education is a deeper conversation about the broken financial model that most colleges and universities continue to use to pay their bills. While the largest universities have more options based on the scale of their endowment, fundraising prowess, and research support, most public and private colleges are heavily tuition dependent.

State governments have been withdrawing their historic support for public colleges and universities. These institutions now increasingly rely on tuition, fees, and room and board to pay their bills. Each passing day, their finances look more like private colleges.

That’s not a good thing if higher education is to develop a sustainable financial model. Private colleges rely heavily upon a tuition model that presumes that a family pays based upon their ability to do so — that is, wealthy families should not expect to receive financial support from the college that their child attends.

The stated goal behind the model was to improve access and encourage diversity in all its forms by making college more affordable for students who qualify for support. They do so through financial aid discounting practices that places the burden of support on full-pay families to pay for the discount.

College Financial Aid Model No Longer Useful

Today a new reality has set in, based principally on the fact that the student financial aid model has run to the end of its useful shelf life. Until the early 21st century, it was possible for financial aid administrators to cobble together financial aid discounts, state and federal support especially for public colleges, and loans of various types to make a case to families about how they could afford to pay for college. But cracks began to appear in this practice as the gap widened between what colleges could piece together and what families could afford to contribute.

At some colleges and universities, including often those of very good reputations, the financial aid discount now exceeds 70 percent. It is possible to imagine a scene where their student residence halls will be full but the comprehensive fee received will no longer sustain the enterprise.

The number of “full-pay families” — those who can pay the full comprehensive fee — is decreasing along with the willingness of families to send their children to high sticker-priced colleges. Many of these colleges did not meet their fall enrollment targets in September 2017. Further these institutions often rely on merit scholarships, now extending into the wealthier income brackets. Wealthier families brag about the merit scholarships they receive to encourage their child to attend the college they selected.

When admissions officers calculate financial aid offered to the “set asides” for Division I athletes, academic programs, and special circumstance candidates of various types, there is very little flexibility remaining in a financial aid budget.

Tuition and Fees Aren’t Enough to Cover College Expenses

This aid budget depends on the institution’s ability to meet general college expenses through tuition and fee increases. But this is where the crisis occurs because American consumers have turned against high tuition sticker prices, especially since so few families pay the full price today.

When elite universities charge $65,000-$70,000 annually, the media focus on the extreme rather than on the more moderately-priced institutions that form the majority of America’s colleges and universities. But it is an open question whether the sticker prices over $40,000 resonate with the American public anymore.

It’s a mess with few supporters backing the old financial model upon which American higher education has historically depended to finance the enterprise.

America’s colleges and universities are certainly aware that they face a crisis of confidence, credibility and economics ahead of them. The question is how well and how quickly will they respond to this crisis.

Three things must occur:

The first is that higher education must recognize that its colleges and universities – whether public or private – face a situation that will not be ameliorated by outside factors like an improving economy or rising wages. The fact is that most American families believe that college is a right and not a privilege. They are less likely to devote the personal resources necessary to have skin in the game.

The second is that higher education must have an open, prioritized conversation about how to pay its bills. It is unlikely that a single partner such as the federal government will step in like a white knight on a singular mission to save higher education. A better policy is to determine the range and level of funding sources available to colleges across its historic funders. This includes both operational and capital support from all sources. The most important decision will be whether to keep the decentralized higher education system in place with reinvigorated and better-defined missions and purposes.

Finally, higher education must imagine the possible. It is likely that America’s colleges will see a wave of mergers, closures, and acquisitions over the next 50 years. If so, how will this be managed? For those institutions that have achieved sustainability, what are the terms that bring people, programs, facilities, and technology together to foster common agreement on what higher education contributes to America?

America’s colleges and universities have evolved successfully for nearly 400 years. They are nimble, creative and distinctive. Higher education must go forward with transparency, purpose and urgency. To begin, it must demonstrate its willingness to change and adapt.

Why American Higher Ed Should Care About Harvard’s Finances

Every solution offered by a college or university faces a pending crisis in a different way. Wealthy institutions have the resources to weather challenges by kicking the can down the road, often for decades. That’s why it is significant that Harvard University last week issued a warning about its financial constraints that every American college and university must heed.

The good news is that Harvard ended the 2017 fiscal year with a $114 million surplus, which is $37 million larger than last year’s surplus. Most of the surplus was due to the money the University saved by refinancing its debt.

Writing in the Boston Globe, Deidre Fernandes reports: “The university’s financial chiefs cautioned that the surplus may reflect a ‘high water mark’ for the foreseeable future – a sign that the financial disruption experienced by universities and colleges across the country is hitting the biggest brand in education, too.”

In Harvard’s annual report, Vice President for Finance Thomas J. Hollister co-wrote, “The business model of higher education is under enormous pressure. Large research universities have been to date somewhat less affected, but they are not immune.”

The sticker price of many elite institutions – now approaching $65,000 – $70,000 at places like Harvard and Boston University – fails to reflect their need to increase financial aid to make it possible for their students to attend their institutions. Fixed costs, including faculty and staff compensation, facilities growth and maintenance, and technology, for example, increase the pressure further.

Harvard’s concerns grow when the weak performance of its endowment, compared to many other richly resourced schools, are factored into the equation. This year, the Harvard Management Company reported that the University’s endowment grew to $37.1 billion, an increase of 8 percent, up from a 2% return in 2016.

That having been said, Harvard continues to invest heavily in areas like its physical plant. But what is perhaps most interesting is that the University is aggressively seeking new sources of revenue.

Even Harvard is Seeking New Sources of Revenue

To this end, Harvard is growing its continuing education and executive education programs, which are less dependent on financial aid to attract students. To illustrate: “Between 2015 and 2017, the income Harvard generated from undergraduate students increased by just 7 percent, and graduate degree programs brought in 11 percent more revenue. But revenue from continuing education programs jumped by 19 percent during that period, from $345.5 million to $410.7 million.”

Why Should Anyone Care About Harvard’s Finances?

Why should anyone else care what happens at endowment-rich Harvard? The University’s detractors come at them from many sides, of course, but most of them argue that a wealthy, elitist institution with a massive endowment is not a suitable object of pity. They respond that Harvard could self-fund its undergraduate colleges simply by drawing interest off its endowment.

What these detractors miss, of course, is that American higher education institutions serve a variety of purposes, offer different missions, have varied histories, and undertake their academic programs by relying on whatever sources of support that they can put together. Harvard does it better and for longer than most.

The fact is that Harvard has both a mission-driven institution and is economic engine that fuels the regional and national economy. The draw on its resources comes from innumerable needs, supporting its position as a global incubator, research and medical powerhouse. But the fact that Harvard should find new sources of revenue by looking at its continuing education and executive education programs has a spillover effect on the rest of higher education because the Harvard brand is so strong.

So, whatever you think personally what happens at Harvard bears watching.

The lesson from this year’s annual report is that America’s colleges and universities do not have a sustainable economic model, no matter who they are or how successfully they put their funding pieces together.

It appears that Harvard recognizes that its high sticker price, dependence on an uncertain economy’s effect on its endowment, and people-heavy and land-centric base require entrepreneurial solutions that did not matter before.

History of American Higher Education is at Inflection Point

The lesson for the rest of America’s colleges and universities is clear. We are at an inflection point in the history of American higher education. The way that American colleges and universities finance their academic programs is broken. For some, time is running out as their discount rates approach 70 percent, their fundraising remains weak or anemic, and their endowment returns do not offer the safety valve that Harvard enjoys. Those that can should use this time to plan for how they can survive by shifting priorities and approaches within their finance model.

One lesson is especially telling. A rebounding economy or improving wages, should these even occur, will not be sufficient to return America’s colleges and universities to a misty, distant past where revenue met expenses, even with increasing sticker prices offset by increased financial aid.

What is equally certain is that higher education is nimble and creative. Most institutions will likely find a way to modify what they must do to remain relevant. But it is no longer possible to kick the can down the road.

Derek Bok and the Crisis of Civic Education

In a recent thought-provoking essay in The Chronicle of Higher Education, Derk Bok, president emeritus of Harvard University, wrote eloquently about the failure of American higher education to provide civic education to college students.

Mr. Bok noted: “Political apathy is not evenly distributed throughout the population. Very conservative and very liberal voters are much more involved in politics than moderates are, thus intensifying the political polarization that is blocking compromise and bipartisan collaboration in Washington.”

Citing the National Assessment of Educational Progress, which evaluates the knowledge of America’s schoolchildren, “more than two-thirds of high school seniors scored below ‘proficient’ in their knowledge of civics and government.” He reports: “Half of all younger graduates did not vote in 2016.”

Does Education for Citizenship Have a Place in Higher Ed?

Mr. Bok suggests that not everyone in higher education sees civic education as a duty, believing, like Robert Maynard Hutchins, that “education for citizenship has no place in the university.” For these individuals, it is not an academic goal but a political one; hence, it is inappropriate for the academy to pursue it.

Yet, Mr. Bok supports working with faculty to develop accepted academic goals like deepening a student’s ability to think critically and reason effectively to develop an informed opinion that is balanced and nuanced. He notes that some student life initiatives, like service-learning programs, can improve a student’s commitment to community activity as can participation in organizations like student government.

In the end, Mr. Bok argues: “What the current situation calls for most of all is a comprehensive effort by every college to do a better job of what most educators claim to be doing already.”

Civics Education Often Divisive Topic on Campus

There is much to commend here, not the least of which is Mr. Bok’s willingness to take on what often quickly becomes a divisive topic on most college campuses. In many respects, what Mr. Bok describes is as much a failure to provide a clear sense of campus direction as a program deficiency.

The American college campus must become a better forum to mediate disagreements, engage students, and encourage consensus. The current national political climate demonstrates the danger in allowing the extremes to dictate to the middle.

  • It begins with finding a way to mix civility – which is different than academic and student freedom – with a respect for difference.
  • It’s about how individual members of a campus community at all levels relate to the community as a whole.
  • It accepts the role of social media but discourages the name-calling, badly-sourced or non-existent research, and breach of manners that earlier generations often knew to avoid.

One of the hardest tasks of senior higher education officials is whether to intervene when the politics are immature, uninformed, or emotion-driven. The best college campuses follow an approach that groups like the National Endowment for the Humanities employed back during the Mapplethorpe flare-ups in the 1980s. Their policy was to provide balanced programming that demonstrated historically that the NEH fully committed to freedom of expression. The NEH and similar cultural groups under attack said effectively: “Judge us by our history and the integrity, scholarship, and balance of our programs.”

Campus climate sets the tone for the best kind of civic engagement.

Faculty Alone Can’t Self-Correct Lack of Civic Education

It is insufficient also to imagine that the faculty alone can self-correct the lack of civic engagement on campus. Mr. Bok was right on two critical points.

The first is that those colleges and universities with the best-defined sense of self are the most likely to create a culture of civic engagement. They mix academic and student life programming to create a civics foundation.

Second, those whose academic principles are founded on the liberal arts are best equipped to infuse a sense of shared responsibility – the basis for a good civic education – into coursework and the thousand teachable moments that occur outside the classroom.

It may be that what we have lost is a willingness to differentiate our programs by the core values inherent in a liberal arts education.

The simple argument is that the liberal arts teach us to become educated citizens. But, in fact, their reach is far wider and deeper than that. They teach us to think but not how to think. They encourage us to articulate, write, apply quantitative methods, use technology and work in a collaborative setting.

Higher Ed Must Be Fearless in Articulating Its Value Proposition

This represents a solid foundation that permits students to make informed judgments, especially in the age of social media. College and universities must become better and more fearless at articulating their value proposition. It’s not so much that they need to teach civics lessons that their students should long since have been learned.

Rather, colleges and universities must create a dynamic, information-driven, creative and entrepreneurial culture where to be a part of global society mandates the skills that make civic education vital again.

Is Change the Biggest Challenge in Efforts to Reorganize Public Higher Education?

One of the more interesting and at times alarming changes in American higher education is the redistricting of public college systems in various states. The most active discussions – some of which produced radical change – have been in states like Vermont, Pennsylvania, Georgia, Maine, New Jersey, and Wisconsin.

In Vermont, higher education officials have merged Lyndon and Johnson State Colleges to create efficiencies in their region. Taking a different tack, Pennsylvania opened discussions on whether to merge colleges within its state system, producing a report that ultimately called for no dramatic changes. In Georgia, a more systemic “rolling” reorganization occurred, with consolidation affecting 14 state campuses unveiled in phases as the reorganization continues.

Wisconsin’s Comprehensive Reorganization of Higher Education System

Wisconsin’s leaders have taken a different approach, favoring a comprehensive reorganization of the state’s public higher ed system. Following an unsuccessful effort to split the flagship Madison campus from the rest of the state university system, lawmakers approved appropriations that cut $250 million from the system’s budget. They also stripped tenure and shared governance protections from the law. More recently, faculty objected to new policies that punish students who disrupt speakers and that give the regents more power in hiring, including administrators from outside academe.

The proposal will merge all 13 of the state two-year campuses into seven of the state’s four-year universities. The Wisconsin Technical College system will not be affected. The system’s president, Raymond W. Cross, argues that this approach will increase access and reverse the declining enrollment of the two-year campuses. It will encourage more students to pursue a four-year degree and better reflect the demographics realities of an aging population and a shift from rural to urban areas. Specific details remain sketchy.

Faculty Call for Slower Change Unlikely to Win Favor with Public

The faculty are, by and large, deeply concerned about the proposed changes. Budgets are, after all, rationing tools. Efforts to save money may do little to improve what many faculty believe to be a declining position as they fight budget cutbacks and perceived threats to academic freedom and shared governance.

Many faculty are calling for a more orderly, slower, and structured approach that is systematic and research-based with substantially broader input from them. For these faculty, the process matters.

This strategy may buy some time but it is unlikely to win in the broader court of public opinion. It’s an “inside baseball” tactic that will cast concerned faculty, staff, and students as proponents of cultural inertia who are out-of-touch with the needs of a global workforce and the tolerance of taxpayers to foot the bills for the growing cost of higher education.

The public will have little interest in a public drama about how appointment and tenure decisions will be made in a combined system.

Some Support for Merger of Community Colleges into Four-Year Campuses

The merger of the community college system into the seven four-year public campuses may or may not be a good idea. In most respects, it’s up to the voters of Wisconsin to decide what they wish to support with their tax dollars.

Some of this decision is already obscured by the lack of transparency that went into the planning before the Wisconsin system announced the proposal.

And yet, the primary motivation behind whatever turns out to be the outcome must answer the question of how best to provide access and affordability for Wisconsin’s college-bound students.

What Solution Will Provide Students Access, Affordability?

This is where both sides can come together. They will need to demonstrate transparency, open communication, clarity, precision, and an eagerness to assess a drastic reorganization like the one proposed.

To foist change on a higher education community that values process will not work. To maintain an inefficient higher education system that is not nimble enough to react to changing demographics and new workforce needs is equally impractical.

Yet there are broader policy questions that must be immediately addressed.

What is the purpose, mission, and value proposition of the community colleges and the state four-year public colleges? Are they the same or different? Does their history correlate or were they organized in their hiring, facilities, and program development for different reasons and designed to promote different outcomes? Surely the institutions are better than chess pieces that can be moved around to suit demographic and budget projections.

What is the value to this merger for the students and taxpayers? If the system can demonstrate that this change serves students better and meets the needs of Wisconsin’s workforce, there is value in developing an agenda and timeline for this merger, especially if there is broader input from the public system’s stakeholders.

But there is also a responsibility to demonstrate beyond a reasonable doubt that such changes will also create new opportunities, basic economic efficiencies, and enhanced opportunities for innovation, creativity, and collaboration.

It’s unclear, for example, if the Georgia reorganization has accomplished much of what its officials promised in these areas.

The takeaway from Wisconsin is that changes are coming in higher education, including for public colleges and universities. What isn’t clear is if the process for promoting change can withstand the challenge of making change happen.

How Should Americans Pay for College?

As reported last week by Ashley A. Smith in Inside Higher Education, one of the most interesting developments in higher education is how the growing concern over high tuition sticker prices is playing out in state and national politics.

Much of the discussion is a good-hearted effort to make college more affordable, especially for middle class students and their families. These efforts are noble and the cause is just.

Free College Tuition: A New Entitlement for the Middle Class?

There is also some hint, especially at the state level, that programs that address high tuition sticker prices do well in polling, especially for candidates with broader national political ambition. These programs leverage the ability to redeploy state budgets, or seek new revenue, to craft a new middle class entitlement.

While the approach may vary, these programs seek tuition relief. Referred to generally as “college promise” programs, they are tuition-free initiatives for community colleges, and in some places, four-year public colleges. They have been rising in popularity across the United States.

The “college promise” programs raise an important question in American society: Should a college education that is increasingly an entry–level expectation for millions seeking full-time employment be a right or an expectation?

It’s against this backdrop that the non-partisan College Promise Campaign launched by President Obama and the Educational Testing Service recently released reports exploring what they thought were five promising models.

Model 1: Children’s Savings Accounts Plus College Promise

The first approach supports payment by combining children’s savings accounts with a college promise model. The goal is to offer an option to increasing debt, expanding college access to families who are loan adverse or beset by rising debt before they graduate. In this model, the City of Oakland has already raised $25 million of their $35 million goal to support multi-year scholarships to supplement the children’s savings accounts.

Model 2: Publicly Funded “Free Tuition”

The second model may be the best known among the group, pioneered already in states like Tennessee and New York. The financial backing comes from strategies like tax credits, tax increment financing, outside philanthropy, and lottery revenues. Its impact, especially in New York, which has the largest number of private colleges in the nation, can be dramatic and deleterious to private colleges, particularly in states where the public-private mix is more balanced in favor of them.

Model 3: Mix of Public-Private Philanthropy, Partnerships

A third model uses philanthropy and public-private partnerships to raise support for college promise programs. It can be stand-alone, using individual donors or corporate support, or can be backed by a public-private mix, like the Michigan Promise Zones. In this case, Michigan uses an increase in the state’s education tax to mix with private donations.

Model #4: Outcomes- and Future Income-based

The fourth approach calls for the use of outcomes-based models in which the student might receive a $10,000 scholarship but must pay it back through a deduction in future earnings. If a student earns less under this income-sharing agreement, then the student may end up paying less than the $10,000. Purdue University’s “Back a Boiler” program is a good example.

Model #5: Federal Support for Two Years of Community College

The final model examines the role of the federal government, especially after President Obama’s proposal that would have made two years of community college free nationally with states partnering on the tuition bill. The authors of this report think that the federal approach should not pick winners and losers but should help states stabilize state support for colleges and students by incentivizing them.

Higher Education as a Public Good with State-Specific Solutions

There’s much to commend here. There is a predisposition in the report findings to argue that the federal government should not manage a centralized program that would increase bureaucracy at the federal level. There is a recognition that the best solution might be different in each state, depending upon the mix of colleges and universities, level of tuition paid, and the workforce needs in the region. And perhaps most significantly, there is an appreciation for higher education as a public good.

The report findings suggest that education is a right and not a privilege. It’s a fundamental debate that must be settled in an era in which the expansion of entitlement programs is unlikely.

Support for Higher Education is a Shared Responsibility

Yet at the same time, its authors agree that support for higher education must be a shared responsibility among many players. This better suits the national fiscal climate. What is less clear is that one of the partners within shared responsibility must be the student and their families. For this to work, all participants must have skin in the game to the extent to which they are able.

There is a political truce that will also need to be worked out among the various higher education sectors.

This begins with an appreciation of the contributions that each group, including private higher education, by educating the public and serving as a critical economic engine in many states. It will also mean that the role of each sector, including the value proposition for community colleges for instance, must be understood to better justify state support for access and choice.

Without defining the purpose and outcomes across the state and federal government programs that support higher education, it is unlikely that a coherent and seamless higher education pathway can develop. But the models described show great promise.

And that’s a good news story.

College Admissions Problems Need Systemic Solutions

Scott Jaschik recently interpreted the findings from the 2017 Survey of Admission Directors, sponsored by Inside Higher Education and Gallup and drawn from a sample of 453 admission directors. While the full discussion of these findings is too complex for this space, the general conclusions, especially those specific to enrollment patterns, are telling.

Nearly two-thirds of colleges missed enrollment targets

The most startling finding is that “only 34 percent of colleges met new student enrollment targets this year by May 1, the traditional date by which most institutions hope to have a class set.” This number is down from 37 percent a year ago and 42 percent two years ago.

At the public doctoral institutions, the story was a bit more rosy, but even there only 59 percent of the institutions met their May 1 enrollment target. Only 22 percent of public/bachelor’s/master’s institutions, 27 percent of community colleges, and 36 percent of private colleges and universities met their May enrollment targets.

This is a growing issue since most colleges and universities are heavily dependent on tuition revenue; hence, the size of the incoming and returning classes directly impacts their financial bottom line.

Admissions leaders see fundamental shift in enrollment trends

The reaction of admissions leaders is especially interesting. For this year, 55 percent said that they were very concerned while 30 percent said they were somewhat concerned. This number increased slightly from the 54 percent who were very concerned a year ago and more dramatically from the 31 percent who expressed deep concern two years ago.

There seems to be a growing recognition that the numbers will not support older, more favorable patterns of enrollment. In short, admission officers understand that something fundamental has changed.

That’s a good beginning for those worried about how demographics, consumer whim, political expediency, sticker price, tuition discounting, and retention and graduation rates intersect to produce this softness in the market.

The IHE/Gallup survey also looked at how colleges and universities are reacting to this softness, asking about the tools that admissions officials will use to strengthen their market share. Among the key findings:

  • Many colleges, especially private institutions, appear to be focusing recruiting strategies on students with the capacity to pay full tuition and fees.
  • In the realm of international student recruiting, many say that American higher education has become too dependent on students from a few countries, but most admissions directors don’t think that’s true of their institutions.
  • While most colleges don’t check applicants’ social media, some do — and some applicants are being rejected or having acceptances revoked because of their posts.
  • Officials at many colleges, more public than private, say they are stepping up recruitment of rural and low-income white students in the wake of the election, and a small minority of colleges is stepping up recruitment of conservative students.
  • Admissions directors strongly believe that higher education has an image problem with ramifications for enrollment patterns — and that image problem may be the worst for liberal arts colleges.
  • Admissions directors — from both public and private institutions — believe they are losing potential applicants because of concerns about debt. But private and public college admissions leaders differ on how much debt is reasonable.
  • The idea of free tuition in public higher education is seen by most private college admissions directors as a threat to their institutions. While admissions directors in public higher education are more open to the idea, they have areas of skepticism as well.

Enrollment solutions being considered are incremental, not systemic

What’s striking about the tools employed by the admissions officials is that they are tactical and incremental. Those surveyed do not appreciate that the solution must be more comprehensive and linked to a broader view of how higher education must adapt to the complex intersection of the changes that are buffeting it. Their solutions are scattershot and more like a band-aid applied to surface wounds, with no apparent connection among the challenges and opportunities that American higher education faces.

The problem is simple to diagnose. America’s colleges and universities utilize operating and financial models developed in the 1960s and 1970s that no longer work for them.

It was possible to disguise the growing crisis now affecting higher education when improving demographics, state and federal government policy, and a simple “revenue must meet expense” financial accounting successfully disguised what was coming. The assumption was that rising family incomes would overcome recessions and any attempt to cap revenue built into older tuition models. But the global economy has changed and the path ahead is far less certain.

That’s not to say that the sky is falling on America’s colleges and universities.

Each institution must find its own unique solution because their historic circumstances, market positions, and financial resources differ.

It is a call for action. The trustees, administrators and faculty must have the stamina to lead through creative solutions and at a faster pace than the incremental changes suggested by the IHE survey.

Is the U.S. Losing the Global Battle for New Talent?

The Boston Globe recently reported on the decision by record numbers of international students to choose Canada when pursuing their higher education goals. Reporter Laura Krantz noted:

“Some reasons are longstanding – fear of gun crime in the United States and cheaper tuition up north. But the 2016 election, and with it Trump’s travel ban and what many see as the demonization of foreigners and immigrants and a new wave of racism, have created a post-Trump surge at Canadian colleges.”

At the University of Toronto, the number of foreign students who accepted admissions offers increased by 21 percent. In fairness, Canada has increased its international recruiting goals to spur economic growth. It has 353,000 international students today but plans to increase the number to 450,000 by 2022.

Overall, the number of international students has increased 92 percent in Canada since 2008. Ms. Krantz relates: “By comparison, the United States has about one million foreign students and a population ten times the size of Canada.”

International Student Enrollment Declines at U.S. Colleges, Universities

Elizabeth Redden reported similar findings in Inside Higher Education earlier this month after interviewing about two dozen university officials. She found:

“…no consistent, unifying trends emerge, but some are reporting a slowdown in the flow of students from China and declines in graduate students from India, two countries that together account for nearly half of all international students in the U.S. Universities also continue to feel the effects of the declines in enrollments of Saudi Arabian students that began in 2016, after the Saudi government tightened up some of the terms of its massive scholarship program.”

Is the U.S. Losing Its Competitive Edge with International Students?

This raises the important question about how American colleges and universities present their value proposition to international students. Ms. Redden notes that Dane Rowley, international admissions director at California Lutheran University, suggests:

“In some ways it’s really good; the accessibility of international education is expanding for students, so they don’t have to come to the U.S. as the be-all, end-all of international education. It just happens that it’s coming at a time when the U.S. is almost abdicating its international edge with international students.”

Ms. Redden further reports that Rahul Choudaha, executive vice president for global engagement, research and intelligence for StudyPortals, an online international student marketing and recruitment platform, surmises that large research universities: “… seem to be less hurting than the other categories, because they have a much longer history of enrolling international students, but also they have a better brand than the other institutions that joined the international student wave in the last decade or so.” By contrast, he said,

“Institutions which are not perceived to be high ranked or are not located close to major cities or [that have not] experienced challenges with student experiences or [are] over-reliant on few markets (e.g., Saudi or China or India) will be the first to get hurt. Many institutions that were late entrants in building their capacity for international enrollment will be the first to lose in this wave of declining international enrollment for fall 2017. The multiplier effect of financial implications of lower fall 2017 enrollment over next two to four years [is] significant for institutions already hurting.”

Mr. Choudaha argues: “The years of fairly easy growth may be over — at least for many universities, and at least for now. Universities may have to work harder to keep their international enrollments steady, or at least to prevent precipitous drops.”

Fewer International Students Hits Colleges’ Revenue Stream

These changes have important policy implications for American higher education. At smaller colleges that are less well known, the implications to their financial bottom line can be enormous.

The decline in international students destabilizes the tuition base and may dramatically affect net tuition revenue on which almost all of these institutions depend heavily.

It looks like American colleges and universities will suffer the most in the battle between the economics that helps them be sustainable long term and the politics administered by the US State Department.

US Immigration Policy Hinders International Students’ Ability to Work After Graduation

The problem is complicated because international students face additional concerns over their ability to obtain US work visas after graduation, further depressing the number of international students in American universities. This is not a problem in Canada, for example, especially since the Canadian government had instituted policies making it easier for international students graduating from Canadian universities to obtain work in Canada after graduation.

Perhaps the most troubling aspect is the sense that American higher education is suffering a public relations debacle, whether because of the Trump Administration’s political agenda or a sense by the students that America is no longer a safe or welcoming place for them.

This will have long-term implications for the American workforce, especially since the workforce benefits enormously from the talent available after the graduation of non-US-born graduates.

If the nationalism that polarizes much of America continues, the impact will damage US international standing further and weaken the growth of the American economy.

Has anyone really thought this through carefully?

Higher Education and the Battle for Amazon’s Next Global Headquarters

Multiple media reports appeared last week about the efforts by American cities, backed by their state governments, to lure the merchandizing giant Amazon’s second global headquarters to their regions. The company will entertain proposals until October 19.

Amazon set general parameters and has a history in Seattle that forecasts what mix of opportunities it might seek in this $5 billion expansion that may produce as many as 50,000 new jobs. The stakes are high for the North American cities — including Denver, Minneapolis/St. Paul, Dallas, Toronto, Pittsburgh, Austin, Atlanta, Washington, and Boston — that will likely make serious bids for Amazon.

Boston wins on points for the following reasons:

  • Boston recently attracted the global headquarters of General Electric into a strong, entrepreneurial, global-based economy.
  • Boston has a well-connected international airport.
  • Its winter weather is no worse than what hot and oppressive summers offer in Dallas,
    Atlanta, Austin, and Washington.
  • The Greater Boston economy is healthy and diversified.
  • Boston operates one of the country’s largest public transit systems, now being upgraded after years of neglect.
  • It can offer or piece together large tracts of land to create a new Amazon campus near its thriving downtown.

Boston also has a strong sense of self that mirrors the social, psychological, and cultural mix that also makes Seattle so attractive to Amazon. In fact, Boston’s potential is enormous. It ranked third in A. T. Kearney’s Global Cities 2016 Outlook study. This study looked at both a city’s current performance — based on business activity, human capital, information exchange, cultural experience, and political engagement — and its projected success, based on how personal well-being, economics, innovation, and governance have changed over time.

Obviously, the City of Boston and the Commonwealth of Massachusetts have a role to play in the bid for Amazon’s headquarters. It’s complicated politically by the run-up to the 2018 elections and the ability and willingness of some bidders to buy Amazon’s commitment through cash and regulatory and tax incentives.

Massachusetts’ politicians should capitalize on a full range of existing programs and incentives but focus on improvements that would benefit its citizens – especially transit upgrades – to answer local questions about “what’s in it for me” rather than try to outbid others financially.

Amazon’s vision must be tied inexorably to a broader, more encompassing and inclusive vision for New England in the 21st century.

Boston’s Bid for Amazon Must Be Built on its Culture of Innovation

Where Boston truly pulls ahead of potential suitors is on the dynamics of its creative culture. Boston rose into the ranks of global cities because it reinvented itself over the past 40 years, while maintaining a historic commitment to wealth management, defense, insurance, and manufacturing, among other core industries. In the eyes of many, it has become the leading example of an “eds and meds” culture, anchored by global heavyweights like MIT and Harvard.

The foundation upon which Boston’s bid for Amazon must be built is higher education writ large.

New England’s colleges and universities have produced a culture of collaboration, creativity, and innovation that permeates its economy, particularly in biotech and medical research — a culture that matches the creative mix of cities like Austin.

What is different, however, is the depth and diversity of the collaborative culture that took root in New England. There is simply more of the historic ingredients available at a scale, maturity, investment capability, and management expertise than possible among other bidders. Visiting Kendall Square or the Seaport District, you sense it as you feel it.

Higher Ed Leadership Must Step Forward to Make Boston’s Case for Amazon

By challenging local leaders to imagine the possible, my hunch is that Amazon was not looking to extract the most ransom but more likely interested in seeing what creatively might emerge to judge its best fit. And this is where higher education leadership must step forward. Even the strengths associated with MIT and Harvard will not win the bid.

The core argument must be that Boston has produced the best model for nurturing the next creative generation in America. In doing so, Boston must also make the case as the logical choice to set Amazon’s future strategically within a global economy.

It begins with New England’s colleges and universities whose combined size, overall quality, skilled alumni and student bases, regional work ethic, and collaborative integration provide the resources that Amazon needs.

Almost 100 colleges and universities are within a two-hour drive of Boston to nurture this creative energy — a fact unmatched elsewhere in North America.

Beyond a skilled labor force that can be rapidly grown, higher education must offer concrete examples of collaboration that point to innovation and re-imagination. Massachusetts has come a long way from a manufacturing economy once based on shoes, textiles, and machine parts production, banking, insurance, defense, and electronics.

Boston became a biotech powerhouse over the past 20 years, for example, because its leadership – especially in higher education — could imagine the possible.

Higher education is the economic engine that built the booming Boston that we know today. In the end, sometimes money and tax breaks aren’t always enough. In its bid for Amazon, Boston must demonstrate why.

Fighting Back Against Taj Mahal Consumerism in Higher Education

The first indications are in on how the academic year is likely to go. In the pomp and ceremony that surrounds the opening of the school year, deep concerns emerge behind-the-scenes in all but the best endowed institutions as the numbers come in. There are no alternative facts to hide what an institution will face. It’s the “is what it is” moment for America’s higher education.

Colleges and universities have known what the composition of their incoming classes will be since last May when a fairly complete freshman profile emerged. They completed summer renovations on facilities and monitored their multi-year building projects. And they have matched their staff, especially faculty, to the size and needs of the incoming and returning student bodies to keep their student/teacher ratios in line.

But the late summer presents more statistical evidence of what is likely to happen in the coming academic year. The most telling evidence is financial:

  • What was the summer melt — those who intend to enroll but don’t arrive — of students like?
  • Did the freshman class meet the enrollment projections?
  • Did the Office of Financial Aid meet or exceed its budget?
  • What will federal and state support look like, especially at public institutions?
  • Were capital projects delivered on time and on budget?

Financial Questions Dominate College Leadership Discussions

Since most colleges are so heavily tuition-dependent, these financial questions increasingly dominate senior leadership discussions each fall.

The cold facts are that colleges are capital-, technology-, and labor-intensive institutions. There is very little discretion available to them in an annual budget.

And the numbers will likely confirm soon that net tuition revenue is essentially flat for yet another year. Further, many of them, including some very good schools, did not meet their internal enrollment projections.

The financial model at tuition-dependent colleges and universities that support their people, programs, and facilities no longer works.

Clearly, higher education is going through a process in which it must reevaluate how to pay the bills. There are ways to put the financial pieces together differently, drive efficiencies and cost savings, and look to outside partnerships to reevaluate how to make the educational enterprise work without destroying the historical foundation upon which colleges and universities are built.

Student Residential “Palaces” Symbolize Excesses of College Spending

One example is the Taj Mahal residence hall. These are often spectacular facilities with amenities that exceed anything that most students – even those sharing apartment rents – will be able to afford after graduation. The “build it and they will come” theory of facilities design and enhancements has serious drawbacks. Its presence draws attention to the inadequacy of the current financial model.

These residence halls symbolize the excesses of American higher education, especially the failure of a college to live within the means that would dampen tuition sticker price increases.

The facts are that it is unlikely that higher education institutions need to put so much cash into development of these student residential palaces. If they do, private developers should bear the cost of their construction, assuming that they can maintain quality and create efficiencies that a college is unable to do using in-house expertise to moderate the cost.

In fact, in many cases colleges should be moving out of the student “hotel” business, using a progressive redesign of their student life program to achieve broader institutional strategic objectives that go beyond these luxurious student residences.

Colleges must also find a way to diminish the need both to treat fully depreciated student housing as a cash cow to shore up their general programming and re-capture much of their upper division students for whom they may not currently provide housing.

Focus on What Students Truly Need in Residence Hall

There are larger questions drawn from these trends. When is more just more?  And, what do students actually need?

Let’s assume that students need a residence that has decent square footage and is well-maintained. They should be clean, have adequate electrical capacity for their growing number of technology-related products, quiet HVAC for heating and air conditioning, and private or semi-private bathrooms, depending on the configuration of the facility.

That’s enough. They do not need in-house pools, exercise facilities, cafes, or in-suite  laundry facilities. That’s too much.

Technology, Connectivity Top List of Student Needs

In fact, if a college or university thinks strategically about what tops the list of students needs, they are likely to hear that it is technology – and specifically, connectivity.

The ability to connect to the outside world is the great leveler for colleges and universities that break down the geographic, social, and cultural barriers that all institutions face in different ways.

This is an area of continuing concern on college campuses.  It is a particularly serious problem on rural campus where social and cultural options are more limited. Technology is a large, recurring expense for most colleges, especially since demands shift and technology changes with amazing speed.

Solution Will Require Partnerships

The solution will require new and imaginative partnerships among colleges, business and industry and their providers. It may be that fewer dollars – or perhaps more private partnership dollars – can be put into non-core, non-academic facilities like residence halls to pay for other expenses like technology.

Whatever the solution, colleges must think strategically by looking to the consumer demands of their students and less to the mindless “rock wall” amenities of their competitors.

  

A Guide to Prepare for Life After College

Almost 21 million people attend some variation of a college or university in the United States. For some, the purpose is obvious – to improve their skills, increase their wages, and enhance their marketability in the workforce. But for many – especially those in the traditional 18-22 year cohort – the reasons may not be as clear.

For many of these young students, the goal was to get into college. Most residential liberal arts campuses provide an often bewildering set of opportunities to explore, try out new things, and form or challenge personal assumptions.

Colleges create the opportunity for students to imagine a future — one of the best justifications for the value of a college degree.

In American society, college is the best and sometimes last opportunity for a student to grow within a carefully prescribed set of protected parameters. It can be an idyllic moment when friendships form and core beliefs take hold, free from many of the pressures that will beset new graduates after they enter the job market.

smiling woman in cap and gown

College is also a perfect moment for a student to postpone the future, especially for those who may not have figured their future path. It’s further complicated by the nature of the workforce into which they will enter. College graduates seldom transition into a first job that they will hold until retirement. There’s little chance for a seamless pathway to emerge, no matter how much introspection and reflection occurs in the quiet moments of college life. The global job market changes too rapidly.

In fact, it’s better to prepare generally – acquiring skills that liberal arts training provides – including the ability to speak well, write, apply quantitative methods, use technology, and work in a collaborative setting – than to assume that more narrow training will open the first doors to productive employment. But this reality does not mean that students can hide their head in their books, extracurricular activities, and friendships.

Post-Graduation Outcomes are Where Rubber Meets the Road for Colleges

This is where the rubber meets the road. Colleges do a wonderful job at inputs, likely because inputs prepare students for a successful classroom experience. They are also improving their assessment capabilities, often because of pressure from discipline-based and regional accrediting associations. But they are weakest at outputs – the kind that prepare students to enter the workplace successfully.

Many colleges tout their graduation placement records. They eloquently promote the percentage of their students who find employment and take advanced degree training within six months after graduation.

Graduate placement stats are a good indication of success but imperfect at best. Colleges with professional degree programs like business, engineering, and nursing will logically have higher placement rates because the market aggressively seeks those graduates. Other strong “pre” professional schools that prepare students for advanced degrees in law, medicine, dentistry, and graduate programs like health sciences and public policy may also expect higher levels of placement.

There are two problems with using graduate placement as measurement of success.

The first is that a college or university normally gears its career center toward programs that support employable majors. While there are exceptions, it’s hard to find a college career center that supports humanities majors as strongly as it assists the engineering and business students. Second, the students are not motivated – especially self-motivated – to use college resources wisely or prepare for life after college.

Students Must Take Responsibility for Future Before Graduation

And that may be the next lesson for colleges to learn. Students – soon to be alumni and graduates – must take some responsibility for their own futures. While colleges can provide better tools for graduates in all majors to succeed in their employment searches, the student must also be encouraged to use the four years wisely. It’s imperative in a global market that students prepare for what’s coming.

It begins by encouraging colleges and universities to be more intentional about their student life programs:

  • What does an institution hope to teach in the thousand teachable moments that occur outside the classroom?
  • Does it offer a residential life program beyond the classroom and laboratory experience that introduces students to communal living and then encourages progressive choices in a controlled experience to prepare them for independent living?

Students Must Be Thoughtful Advocates for Their Own Futures

Further, should students also be as intentional about their college extracurricular experiences as they are presumably about their academic careers? Some students will have the luxury to seek unpaid internships, externships, and summer employment that prepare them for work after graduation. Others need to work when they are not in school to pay their tuition and living expenses, beyond grants and loans.

Whatever the situation, students can develop an individually tailored strategy that introduces them to the workforce, even if it means only on a volunteer basis.

For students of limited means, having to work can differentiate them from their more fortunate peers as individuals better equipped to be successful after graduation.

Whatever the circumstances, students must learn to use the resources available to them. They cannot put off their future nor be overwhelmed by the challenges it takes to make a healthy career happen. It begins with a thoughtful self-examination and ends with the recognition that they may ultimately be their own best advocates.

As the Ivy League Goes…So Goes American Higher Education?

Brandon Busteed, the executive director for education and workforce development at Gallup, wrote a stimulating and thought provoking op ed earlier this month. The article’s title captured Busteed’s summary opinion: It’s Time for Elite Universities to Lead in Non-Elite Ways.

Mr. Busteed argued that America’s colleges and universities have traditionally followed the lead of America’s most elite institutions, an approach he argues has produced an “arms race of extensive new facilities, substantial growth in administrative staff, and the expansion of postgraduate degrees and programs.”

ivy covered wall and window
Citing the Wall Street Journal, Mr. Busteed reports that these trends caused 30 years of unprecedented growth in tuition rising “more than 400 % since the early 1980s and far outpac(ing) the cost increases of all other goods and services during the same time frame.” Busteed concludes, rightly so, that the pace is unsustainable.

For Mr. Busteed, the solution is for elite institutions to lead in non-elite ways. This does not mean simply ratcheting up financial aid since more aid is not the same as reducing costs. Instead, he asserts: “the real conversation should be about how to reduce the actual cost of college – and that is the difficult conversation higher education leaders don’t want to have.”

His solution is for elite colleges and universities to both talk the talk and walk the walk. Specifically, they should offer “associate degrees, certifications, non-accredited boot camps, employer- or industry-specific workforce programs, and even build…active partnerships with their local K-12 school districts.” He wonders “whether elites will have the foresight and the will to lead us in that direction.”

Change Often Moves at Snail’s Pace Especially at Elite Colleges and Universities

First, Mr. Busteed is right to infer that America’s colleges and universities are often places of cultural inertia. On most college campuses, process overrides other considerations. Shared governance among trustees, staff, and faculty often produces thoughtful change.

But change can move at a snail’s pace, especially at the handful of well-heeled elite colleges and universities relatively unconstrained by financial, political, or cultural pressures.

It’s a kind of “rule by committee” at times in which winning the debate can be as important as settling on the policy direction. The process can look more like the production of sausage even if the end result is appealing.

Less Wealthy Colleges & Universities Often Most Innovative

Second, change is hard. But the advocates for change face unique and idiosyncratic differences on every campus. Rather than argue that less wealthy colleges follow the elites, it may be just the opposite.

Under-endowed colleges and universities are the most willing to make change. Simply put, they have no choice.

These institutions are tuition-dependent and their survival requires some mix of planning, gambling, and luck. American higher education is not a monolithic pecking order in which the less fortunate emulate the wealthy. Those days ended in the last century when financial aid discounting disrupted archaic financial planning models to produce the current financial crisis in higher education.

Third, American higher education is highly decentralized. Expanding graduate and professional degree programs means very different things at a major research university compared to a rural, four-year liberal arts college. Further, colleges identify what they do and what programs they offer by their mission and purpose. Each category – indeed, every college and university – has a different purpose. Not all of them train America’s workforce in the same way or contribute to local and regional economic development in lock step.

Active Community Partnerships are Part of Most Colleges and Universities

Fourth, it is wrong to assert that colleges and universities are failing to build active community partnerships. In fact, most of America’s colleges and universities are eager and integrated community participants, deeply involved in basic education locally, and active in promoting regional, social, cultural, and economic initiatives.

Where would West Philadelphia be, for example, without the decades-long work of the University of Pennsylvania and Drexel University in their local community? There are hundreds of these examples across America.

That’s not to say that America’s colleges and universities must not evolve to match their programs to develop the workforce and assist in economic development based on the pressing needs their regions face.

In fact, the mission and purpose of any institution must always reflect the society that surrounds it. Yet these institutions must also help set the agenda for where society will head.

Colleges & Universities Must Plan Individually and Act Collectively

It’s not enough to follow the trends sanctioned by the actions of elite institutions. It’s critical to have the courage to lead locally based on what challenges face them at home. To do so, America’s colleges and universities must plan individually and act collectively.

Higher education is not a monolithic industry with a defined and inflexible pecking order but a collection of decentralized colleges and universities – large and small – that reflect the genius, strengths, and pitfalls of 400 years of history.

America’s colleges must find new ways — and new words — to describe their importance and differentiate more sharply their contributions to society. But the pronouncements and policies of a handful of elite colleges and universities is only one place among many from which the majority of higher education’s institutions can find and refine their future.

Sharpening the Case for American Higher Education

At the annual meeting of the National Association of College and University Business Officers (NACUBO) in Minneapolis last week, there was a good deal of attention paid to how higher education should address the steady decline in support for America’s colleges and universities among consumers (that is, students and families) and key external stakeholders.

Indeed, NACUBO took appropriate preventative steps by showcasing a marketing effort designed to make a stronger, broader, and more articulate case for why colleges create value – both practically and philosophically – in American society.

Those of us who care deeply about the future of higher education commend NACUBO for working to get in front of this steady erosion in support.

Sharpening the Case for the Value of Higher Education

It’s clear, however, that we have a great deal of work to do to sharpen the argument and make it more relevant to the audiences with whom we wish to engage.

That may be the most important take-away from NACUBO’s discussions: The value proposition for American higher education must reflect the concerns of those who we are trying to convince. It must also resonate with them.

words on chalk board: concerns about higher education

That’s not to say that we should abandon the older arguments. Historically, the most appealing case made by higher education about its value was that America’s colleges and universities produced an educated citizenry broadly prepared to contribute to global society.

Founded and nurtured by the liberal arts tradition, higher education offered more than narrow technical training. Given the rising nationalism and growing tribalism in American culture, this is a critical argument to make.

In fact, it may be the most important argument to make – a foundation upon which a broader case can be built. But laying the foundation is no longer sufficient, although it is essential that the argument on the broader social good of higher education be strengthened and supported.

It makes no sense either to politicize the criticisms of the argument or to cater exclusively to consumer whims, anecdotes, and polling about why higher education matters.

There will always be a subset of arguments about whether or not higher education has been captured by the left. For those who think in political terms, it’s what matters, and sometimes it appears, it’s the only thing that matters.

Economics, Not Politics, Shape Perceptions of Higher Education

There is some merit to these arguments, but many of us do not believe that the broad middle group of educators is narrowly ideological either by discipline or practice. It’s generally healthy to have these political debates, but it will likely be economics rather than politics that shape American perceptions of higher education in the future.

It’s also wrong to build entirely new justifications based narrowly on consumer whims. But this is where additional work must be done. Colleges are tuition-driven by nature and design. The 94 institutions with endowments of $1 billion or higher control nearly 75% of the $529 billion reported by all institutions.

It is a myth to assume that all colleges are wealthy places, living off draw-downs from expansive endowments. Further, at all but a handful of colleges, the often-touted fundraising juggernauts with impressive campaign totals are typically some combination of aggregated annual fund receipts and deferred gifts that build to a bigger number. There is an open question as to how much immediate benefit comes to a college from comprehensive fundraising campaigns.

The financial and demographic issues facing most colleges and universities are challenging:

  • From 2010-2016, the average comprehensive fee (tuition, fees, room and board) rose 43% for private colleges and 68% for public colleges.
  • Financial aid discounts now exceed on average 50 cents of every tuition dollar received.
  • Significantly, recent surveys show that 46% of graduates from U.S. four-year institutions have enrolled in community college at some point.

In an era of steady or declining demographics, consumers are voting with their feet. In a new survey, one in eight colleges have had merger, closing, or acquisition discussions internally over the past year.

Despite these challenges, the sky is not falling as some doomsday prognosticators predict. For the moment, American higher education has lost the public relations battle with the outcry over high sticker prices and a one-sided read of employment after graduation statistics.

Higher education exists in an increasingly transactional world in which families no longer put “skin in the game” because they view higher education as a right supported by the state and not a privilege in which families must also play a role.

But the foundation of preparing students for a global society in which students must graduate with a pragmatic understanding of how they can contribute is a good beginning defense of the value of a higher education degree.

On to this foundation must be grafted other justifications, however, that build from previous arguments on value. If the rigors of the 21st century demand creativity and imagination, it will be an evolving curriculum within higher education that will provide the entrepreneurial encouragement and training.

It’s already happening in ways large and small throughout American higher education. It’s why our colleges and universities are the basis for imitation and the envy of the world.

Those who advocate for America’s colleges and universities must find words – sometimes different words — that are neither defensive not outlandish to explain their value. It’s a public relations battle that higher education cannot lose.

Follow The Money: The 2017 College Business Officer Survey

In many respects, what a college or university business officer (CBO) thinks about the health of higher education says more about the vitality and sustainability of America’s colleges and universities than the opinions of any other group surveyed. The reasoning is simple: The business officers know where the money comes from and where it goes on a college campus.

In this respect, the new findings released in the “2017 Inside Higher Ed Survey of College and University Business Officers” are sobering.

Stated starkly, most CBO’s recognize that American higher education is in the midst of a financial crisis that is different and arguably more persistent than the higher education challenges caused by the Great Recession.

Let me be clear. It’s not that the sky is falling. And it’s not that America’s colleges cannot find ways to adapt to changing impacts that detrimentally affect their bottom line. Many would say that they have administrative, programmatic, and institution-wide strategic tools that can help weather the coming storm.

But there is a sense that these options are narrowing, that traditional approaches like belt-tightening may not work fully to offset revenue declines, and that the operating models developed in the last century may not translate to adapting to the pressures building on colleges in 2017.

Inside Higher Ed (IHE) surveyed 409 chief business officers from public, private and for-profit institutions. They weighted their results statistically to produce findings that represented the view of their colleagues nationally.

Higher Ed Budget Officers Less Optimistic About Financial Health

IHE’s Doug Lederman and Rick Seltzer suggested that the sunnier opinions shaping findings of earlier survey years had darkened somewhat. They reported:

“The emerging picture is decidedly less optimistic than that of previous years. This year, 71 percent of chief business officers agreed with the statement that media reports saying higher education is in the midst of a financial crisis are accurate.” This represents an increase from 63 percent in 2016 and 56 percent in 2015.

What’s even more amazing is that only 56 percent of those surveyed agreed or strongly agreed that their institutions will be financially stable over the next five years, declining to 48 percent if the timeline extends 10 years.

Tuition, Fees Are Not Strong Sources of Future Revenue

So, how will spending needs be met in future years? Most chief business officers argue that new revenue will not be found either from comprehensive fee increases, including tuition, or from increases in net tuition revenue.

Lederman and Seltzer reported: “Just over 7 in 10 – 71 percent – agreed that their institutions would seek to increase overall enrollment. Nearly a quarter, 23 percent, said they would try to lower the tuition discount rate, a move that would have the effect of increasing net tuition revenue.”

Is Reallocation of Budget Funds “New” Spending?

The alternative strategy is to reallocate money from within the annual operating and capital budgets. Consistent now over three years, almost two-thirds of the respondents indicated that reallocation was the best source of new spending.

Lederman and Seltzer point out, however, that these findings differ dramatically from the past: “The portion of chief business officers agreeing their institutions will try to increase overall enrollment dropped by 16 percentage points from 2016. The portion saying that they will try to lower the tuition discount rate fell 13 percentage points.”

Arguably, reallocating money and redirecting it to other spending priorities is an efficient use of existing revenue, providing an opportunity to create new efficiencies, new investment strategies, needed program review, and potential economies of scale. It also answers questions about whether higher education institutions take their stewardship responsibilities seriously. And it is sensitive to political and consumer demands.

There are some problems, however, with this approach. College operating budgets carry significant fixed costs, especially in areas such as labor, facilities, and technology. They disproportionately employ white-collar workers who command higher salaries. Indeed, the compensation piece of the operating budget may approach up to 80 percent of this budget at some institutions.

After fixed costs, one of the overlooked facts about higher education is that there is very little discretionary money left. Indeed, many colleges squeezed much of the obvious discretion to handle shortfalls in the Great Recession. There isn’t much easy money left on the table.

Reallocation of Compensation Budget Pits Administration Against Faculty, Staff

Reallocation therefore implies some effort to address revenue shifting from fixed costs. The largest source might be compensation, setting administrators and trustees against faculty and staff. It’s worrisome, especially since the options on where to allocate revenue from have narrowed so dramatically.

There may be alternatives, especially if American colleges are willing to reimagine how they handle enrollment, the performance of underutilized assets like real estate, and their willingness to engage in broad partnerships that extend beyond the college gates. Need, rather than long-term planning, will likely motivate the higher education institutions that move first. But they could quickly become a model for others to follow.

It will be interesting to see if the most at-risk schools become the most nimble, leading higher education in a direction that others who have the luxury of time must ultimately follow.

“Secret” Behind a Small, Private College’s Success

Writing in a front-page story in the Boston Globe last week, Deirdre Fernandez reported that Merrimack College “has recalibrated its approach to move away from the traditional liberal arts offering – and the strategy is working.”

Ms. Fernandez noted that Merrimack is among a handful of small private colleges that have avoided drastic financial steps, despite changing demographics and the consumer revolt against high sticker prices. She argues that Merrimack’s success is exceptional, especially in the highly competitive admissions market in the Northeast. In fact, Merrimack’s enrollment has increased by more than 60 percent from 2300 students in 2011 to 3,780 students last year. The college expects its second largest first-year enrollment in September.

students Merrimack College

I should offer a disclaimer that I am a Merrimack graduate and have served both as a trustee and the chair of the Board. But that having been said, what happened at Merrimack is illustrative of the broader changes that must occur across higher education.

Focus on Tech and Health Science Programs

Ms. Fernandez rightly attributes much of the enrollment growth to the College’s determination to aggressively support programs in health science, business, and engineering to reflect the steady growth of these sectors as foundational pillars in the Boston “eds and meds” high and biotech economy.

Fernandez argues that this represents a move away from the humanities toward more practical education that serves the workforce needs of the Boston region.

Sophisticated Financial Aid Model Targets Right Students

Ms. Fernandez also reports that Merrimack has worked extraordinarily hard to develop a sophisticated financial aid model, targeting the right students rather than simply the best scoring ones:

“The effort has become so sophisticated that the College uses an outside consultant and computer algorithms to dole out financial aid, ensuring that students who visit often and want to come to the school get more money, instead of simply offering the biggest scholarships to students with the best grades who are weighing several options.”

The Globe article suggests that the redefinition of the college’s product – in this case, attention to academic program differentiation – enabled Merrimack to emerge from the pack of other good schools working to define their future.

Strategic Allocation of Resources to Boost Enrollment Growth

But the hidden story behind the obvious lessons that Merrimack provides on enrollment growth is that its leadership of trustees, faculty, and administrative staff determined what resources they had to use, where investments made the best sense, and how to tie issues such as enrollment growth to strategy.

It’s much more complicated than what even the most significant financial aid modeling could provide.

The transformation begins with leadership. When Merrimack College sought a new president in 2010, its Board consciously made a determination to seek the right person for that moment in the College’s history, choosing a senior Northeastern University official, Dr. Christopher Hopey, as its new leader. What attracted the search committee to Mr. Hopey was the range and complexity of his experience, a successful track record in growing programs at Northeastern, and a clearly articulated vision of where a tuition-dependent college should head in its service market.

The new president also understood the need to build on Merrimack’s sense of self, appreciated the limits of the cards that were dealt to him, and could execute, assess, and modify the combination of people, programs, and facilities that Merrimack must have to become a sustainable college.

The Board of Trustees also looked hard at itself, determined to keep its noses in but fingers out of the tent. First, the board established what it needed to know and then looked at what it did not know.

The college’s new administration found a rare combination of external in-residence expertise, new hires, and consultants who built from the Augustinian traditions that shaped Merrimack’s traditions, pushing aside the inertia that defines so many college campuses.

Merrimack moved quickly to support its newly differentiated programs. But what’s missing from the Globe article is that while Merrimack ramped up professional programs tied to the regional economy, it remained true to the core tenets of the liberal arts. Students still graduated with an ability to speak, write, apply quantitative methods, use technology, and work in a collaborative setting.

This combination of the liberal arts tradition washing over its professional programs is Merrimack’s equivalent of the “secret sauce” that separates the College from its peers.

Ultimately, the lesson from Merrimack College is similar to that learned from other colleges and universities that took off as they differentiated themselves. Examples include Elon University, SUNY Geneseo, and Cal Poly San Louis Obispo although the circumstances are different on each campus.

The cold fact is that there is no simple strategy to build sustainable growth on a college campus. The solution instead begins with an understanding of who the institution is and how the pieces fit together.

While on the Merrimack campus not too long ago, I ran into the women’s basketball coach – also a former colleague from an institution where we had both worked. Without prompting, she spoke passionately about how she loved working at Merrimack because she felt the momentum that the changes had made possible each day.

That’s the best success metric for any college in the end. The right kind of change builds momentum. You know it when you feel it.

Is the College Library Old School or Cutting Edge?

As colleges lay out their strategies to become more sustainable over the long term, there are uncertainties that can dramatically affect their abilities to do so.

Some are programmatic, based upon unpredictable market conditions. Others rely on personnel decisions that shape an institution’s ability to be both flexible and creative. A few involve the maintenance, development, and disposition of facilities that determine the level of debt repayment or depend on endowment returns or fundraising success.

Technology Can Be the Great Leveler – or Not

Imbedded within these nagging uncertainties is the impact that technology will have on an institution. If college administrators guess correctly, technology can be the great leveler that neutralizes disparities in wealth and disadvantages in location.

Technology is also a major recurring expense that can undermine a college’s commitment to other institutional priorities.

Let’s explore one area that demonstrates the complexity of the technology issue – the evolution of the college library.

For decades, most college students, myself included, went to the library because that’s where we found the books that professors demanded we read or research. Freshmen orientation often included the college librarian’s explanation on how to use the card catalogue. We learned how to find books, cite them, and avoid plagiarism. It was, in general, a neat and tidy exercise.

To facilitate library use, colleges dedicated a portion of their annual budget to book and subscription purchases. There were some regular complaints about the rising cost of subscriptions, offset at a few colleges and universities by dedicated library endowments to make these purchases possible. As we moved closer to the 21st century, technology made inroads as the computerization of card catalogues and the first digital subscriptions to academic journals made their appearance.

One of the Three Centers of Campus Life

By then, three centers of campus life had emerged. The first was the library, which remained the beating heart of academic life, even if the parameters governing libraries shifted.

The second was the athletic complex – derisively referred to by some as the “jockplex” – where NCAA or NIAA sports co-existed with health and wellness programs for the campus community as a whole.

The last area was the campus dining center, a kind of communal living room with food.

Of these three centers of campus life, none has undergone a more striking transformation than the library.

The transformation began in part with what seemed to be the radical decision to open a café within the library, often a Starbucks or other chain at larger campuses.

The café transformed the library from its historic perception as a stuffy depository of seldom read books to a welcoming reception area for coffee-addicted learners.

Library as Nexus of Intellectual and Social Discourse

Administrators further reconfigured libraries to provide collaborative working spaces, quiet zones, and common areas that aimed to restore the centrally-located library as the “go to” place for intellectual discourse and debate.

In some cases, the strategy worked. In others, the library became a social hearth space more suited to be seen in rather than to study and learn. But technology was the impetus behind the redesign of libraries across American higher education.

Students studied differently than had earlier generations of library users. Professors adapted pedagogy to account for technological innovation. Somewhere in the midst of these dramatic changes, a new concept of the learning commons emerged.

The Emergence of the “Learning Commons”

A learning commons is not a bad thing and demonstrates that even time-bound institutions like libraries can evolve in a way that better suits how students learn. It reflects core perceptions of the liberal arts, which include that students must understand how to work collaboratively and use technology effectively.

But the accompanying administrative changes had confusing implications for college budgets.

At most institutions, libraries remained places to frequent because that’s where the books are. But for new generations of learners heavily influenced by technology and long since acclimated to different learning styles, the college library became a place to access technology. This raises an interesting question for college strategists.

Is the library budget about books or technology?

The answer is clearly both. In an important way, technology is a great equalizer because colleges can implement technological changes without incurring the competitive and often prohibitive costs for books and subscriptions borne by earlier generations. The implications are enormous for the future of the library in a college learning environment.

We should welcome the emergence of the learning commons. At the same time, we should also recognize that the learning commons of the 21st century grew from the college libraries of earlier generations.

The learning commons have emerged as the next iteration of facilities that shape academic life, but the concept of the library remains at their historic core. There is room for books and technology.

It may be that basic cost efficiencies will define subsequent development. Consortia purchasing and sharing practices may end costly duplicative purchases as library books are warehoused elsewhere and made available on request or disseminated via the Internet. Technology will continue to shape the availability and distribution of journals, newspapers, and related material.

Nevertheless, libraries remain the depositories of our oral and written traditions. They house and protect our collective memory. Whatever the delivery mechanism, cost efficiencies created, and budgetary restrictions imposed, the best-designed learning commons must rechristen libraries as academic hearths that blend books and technology more seamlessly together.

Student Life, Academics Synergy Needed for Residential Colleges’ Future

As enrollment continues to soften at four-year residential colleges, college administrators must increasingly justify the philosophies behind and the costs associated with them.

It’s a sad commentary when colleges must defend what was once perceived to be the best justification for students to attend them.

The older argument fell along these lines:

  • Attendance at a four-year residential college offers students the luxury to explore their interests, grow in maturity, and broaden their horizons.
  • Residential colleges impose expectations on students. They must learn to live together. They must utilize the dozens of student-organized clubs and activities that can shape their extracurricular experiences to become well educated, committed, and productive citizens.

In short, the residential college supports the academic interests to provide a comprehensive education for their students.

Indeed, many residential colleges do just that. They have a clear focus, mission statement, and governing and operational philosophy. They offer a wide variety of programming and link their residential experience to in-class philosophy and practice.

But as the market softens, there are growing problems with how residential colleges will develop against a backdrop of the mounting pressures on them.

The first pressure is internal. While many colleges have a respectable sense of self, for countless others the student life programs that shape the residential college experience are often a mishmash “cookie cutter” hodgepodge drawn from peer and aspirant experiences that are not explicitly linked to their college’s strategic direction or even a precise program fit.

A review of most residential college literature, for example, seldom produces a clear statement of mission or how students translate their first efforts at interdependence to independence.

What is the seamless path that prepares them to move psychologically, socially, and culturally into the workforce after graduation?

Second, colleges must be judged ultimately by the buy-in their programs receive, especially from students, staff, and faculty. At many colleges, student life programs operate quite separately from the academic programs they should support.

Further, student life professionals lack the level of respect that the faculty enjoys. They are decidedly junior players in the campus pecking order. Senior administrators often see them less as developmental agents and more as some combination of truant officer and baby sitter.

These problems extend to student life professionals’ relationship with the students. In this regard, campus culture can play a large role in how residential life develops.

More progressive campuses involve students in residential life, including in critical areas like discipline. Progressive campuses often have honor codes and student disciplinary boards. But these processes require that campus administrators share power with students. This act can translate into a teachable moment for students on the best-run campuses. And it can also foster the trust and transparency that make good residential life programs better.

Third, the cost of residential life plays directly into the impact it has on campus. A good residential life program is expensive. Colleges that do not take a hard look at their programs also run the risk of adding programs to ensure comprehensiveness while seldom rejecting what no longer works. The result is that many colleges run a much larger offering of programs than is needed. Students should be able to start new programs, especially when the costs of the proposed program is prioritized and matched to the available resources. But in the end a residential life program is a rationing tool.

As such, residential life administrators can support any program that they choose but not all of the programs that students want. This is where strategy comes into play.

There must be a clear sense of direction, an ability to execute and assess, and a strong connection to the academic programs to determine whether the teachable moment provided by residence life staff meets the academic standards espoused by the college. There must be synergy between student life and the academic programs in a residential setting.

The best educational strategies balance people, programs, and facilities. A residential life program is also an open invitation to intersect the needs of the college with those of the community. In a fully integrated strategy, the social, cultural, wellness, human rights, and philanthropic initiatives supported by residential life programs are grounded in the neighborhood, town, and region. They share common purpose and direction. They avoid duplicating facilities.

In an era of diminishing resources, a robust residential life program is essential to a college’s identity. But if its purpose is unclear, its detractors will take advantage to open residence life to debilitating cutbacks.

The solution begins with a deeper commitment to the four-year residential college. It starts with a reaffirmation of why the residential learning experience defines them and who and what they teach. Their renewed commitment must establish metrics that shape each of the four years in a student’s life, linking the programs to critical outcomes like retention and graduation rates.

A residential college is an expensive way to educate students. Yet for many students, it is the transformative experience of their lives. Its advocates must shepherd its programs into responsible and cost-effective alignment to demonstrate to families as consumers — without apology and with considerable pride — that “you get what you pay for.”

Rethinking How We Pay for College Athletics

Athletics contribute enormously to college life. They provide a unifying force across the campus community in which the college’s principal stakeholders – faculty, students, staff, alumni, parents, donors, and the community – can rally with pride in support of the institution.

Athletics are often the public face of a college. At the largest institutions, this can sometimes create special risk – think Baylor and Penn State – but for the most part a robust college athletics programs delivers far more than it risks.

Too Often College Sports are Separate and Unequal

Too often athletics can be its own fiefdom. There are times when trustees and donors step across a bright red line in the sand to put athletic interests above the academic program. The faculty are often divided over their benefit, seeing athletics as a competing interest for student time and attention. If college governance works, many of the problems emerging from athletics can demonstrate how a college that typically operates with the complexity of a small city works out the pressures of competing interests amicably.

The role of athletics can take on a very different meaning, depending upon the campus. At the largest NCAA Division I schools, the stakeholders treat sports as the defining factor that shapes their loyalty to the university. They see student athletes as budding national sports figures, at least in their premier sports programs. In many cases, these students stand apart from the rest of the student body and are often treated accordingly.

In Division II and III, student athletes are more like the general student body, but they also play a critical role albeit one with less frenzy and hoopla. One of the best-kept secrets at smaller Division III schools, for example, is that athletic programs can not only improve diversity but also directly affect the gender balance of an incoming class. Maintaining a large football roster, for instance, can offset the skewing toward women who matriculate in greater numbers than men at small liberal arts colleges.

Higher education leadership must make a decision on where administratively to house sports. Their decision is colored by how they see the contribution of athletics to student life.

College Athletics Must Be Aligned With Student Life

However athletics fit into the organizational chart, sports programs must ultimately be seen as the most valuable asset – linking the college’s stakeholders together – in the student life arsenal. But it is critical to break up the athletic fiefdom, even at the risk of trustee and donor angst, to align sports with student life.

The biggest problem is that athletic programs can’t meet their “all in” expenses. Most estimates suggest that only one in eight athletic programs support themselves. This issue will become increasingly important as the pressure to look for internal savings grows as the economic model that shapes a college’s operating budgets moves toward collapse.

How can colleges justify high tuition sticker prices, rising tuition discounts, and decreasing net tuition revenue while continuing to bankroll a wide variety of costly sports programs?

Dispelling the Myth that Athletics Can Bankroll a College

One answer may be to rethink how colleges finance athletics. The sports program costs a lot, especially if scholarships are provided and the college makes heavy investments in people, programs, and facilities to recruit and compete. The costs also increase with NCAA reporting and compliance requirements. Finally, the college, especially at the Division I level, must run almost two programs simultaneously – a competitive program for Division I athletes and a general recreational, health and wellness program for the general student body. The costs in duplicated facilities can be enormous.

Colleges Must Get a Handle on How to Finance Athletics Programs

The bottom line is that we must work to get a handle on how to pay for the costs of college athletics. It is pointless to fight an open battle to reduce the number of college sports, since each finds a committed constituency. But there can be expectations placed on how a college or university runs its sports program and pays its bills.

First, not all sports are equal. It is possible to run a tiered competitive program that allocates resources based upon the importance and level of investment required for each sport while still meeting Title IX guidelines.

Athlete Recruitment Must Be Integrated into Enrollment & Financial Aid Strategies

Second, athletic recruitment must not be a stand-alone operation but fully integrated into enrollment and financial aid strategies. If done correctly, the recruiting and student financial aid packaging can neutralize the overall cost of sports on a campus.

Athletic Facilities Should Be Considered Investments in Community

Third, colleges and universities must see their facilities as community investments. In some cases among sports in lower ranked tiers, it is possible to utilize existing community facilities in their regions. In other cases, these facilities can be designed as public-private partnerships. Whatever the solution, they must not tie up a college’s debt capacity unless this investment makes sense as part of a larger comprehensive solution. Indeed, the development of new athletics facilities is an important opportunity to attract micro-targeted donor interest in a college.

In the end, colleges and universities searching for efficiencies must look at athletics. It must be accomplished with an eye to strengthening a sustainable sports program. But done correctly, it may also be the best way to preserve the role of athletics in student life.

It’s Time to Put Academics First in Enrollment Recruiting

The range and scope of academic programs in higher education has become increasingly complex. New programs emerge almost daily to adjust to consumer demands and workforce needs. Applicants can easily become confused as they attempt to judge quality, complexity, cost, and a return on investment.

The result is often a mishmash of academic offerings developed upon a foundation that no longer seems to be built upon bedrock principles.

  • What is the purpose of a new program offering?
  • Is it a response to workforce demands?
  • Does the program emerge from a particular academic strength for which the college or university is noted?
  • Do the outputs – notably an education path that leads to a productive life – match the potential of the program?

These questions mask a transition that now faces American higher education. Consumer demands and expectations shift depending upon factors that go well beyond the academic program. One of the most notable shifts since the Great Recession has been the consumer attention paid to why students choose majors in employable fields. The best example is the effort to develop public policy to promote education in STEM fields.

By itself, choosing a STEM field is an admirable decision. America needs more scientists, mathematicians, and engineers. The jobs often pay well, and STEM graduates contribute enormously to the common wealth.

But the country also needs social workers, poets, and museum curators. For America to prosper, its policy makers must not pick winners and losers, narrowly choosing economic benefit and workforce development in key fields over breadth and the social good in American society.

America is only great when it is as complex as the problems that it faces and the potential that it promises to those who seek a college degree.

This is where American colleges and universities receive a failing grade. It is ludicrous and shortsighted to expect that colleges should adopt a mindset that effectively says, “build it and they will come.” (Apologies to “Field of Dreams.”) To do so would presume that American families understand what colleges do, how they educate, and why they exist.

For many families, a college education is simply a pathway to a good job. In the last century, this argument was sufficient and filled seats when demographics and government policy worked in favor of college admission practices.

College Admissions Now a Marriage of Academics and Business

These days are gone. College admissions has become a marriage of academics and business, introduced by the admissions office through marketing and communications strategies and tactics. Critics will complain that education is a business. They believe that this business mindset is the root cause of many of higher education’s problems.

But others will point out that those families who pay steep tuition prices – tuition discounts disguised as scholarships notwithstanding – have every right to understand more about what they are buying.

College Marketing Fails to Differentiate Academic Programs from Competitors

What is most lacking on this issue is clarity – or expressed differently – a coherent and compelling academic marketing strategy. The problem begins with how colleges market their academic programs. While there are innumerable exceptions that display creativity and focus to lay out quality indicators and outcomes expectations imaginatively, most are described by worthless four-color brochures that fail to differentiate how their program differs from those of peer and aspirant institutions.

Academic Programs Without Direct Career Outcomes Often Given Short Shrift

It’s a shame because there are many outstanding academic programs that receive scant attention after the deals struck among the promotional efforts of marketing, communications, admissions, financial aid, and academic leadership. It’s easy to promote management, nursing, or engineering because these academic disciplines are linked to employment outcomes that are easily understood by consumers.

If a college or university offers a comprehensive field of academic programs, however, it is equally critical to think imaginatively about how students in fields like English, history, and sociology will be shaped by the unique quality of the academic program that they will consider.

Faculty are Keepers of the Higher Education Flame

The answer to “why us” in a particular field begins by emphasizing the quality and creativity of the faculty. The faculty are the keepers of the flame, outlasting students, administrators, and trustees in tenure. This means that faculty must be chosen well and resourced sufficiently.

But the defense of any academic program to a broader constituency must go well beyond dollars to explain what contributions an academic program makes to learning, how it fits into a broader curriculum, and why its presence is important among the academic disciplines offered.

We can predict that as the business of higher education and academics continue to be intertwined, there will be growing calls to defend the size of upper division classes, the amount of money appropriated, and the number of majors graduated in a particular discipline.

Before we get there as a society, however, it is critical to build a case for the academic programs that a college supports by explaining what’s unique and special about them. It may turn out that differentiation communicated through better marketing aligns best with a college’s mission and consumer interest.

Will Mergers and Acquisitions Dominate the Future of Higher Education?

A hotly debated topic making the rounds in higher education now is whether American colleges and universities – public and private – face a round of mergers and acquisitions over the next several years.

There are a number of reasons that the discussion of this topic had gained momentum.

Tuition discount rates are creating revenue squeeze for colleges

First, many colleges, especially small private colleges, are seeing their tuition discounts — now at 50% on average for every tuition dollar received — rise while their net tuition revenue remains flat or continues to fall. In fact, there are some colleges where the tuition discount now approaches 70 percent.

Financial health of many schools is questionable

Second, federal composite credit scores, which reflect the overall relative financial health of institutions along a scale from -1 to 3, have shown a good number of institutions to be in questionable financial health. A score greater than or equal to 1.5 indicates the institution is considered financially responsible. Colleges with scores of less than 1.5 but greater than or equal to 1.0 are considered financially responsible, but require additional oversight. These schools are subject to cash monitoring and other participation requirements.

The Chronicle of Higher Education reports that 177 degree-granting private colleges failed the U.S. Education Department’s financial-responsibility test, which seeks to quantify the financial health of proprietary and nonprofit institutions, for the 2014-15 academic year. That’s 18 more than failed the year before.

Further, of the 177 failing institutions, 112 (63%) are nonprofit and the rest are for-profit. For the previous year, 58 percent of the 159 failing institutions were nonprofit.

Third, Moody’s has revised its outlook for U.S. four-year higher education to stable from negative, reflecting the expectation that the sector’s business environment will neither erode significantly nor improve materially in the next 12-18 months. Until this latest ratings change, higher education had received a negative rating since January 2013.

Moody’s rating suggests that higher education is at best treading water and not in a robust recovery from the impact of the Great Recession.

Fourth, there is growing anecdotal evidence of a struggle over financial health. Nearly four of ten private colleges reported that they still had available seats in their upcoming admissions class last year. On the public side, some states are considering closing or merging small and underperforming (often rural) campuses. The number of students entering community colleges is also dropping. Years of underfunding public sector institutions have produced problems like the collapsing infrastructure and structural deficit issues at respected institutions like UMass Boston.

In addition, much of the public discourse over projected closures like Sweet Briar College, failed merger attempts, and persistent rumors of financial distress continue to feed the higher education gossip circuit.

The cumulative effect is to pit trustees, staff, faculty, students, and alumni against one another as the blame game over failed efforts at transparency and worse indications of poor stewardship shake higher education’s foundations.

Free tuition at public schools could be detrimental to private institutions

The newest wrinkle addresses the likely impact that variations in the free public tuition proposals might have in the 35 states where such proposals have arisen. In New York, for example, a number of private college and university presidents with whom I have spoken recently wondered what will happen when the state uses the program to encourage New York State families to vote with their feet for four-year public colleges. The impact on the state’s private and community colleges could be detrimental, lasting and severe.

There’s little question that American higher education is now going through a period of chaos and uncertainty that is upsetting the otherwise glacial pace by which higher education has historically evolved.

But history also tells us that there have been at least two other periods characterized by the same level of disruption. In each case, higher education grew and adapted but did not suffer from an agonizing collapse. It is possible to imagine the possibility and to see the potential amidst the chaos, even if some of it is self-inflicted.

Disruption in higher education may spark creative, positive change

And perhaps this is ultimately the point. Higher education will need to change the way that it operates. Leadership at all levels must modernize and re-think financial models, operating principles, and governing structures. It is likely that American colleges and universities will not be able to rely on traditional state and federal partnerships in the way that they have in the past.

It is essential that institutions begin to imagine broad cooperative efforts that cut across rigid but now outmoded divisions as “public” and “private,” research and teaching, and two-, four-, and graduate-level institutions. Education must be a seamless, lifelong pathway.

The most important change will be to build an aggressive, unapologetic defense of what higher education represents, why what it does is important, and how its colleges and universities contribute in unique ways to American society.

Disruption makes anything possible. Now is the best time to think about how to manage this disruption rather than simply react to what’s coming.