A New Value Proposition for Higher Education?

Although many industries have faced disruption because of the pandemic, higher education has taken some particularly harsh blows. Not only have pandemic-related effects challenged some colleges and universities financially, but the move online spawned a larger dialogue about the value of higher education. A recent Ipsos poll identified that 76% of Americans agree that a college degree is a part of the American Dream, yet younger adults are far less likely to agree (63%) with that statement than middle-aged (77%) or older adults (84%). Further, only 60% of those polled felt that having a college degree today is more important than it used to be.

Higher education is at an inflection point. Is this a reckoning for some or just a bump in the road? Will the aftershocks of COVID-19 thin the ranks of colleges and universities, leaving those remaining more viable in an age when the school-age population is decreasing? And how will changes in higher education affect independent schools?

A Storm Brewing Before the Pandemic

A recent article from the Hechinger Report suggested that there were already fissures in the higher education system that the pandemic widened, caused by decisions such as:
  • Adding employees (+5%) and facilities (+70 million square feet of class and office space alone), even as enrollment fell (-12%)
  • Giving out discounts to fill seats that revenues couldn’t keep pace with (50% of revenue goes toward discounts/financial aid)
  • Achieving lackluster returns from their endowments (+6.8%, vs. +11.2% on the S&P 500)
  • Ignoring or mishandling complaints of misconduct that traumatized victims and consumed hundreds of millions of dollars in settlements and fines
In a study conducted prior to the pandemic, Gallup identified that confidence in the U.S. higher education system has been steadily declining for some time. In fact, the decrease in confidence from 2015–2019 was “more than any other U.S. institution that Gallup measures.” Why the drop? Gallup speculates that the rising costs of higher education, which serve as a barrier to many seeking access, are driving the public’s view. With more uncertain years upon us, what is the future of higher education? Is it time for some colleges and universities to consider a new value proposition?

In a two-part essay written for Forbes in July 2020, Paul LeBlanc, president of Southern New Hampshire University, describes the dual purpose of a college education that the pandemic has exposed, noting, “Traditional age students on a campus have two jobs they want done. One job is access to good paying and meaningful work, which is made possible through obtaining a degree. That’s supplied by academic programs. The second job to be done is ‘coming of age.’…Those two jobs to be done are conflated under one price definition called tuition. When the pandemic forced a separation of those two jobs, higher education was faced with an uncomfortable reality: students value the coming-of-age job more than the academic job to be done.” 

He suggests that perhaps now is the time for higher education to consider unbundling these two jobs, with every college and university exploring these questions:
  • In a world of search and instant access to content, how do we rethink learning and assessment and what is most important?
  • Is it time to rethink specialized accreditations that tend to reify traditional notions of teaching and learning and do more to protect the discipline than improve the student experience?
  • What credentials matter in our faculty? By extension, what is the role scholarship and research should play in institutions that are really focused on teaching?
  • Why is four years the default for a bachelor’s degree (much of Europe requires three years), and why do we measure learning by how long students sit instead of demonstrated mastery?

Choosing a Path Forward

In a recent essay in Harvard Business Review, Vijay Govindarajan, Coxe Distinguished Professor at Dartmouth College’s Tuck School of Business, and Anup Srivastava, associate professor at Haskayne School of Business, University of Calgary, suggest that colleges and universities need to choose one of three paths:

An augmented immersive residential model that explores how new digital capabilities can improve a residential experience. Questions to explore:

  • How can the residential experience be opened to more high-achieving students from historically underrepresented minorities and students from low-income families?
  • Is it possible to supplement the gold-plated residential learning degree with a different kind of certificate that is more hybrid and accessible to many more students?
  • What are the different bundles of experiences universities can offer?
A hybrid model that explores which offerings can only be manifested in person, and which can be handled online to lower costs. Questions to explore:
  • Which proprietary assets are differentiators in the hybrid model?
  • What is the optimal tuition fee?
A fully online model that explores a business model at a significantly reduced price, such as under $5,000. Questions to explore:
  • How can institutions orchestrate an ecosystem to offer low cost and high quality?
  • How can institutions assemble a consortium of corporations to make a low-cost model work?
  • Which strengths adjacent to the classroom experience can universities leverage?
While existing colleges and universities are determining their future value proposition, the world of education is changing around them as new entrants appear to fill current gaps. In an article entitled, “The New Higher Education: College Alternatives are Good News for Students and Colleges,” Richard Garrett, Eduventures chief research officer, identifies that these new entrants are seeking to disrupt around pace, price, and intensity, falling into three categories of approaches:

Save & Mix. Save time and money toward a bachelor’s degree and/or mix-up the conventional college experience. Examples: Degrees of Freedom, Verto Education, YearUp, Minerva

Learn & Work. Develop practical skills and explore job placement and career pathways. Examples: apprenticeships, Google certificates, bootcamps

Lifelong & Just-in-Time. Engage in learning bursts to drive job performance and career advancement. Examples: microcredentials

Garrett suggests that this kind of innovation is good for the higher education industry as, over the years, colleges and universities have tried to be all things to all people. These new entrants will force focus and differentiation, and value propositions will have to be carefully honed for a changed landscape.

Challenges and Opportunities for Independent Schools

As higher education evolves to meet changing demands, what new challenges and opportunities will this create for independent schools? A few thoughts come to mind:
  • In the short-run, competition for traditional colleges and universities may increase as some institutions merge or go out of business.
  • New post-secondary pathways will give students who either aren’t ready for college, can’t afford it, or don’t see its value, additional opportunities to consider.
  • Independent secondary schools can consider developing their own pathways, taking into consideration the needs of current students and others in their markets.
Now is the time for all in the education landscape to think beyond traditional boundaries and to redesign value propositions for a forever changed world. As Harvard professor and leadership guru Rosabeth Moss Kanter says, "To stay ahead, you must have your next idea waiting in the wings." ­­­
Author
Donna Orem
Donna Orem

Donna Orem is NAIS President.

Comments

Jon McGee
10/20/2021 4:52:20 PM
Thank you for sharing this important blog post. As someone who worked in a senior administrative role in higher education for more nearly three decades prior to becoming a head of school, the issue of articulation between independent secondary schools and higher education is critically important. While I disagree that the three pathways cited by the two professors represent the universe of choices for higher education (many colleges and universities will make none of those choices and continue to survive and thrive), the changing landscape (a landscape that was changing dramatically long before the pandemic) requires conversation. I wrote about the changing landscape in my book, Breakpoint: The Changing Marketplace for Higher Education (Johns Hopkins University Press, 2015). The changing demographic, economic, social, and cultural landscape is worthy of an extended national conversation. Thank you for sharing your insights!

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