Time’s Up

CCIS.Blue twoThis is actually urgent and important.

Digital transformation and the rising tide of alternatives to traditional higher education are not the only threats.  The following are just a few of the most recent indicators of the urgent need to respond.

An investment advisory like Moody’s reports that a rising number of institutions will not be able to meet their enrollment revenue targets.  An international consultancy like Ernst & Young hypothesizes that most of Australia’s colleges will not be viable in 10 years. Another study shows that more than a third of US colleges are in declining fiscal health.

It is a better than even bet that some will not survive the decade intact.  That is unless they take action to address the inherent weaknesses of their business models, and soon.

This circumstance is the result of many factors.  Some of them have to do with costs:

  • The cost of competing for profitable students
  • The cost of mission creep
  • The cost of underutilized capacity
  • The costs of unfunded non-teaching programs

Some have to do with revenues:

  • Declining state funding
  • Declining federal funding
  • Unsustainable tuition increases
  • Declining share of higher education revenues

The long-term prospects will be influenced by the quality of traditional methods.  These are already being seen.

  • Increasing question of the costs and benefits of traditional higher education
  • Digital teaching methods producing equivalent or superior outcomes
  • Rapidly increasing quality of digital education
  • Increasing political call for simplistic “solutions”

Any of these conditions would be serious.   Together these factors will be more than many institutions will be able to bear, and will require adaptations that are beyond the cultural and financial reach of most.

Many of these trends have been building for 10 to 15 years.  However, the seriousness of impact on higher education has been masked by several tactics.

  • Increasing dependence on out-of-state students paying full tuition
  • Increasing dependence on international students paying full tuition
  • Increasing reliance on low cost/part-time instructors
  • Outsourcing staff services to save on the cost of benefits

These tactics have worked well, so well that they have disguised the underlying weaknesses of the typical higher education institution.  A point of diminishing returns has been reached.

  • With every institution competing for the same wealthy, out-of-state and international students, the return on recruitment investments is declining.
  • With international students making up more than 10% of some freshman classes there is doubt that the ratio can go much higher.
  • Nationally more than 60% of higher education faculty members are part-time or without tenure.  As recently as 1990 more than 60% of faculty members were tenured or full-time.  How much lower can tenured ranks go?
  • The easy outsourcing of bookstores, foodservice, and custodial services has already been done.

If there is a lack of urgency in some quarters to address these matters, it may be explained by the shared knowledge that the college form has survived for hundreds of years.  The thing is, the growing digital transformation has not caused or much influenced any of these business issues.  Those impacts are yet to come.

For all these reasons, it is reasonable to believe that a tipping point has been reached.  The low hanging fruit has been harvested.  The value of short-term business tactics has been exhausted.  Higher education faces what Terry Brown of the University of Wisconsin System has called “an existential choice:  adapt or die.”

Time to choose.  It is that important and that urgent.

CC BY-NC-ND 4.0 This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

6 thoughts on “Time’s Up

  1. This is a wake up call!
    It would be interesting to look again at some examples of colleges that have adapted or are in the process of adapting.

  2. Michael,

    The issues presented here are much larger than the typical “Campus Matters” discussion. The more important point is what can A/Es and facility operators do to help resolve the problem. For instance:

    1. What are facility leaders and A/Es doing to encourage less building (creation of capital debt) and increase the use of existing facilities? The most sustainable facility is one that is not constructed.
    2. When will we (the facility owners/operators) stop the “arms race” in facilities and stop constructed newer, fancier, etc’er, auxiliary facilities (recreation centers, housing, student unions, dining facilities)? Granted, we seem to see that our customers (the students) want them but are mom and dad willing to pay for separate (health clubs, apartments, social clubs, and dining clubs – respectively) for each child? I think not.


    • Ted, Thanks for the observation. Those of us on the “facilities side” usually are in the role of implementing facilities plans that have had years of administrative gestation. If there is going to be a response in facilities, now is the time to start “bending” the curve. Increasing utilization of existing investments must surely be the first step.

  3. It appears that Dr. Brown’s words are being misconstrued at the end of this piece. A more careful reading of Brown’s brief essay (“In Defense of Incrementalism,” from Inside Higher Ed, Dec 18, 2012) will show that he is making the case that the ready-fire-aim adaptation practiced or promoted by some in higher education is actually a form of dying. Brown is suggesting a more deliberate approach to changes in higher education.

    • Jason,
      Thanks for raising this issue. I am in full agreement with Dr. Brown’s call for careful and deliberate adaptation, and that losing core values in the process of adapting is not surviving. I do not believe I have misconstrued her argument. However, I do believe that time is running out.

      There is no time to be lost in defining what those core values are and beginning the deliberate and incremental adaptation. Without these timely actions, external competition and short-term political “solutions” will determine an institution’s future. If an institution is to be successful in adaptation, it needs to choose a path: first, by defining its core values and second in planning how those are to be protected and in the long term enhanced. The time for choosing whether or not to adapt, is up.

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