Karen Hitchcock: Will Our Colleges Survive?

Dec 23, 2013

Scott Carlson, a writer for The Chronicle of Higher Education, recently wondered whether “… American higher education is the proverbial frog in a slowly warming pot of water, not realizing that it’s about to be boiled alive.” Mr. Carlson’s key message is that today’s colleges have not prepared themselves to respond to the vast number of changes in their external environment – from the inability or, indeed, the unwillingness, of many financially-strapped families to pay for a college education for their children, to the threat of additional cuts to financial aid if sequestration is renewed.  Enrollment is decreasing in many institutions, as is the net-tuition revenue institutions require to meet their operational expenses. Students’ families are questioning the value of higher education as more and more of our nation’s graduates find that their baccalaureate degrees are not  guaranteeing  them the employment necessary to pay off their student loans and begin a life of professional fulfillment in their fields of choice.

Moody’s Investors Service, just last month, released a report which had dire predictions for the financial stability of the entire higher education sector. Indeed, a financial “perfect storm” exists:  decreased funds  from students – that is, net-tuition revenues;  the potential for continued decreases in federal money for student aid; decreased appropriations of operating monies for public institutions in many states; and, the risk of decreased philanthropy in a struggling economy.  All of these factors contribute to the reality that, in many of our nation’s colleges, expenses are simply exceeding revenues, a situation which, over time, could lead to the demise of a large percentage of our higher- education sector.

Here in the Capital Region, the Moody’s credit ratings received by a number of our local institutions reflect these financial challenges, including, just this past  week, Rensselaer Polytechnic Institute, where expenses “continue to outpace revenues”(Times Union, December 11, 2013), and the institution’s debt outlook was downgraded to negative – not unlike recent actions at The Sage Colleges, Siena and the College of St. Rose.

Jeffrey Selingo, a frequent contributor to the Chronicle, reflected on the fact that Clayton M. Christensen, a Harvard Business School professor, and his co-author, Michael B. Horn, predicted that the “ ‘ bottom 25 percent  of every tier’ of colleges will disappear or merge over the next 10 to 15 years.”  And, Selingo goes on to tell us that Andrew S. Rosen, CEO of Kaplan, Inc., has predicted that “only 600 traditional colleges [will] survive the next few decades.”  Selingo does not, however, view these dire predictions as a “death sentence” for higher education, “at least,” he says, “not yet.” What he and many others have pointed out is that a sea-change will be required for colleges to meet the challenges before them – financial, technologic and pedagogic.

Public or private, institutions of higher education can no longer fall back on incremental change – a program or two cut here, a faculty or administrative position or two not re-filled after retirements, a sport or two eliminated from the roster. What will be needed is a complete re-imagining of how   we teach, what we teach and where we teach. The business model of the academy needs to change in ways which embrace new technologies and opportunities to make the learning process not only more effective, but also less costly. We have to recognize that students learn in different ways – less tied to place and rigid schedules. As pointed out by Mr. Selingo, much more flexibility and individualization will be required – in faculty contract models, in student courses of study, in types of pedagogy and in the way now competing institutions might come together in efficient and robust alliances. Clearly costs must be decreased, even as quality is strengthened – a tall order, but essential to the survival of our higher education sector.

It is, I feel, a challenge we in higher education can meet, as long as we keep the students and their needs at the center of our deliberations. We have to develop new ways to judge our effectiveness and value – having the best residence halls and entertainment facilities will need to become a distant second to such measures as the best postgraduate employment rates and graduate and professional school acceptance rates. What we do should be scrutinized through the lens of student success - success in learning, success in intellectual growth, success in communications capabilities and success in achieving  postgraduate goals.  Such an approach will allow us to achieve true reform, even as we achieve a more sustainable and affordable business model for higher education.   It can be done. We can, and must, recognize the threat of the “slowly warming pot of water” we find ourselves in and institute the changes that will be essential for the survival of our enterprise.