A poll of college and university business officers, organized by Inside Higher Ed in conjunction with Gallup, shows growing pessimism about the entire business model and its sustainability.
Nearly one in five think their institution is at risk of shutting down in the foreseeable future.
It’s easy to understand the gloom. For several years now, higher education has faced a “perfect storm” on the financial front, a combination of rising costs and falling revenues. Just as their students, the unfortunate Millennials, are going heavily into debt to fund high tuition costs, universities are borrowing as well, to shore up aging infrastructure and at the same time build sexy new amenities to attract more students.
Yet the number of students who can afford current tuition levels is flat or declining, triggering a “share of market” battle that often results in heavy tuition discounting…thus further exacerbating the revenue squeeze.
Now throw in MOOCs, distance learning, digital credentialing — never mind the competitive pressure of more job-oriented bricks and mortar community colleges — and the squeeze gets even worse. Why pay huge tuition fees (still huge even if discounted) only to be unemployed or underemployed?
You can read highlights of the findings on the Inside Higher ed website here. For me, the most interesting point was that the majority of those polled are still relying on increasing tuition revenues as their solution to the problem — as opposed to cutting costs. This suggests that their institutions are incapable of understanding what is going on around them — but it’s this kind of blindness that is also making so many programs irrelevant in the first place. Unless and until higher education grasps such strange concepts as results and value for money, future polls will be even more bleak.
This is, of course, exactly what I wrote about and predicted in Beyond Age Rage three years ago. The universities are backing themselves into a corner: they’re more expensive, they deliver uncertain (at best) results, and they face a declining number of customers who can afford those so-so results. The outcome should come as no surprise.