It's no big secret that higher education is in crisis.
According to a study sponsored by Time Magazine and the Carnegie Corporation of New York, 96% of senior university administrators said higher education is in crisis and almost 4 in 10 said the crisis is "severe." So severe, in fact, that some experts are predicting the brick-and-mortar university model will soon go extinct.
But what are the underlying causes? And, perhaps more importantly, what can universities do?
Today, Education Dive explores why university model is ripe for disruption—and even extinction. Next week, however, we will hone in on what universities can do to survive. Take a look for yourself and see why this could be the end of higher education as we know it:
1. THE COST OF THE COLLEGE DEGREE
Bad news for universities. Tuition has ballooned far beyond $200,000 at some schools, and, as the gap between cost and value widens, college becomes an increasingly unaffordable investment for many families and students. To make matters worse, interest rates on subsidized Stafford loans just doubled to 6.8%Schools need to demonstrate what return students will get on their significant investment—and that's not getting any easier.
The math is not in universities' favor. It's really only a matter of time before students seek more cost-friendly alternatives in an increasingly competitive market.
2. THE SKILLS GAP
Clayton Christensen, Harvard Business School professor and the father of the theory of disruptive innovation, recently said, “We invest and we subsidize [students'] education in fields for which there are no jobs.”
And he's right. The job market does not care about a Master's degree in Philosophy. Employers are looking for the best person for the job, whether they graduated from an Ivy League school or dropped out of high school. It's true that college degrees still hold value, but less in terms of job-specific skills and more in terms of demonstrating commitment. The skills valued in an academic environment are not always those most valued in the workplace. If universities are not teaching skills that today's workers need, then why should students pay the exorbitant tuition?
As detailed in Academically Adrift: Limited Learning on College Campuses, a book by Richard Arum, professor of sociology and education at New York University, and Josipa Roksa, assistant professor of sociology at the University of Virginia, statistics from the Collegiate Learning Assessment, which is supposed to measure gains in "higher level" skills taught at college, tell a far more depressing story. Take a look:
- 45% of students "did not demonstrate any significant improvement in learning" during the first two years of college
- 36% of students "did not demonstrate any significant improvement in learning" over four years of college
If students aren't even picking up critical thinking and other relevant skills, then where does the value of a college degree lie? The college experience alone is not worth $60,000. If they are to remain relevant, universities need to meet the economy's needs to ensure they are a good investment. Otherwise, cheaper, alternative models will pull the rug out from under them.
3. BROKEN BUSINESS MODELS
In 1997, Peter Drucker, the famous management consultant and educator, said, "Thirty years from now, the big university campuses will be relics. ... Such totally uncontrollable expenditures, without any visible improvement in either the content or the quality of education, means that the system is rapidly becoming untenable."
Universities have kept growing since then—but it's all too deceiving. The relative quality of a college education remains unchanged, despite skyrocketing tuition rates. Schools are fighting off declining enrollment and increased competition with tuition hikes, and that is all too short-sighted.
The Troubled Future of Colleges and Universities, a paper by Gary King of Harvard University and Maya Sen of the University of Rochester, outlines the problem with this model: "For most of the twentieth century, increasing tuition was a reliable, economically sound way for universities to raise revenue because family incomes were rising. When family incomes stopped rising, as they have for the last two decades, federal and state governments intervened by providing basic grants and assistance. Today, tuition is outstripping that assistance, and state and federal budgets are more strained and their legislatures less generous."
This is quickly creating a brick-and-mortar bubble. Universities can continue to raise tuition at the current rate but, sooner rather than later, more and more students will realize it's not worth it. Cheaper alternatives will fill the gap and institutions unable to adapt their cost-structure will not keep up.
4. THE BIG ONLINE BOOM
The internet is finally catching up to higher education. Online learning—and particularly massive open online courses (MOOCs)—are the hottest technologies in education right now. The model is still immature and may never become the silver bullet some hope it could be but, as MOOCs gain accreditation, they will—and already have—become a legitimate source of competition for universities.
The internet has not only brought free knowledge to the masses but is quickly learning to legitimize—and even monetize—it. The economies of scale are in online learning's favor: they provide the same content to far more students at a far lower cost. And, as the technology evolves, it even has the potential to replicate learning communities online.
While the college campus may be dear to our heart, viable—and notably cheaper—alternatives are rendering it increasingly obsolete. The university's monopoly of the higher education market is rapidly coming to an end.
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