We have argued here and elsewhere that developing institutional consensus on a value proposition is critical to success. This consensus should drive both the assessment of current programming and the development of program growth. Competition in higher education, especially in New England and the Upper Midwest, is becoming intense; and institutions cannot afford to be just another generic (comprehensive) institution. Trying to be everything to everyone will ultimately put the institution in the position of competing based on price and convenience, and that is not a strategy that will allow the institution to thrive in the long run.
As educators, we often think of the flow of learning as from us outwards—to our students, to practitioners, etc. While this is no doubt often the case, it is not always so. Sometimes there are important lessons for us that emanate from our students and the world of practice. Two articles illustrating this point jumped out at us in last week’s business news.
The challenges facing higher education institutions are monumental. It is clear that academic business models are struggling to keep up with the enrollment declines and cost escalations that have resulted in severe financial pressures. The global pandemic has just made underlying cracks in the models into crevasses.
With the passage of the CARES Act ($40 Billion of aid to colleges and universities) and the apparent reprieve in cuts from state governments (again thanks largely to the CARES Act), the prospects for AY 21 and AY 22 are beginning to look less bleak. Recently, Moody’s raised their higher education outlook from negative to stable, but they noted that revenue is unlikely to recover to post-pandemic levels in the near future. Furthermore, higher education is still recovering from AY20 when about half of all institutions experienced net revenue losses.
The COVID pandemic has created an existential challenge to higher education in the United States. As we have argued in earlier blogs, however, the cracks in the higher education business model were evident long before any of us had heard of the coronavirus. Demographic and financial challenges to the long-term growth and profitability of colleges and universities, especially for small private colleges in the northeast, were well known if not well understood.