5 top trends to grapple with in 2015

The year 2014 is gone but not forgotten, as some challenges have followed us into 2015. And to prove it really is a new year, challenges that began to form in the past years have gained strength and speed to become viable trends. We discuss five that will surely top your list.   

1.    We’ll transition from “Is college worth it?” to “How do we know we’ve been effective?”

In every recession, the value of a college education comes into question. It is harder in general to get a job, but the media loves to focus on unemployed or underemployed recent graduates, who have “earned” employment, and to pick on educational entities — often in the for-profit sector — that “fail” any graduates. At least in part because of the media obsession with individual cases, and the focus on student debt, only 31.5% of adults say that college is worth the cost.1
Information demonstrating that college is worth the financial sacrifice is ever more available.Information demonstrating that college is worth the financial sacrifice is ever more available, and the case for a college education paying off economically over the long term is supported by the evidence — as opposed to anecdotes — which shows that college graduates earn far more income over their lifetimes than those without college degrees.

On the debt front, families are borrowing less and spending more of income and savings. Out-of-pocket contributions rose in 2014 after three years of decreases, even as college costs rose. Families are coming up with the money outside of their students taking on debt. For low-income families, the reduced borrowing is possible due to a big increase in grants and scholarships.

Student debt is an important issue, but it is engulfed in misleading headlines and unrepresentative examples. A New York Times article adds clarification: “The share of income that young adults are devoting to loan repayment has remained fairly steady over the last two decades.”2 Many figures about student debt loads are alarming, but if you focus on bachelor’s degree candidates and on not-for-profit higher education, the figures become far less dire. Furthermore, a report from the Brookings Institution found that the widely publicized increases in borrowing seen over the past two decades were accompanied, for the most part, by increases in graduates’ earnings, despite stagnant growth in wages in the broader economy.3

Financial returns are relatively easy to measure, but they are not sufficient to prove whether a college education is “worth it.” What matters is whether colleges and universities are doing their job as effectively as possible.  

Are graduates prepared to keep learning their whole lives? Will they be productive citizens who contribute to civic discourse?Policymakers and educational leaders are shifting their attention to measuring outcomes. Are graduates prepared to keep learning their whole lives? Are students learning what the program is designed to teach them, and are they learning in a timely way? Are they driven by curiosity? Do they know what they don’t know? Can they show leadership in their communities? Will they be productive citizens who contribute to civic discourse? Just as important are questions about how best to measure the answers, since any metrics or other forms of answers are all likely to be based as much on qualitative opinion as on the appearance of any objective fact.

The new and intensive focus on learning outcomes is producing significant progress; a Lumina Foundation report documents progress on measuring outcomes and makes recommendations that reflect the nuanced approach higher education needs to take because outcomes aren’t easy to measure.4 Also notable is the adoption by 30 states of various forms of “performance-based funding,” which uses indicators such as course completion, time to degree, transfer rates, number of degrees awarded, and number of low-income and minority graduates.5

Institutions should expect to provide the facts that will serve as answers to questions about worthiness and effectiveness.Institutions should expect to provide the facts that will serve as answers to questions about worthiness and effectiveness. President Obama’s college rating proposal, while receiving much criticism on details, has raised the visibility of the current intense discussion of how best to achieve a college’s stated objectives.

2.    Colleges and universities will intensify their focus on becoming more financially sustainable

Both trustees and business officers are focused, as never before, on finances. Trustees have identified fiscal sustainability as the single most important area that boards feel they need to address. Chief business officers say that higher education is in the midst of a financial crisis.6 Fewer than one in four business officers strongly expresses confidence about the sustainability of his or her institution’s financial model over the next five years.

The vast majority of business officers are focusing more on enrollment management issues than they did five years ago.Because it is central to financial health, the vast majority of business officers (89%) are focusing more on enrollment management issues than they did five years ago. Close to half of private institutions are worried that their enrollments will decline.7 The National Association of College and University Business Officers (NACUBO) foresees increasing tuition discounts at four-year private colleges.8

But the improving economy will help significantly. As fundraising and endowment returns grow, we will see colleges increasingly focus their attention on academic quality, on measurement of results, and on accountability of stakeholders (such as faculty and students) to achieving results.

3.    The Digital Revolution will continue to change the business model

While media and public attention for some time focused on massive open online courses (MOOCs), the Digital Revolution has now entered a “quiet” phase of experimentation and foundation-building, with change occurring slowly and steadily, largely under the media radar. The depth and variety of digital experimentation is growing, and it will have a dramatic impact, although the precise effect is difficult to predict. What is certain is that higher education will change, as so many other industries have already done.

The Digital Revolution has now entered a “quiet” phase of experimentation and foundation-building.Here are some examples of that activity:
Data mining and analytics is becoming a new tool for monitoring student learning and progress. Colleges are increasingly using data analytics to predict whether students and prospective students will be academically successful, according to Time.9 Rutgers and others predict that data analytics will become more pervasive in internal audit work.10

Universities are beginning to offer a rich variety of ways for students to learn, rather than offering a “one-size-fits-all” approach. Information is increasingly accessible, with libraries as we know them becoming obsolete. Faculty are teaching in increasingly student-centered ways and are frequently using technology to do so. Brandman University, as one example of change, is going “all-in” with a competency-based bachelor’s degree that is online, available on a tablet, and not based on the credit hour. Its projected price tag? $10,000.11

A small, but significant (and slowly growing), number of campuses are contracting with third-party providers for various services (recruitment, curriculum development, student services) to help develop or expand their online programs. Also, the number of students taking at least one online course (now 7.1 million) continued to grow at a rate far in excess of overall enrollments. More colleges are creating affiliates or subsidiaries to offer online education such as those already offered by Harvard and MIT.12

How this intense activity translates into future directions is not yet clear, but the digital revolution in higher education is moving
along rapidly.

4.    Governance will be challenged as never before

Declining public confidence, changing models of delivery and financial pressures will place stresses on traditional governance assumptions and lead to new ways for institutions to make decisions. The Association of Governing Boards of Universities and Colleges (AGB) recognized this reality when it set up its National Commission on College and University Board Governance to make fresh recommendations on the role of governing boards. The commission’s Consequential Boards report asks board members to restore public faith in higher education by improving value for students; focusing more on long-term planning; rethinking power-sharing agreements with faculty; and holding themselves accountable for bad board behavior, including self-dealing and conflicts of interest.13

The AGB has reported on boards’ responsibility to assure that institutions are focused on measuring student outcomes.The AGB has reported on boards’ responsibility to assure that institutions are focused on measuring student outcomes, saying that “colleges and universities can no more do without a systematic program of student-outcomes assessment than they could do without a development office. And boards, which have ultimate oversight responsibility, must ensure that such a systematic program is in place.”14 Board members will need to be educated to provide the oversight.

5.    Higher education will have to acknowledge elephants in the room

Deferred maintenance cannot be ignored much longer. A report by The Chronicle of Higher Education describes how maintenance has been neglected during the economic difficulties of the past five years.15 The 2014 annual report on facilities from Sightlines documents the growing backlog of deferred maintenance at colleges and universities.16  

Compliance must be addressed, particularly around sexual assaults. Higher education leaders have struggled to find the right tone and policy, apparently thinking that the stricter the policy the less likely it will come under criticism. University of Virginia President Teresa Sullivan adopted one of the most direct approaches, facing the issue directly without putting any blame on victims: “We have a problem and we are going to get after it.”17

There will be a high cost to ignoring risk of any kind.There will be a high cost to ignoring risk of any kind. A survey by AGB and United Educators found colleges and universities still lack “formal risk assessment processes.” The survey reports that while they are increasingly making oversight of institutional risk a priority, institutions’ confidence that they are following good practices has decreased.18

Discern and meet the challenges behind the trends

Each of these trends represents opportunities to adapt and flourish. In measuring outcomes; boosting sustainability, embracing technology; empowering the board, dealing with lingering effects of the Great Recession, and making campuses safer and managing risks, institutions will enhance their value and their effectiveness.  

Back to The state of higher education in 2015

1 Jaschik, Scott. “Mixed Views of Higher Ed,” Inside Higher Ed, March 10, 2014.
2 Leonhardt, David. “The Reality of Student Debt Is Different From the Clichés,” The Upshot, The New York Times, June 24, 2014.
3 Akers, Beth and Chingos, Matthew M. “Is a Student Loan Crisis on the Horizon?” Brookings Institution, June 24, 2014.
4 Colthart, Bruce. Beyond the Rankings: Measuring Learning in Higher Education, Lumina Foundation, Jan. 5, 2007.
5 The National Conference of State Legislatures. “Performance-Based Funding for Higher Education,” Jan. 13, 2015.
6 Rivard, Ry. Sustainability, Divestment and Debt: A Survey of Business Officers, Inside Higher Ed, July 18, 2014.
7 Marcus, Jon. “Colleges and universities charge more, keep less, new report finds,” The Hechinger Report, Nov. 17, 2014.
8 Edmonds, Kellee. “Private Colleges and Universities Continue to Increase Tuition Discount Rate. Resulting in Limited Net Tuition Revenue Growth,” NACUBO, July 2, 2014.
9 Marcus, Jon. “Here’s the New Way Colleges Are Predicting Student Grades,” Time, Dec. 10, 2014.
10 Rutgers Accounting Web. “The Emerging Role of Audit Analytics; Internal Audit Should Embrace Data Analytics.”
11 Fain, Paul. “Mobile Bachelor’s Degree,” Inside Higher Ed, Nov. 26, 2014.
12 Fain, Paul. “Catholic College, Online Degrees,” Inside Higher Ed, April 28, 2014.
13 AGB. Consequential Boards; Adding Value Where It Matters Most, 2014.
14 Ewell, Peter T. “The Growing Interest in Academic Quality,” Trusteeship Magazine, AGB, Jan.-Feb. 2014.
15 Carlson, Scott. “As Deferred Maintenance Piles Up, Colleges Face Hard Choices,” The Chronicle of Higher Education, Nov. 6, 2013.
16 Sightlines. The State of Facilities in Higher Education: 2014 Benchmarks, Best Practices, & Trends.
17Sullivan, Teresa A. “A Message to Faculty and Staff from University of Virginia President Teresa A. Sullivan,” UVA Today, the University of Virginia, Dec. 15, 2014.
33AGB. A Wake-up Call: Enterprise Risk Management at Colleges and Universities Today, May 2014.