This blog is different from other blogs that Stevens Strategy has published. We want to spark a discussion about the future of colleges. The main issues of this discussion are:
- Are private, liberal arts colleges going through a paradigm shift?
- If colleges are going through a paradigm shift, what will they look like in ten years?
We will use several scenarios that represent what we think might happen to colleges over the next ten years. We are looking for your critique of our perspective. More importantly, we want your insight into what may happen in the next decade. We believe that you may have a uniquely important perspective because as a leader of your institution you are on the firing line of what is happening.
The impetus for this discussion is the rising clamor that higher education is facing an unsustainable future. For instance, Moody’s and Standard & Poor’s, the leading credit rating agencies for higher education, have expressed their concern that private higher education faces considerable pressure on their financial condition. As they see it, most private institutions are not highly endowed (tuition-dependent) and do not have the sufficient endowment income to buffer the effect of new government regulations. New legislation could increase the risks to tuition-dependent colleges, if a de facto ceiling is placed on tuition rates and if colleges are forced to expend more money to increase graduation rates. (See the following article in the Chronicle of Higher Education: New Warnings on Colleges’ Finances From 2 Big Credit-Rating Agencies, 7/26/12)
Private, Liberal Arts Colleges – Scenarios
- Colleges will look the same as they do now with minor changes to account for new regulations imposed by federal and state governments. (Estimated probability is 10%).
- Most liberal arts colleges will be forced to redesign their programs to respond to parents and student demands that their degree prepares them for employment. (Estimated probability 30%).
- Many liberal arts colleges will shift their resources toward internet delivery for day and continuing education students in order to cut costs generated by new regulations (such as new costs to increase graduation rates) and to respond to limits on tuition rates imposed by governmental regulations. (Estimated probability 15%).
- Vendors will provide very cheap standardized, virtual reality, courses that colleges will buy replacing self-developed courses and full-time faculty. (Estimated probability 20%).
- Vendors will provide very cheap standardized, virtual reality, courses directly to students bypassing colleges. Accreditation agencies will offer services to validate courses. Independent bundlers (maybe colleges) will offer credits or certificates or other documentation to the student. (Estimated probability 15%).
- Multiple colleges will create implied or pseudo mergers in which they build a separate institution owned by the participating colleges that contains several or all of the preceding five scenarios. (Estimated probability 10%).
Now it’s your turn – Send us an email ([email protected]) and tell us what you think may happen. We will publish the results in the next newsletter. We would like to publish your comments with your name. Let us know if you agree to the use of your name or would prefer to be identified anonymously.
Michael Townsley, PhD
Senior Consultant, Stevens Strategy