Higher Education Policy and Practice

How the Classic Model of Higher Education Can Survive?

The classic model of higher education rests on a liberal arts foundation with full-time faculty providing most, if not all, instruction. There are many who are now claiming that this model is no longer viable because a) students want career education that prepares them for a job, and b) the model is too costly and can no longer be sustained. According to the second claim, small, private, liberal arts colleges are the most vulnerable, especially if they are tuition dependent. The main issue this blog addresses is how to make the classic model financially viable, even when the college is small and tuition dependent.

Financial viability is a major issue for many tuition-dependent colleges with enrollments less than 1,000 students. Evidence indicates that these colleges tend to float into and out of deficits at least five years of every nine. Colleges under these conditions are financially vulnerable when the economy weakens because endowment values decline, gifts drop-off, and in particular, if they have to substantially increase tuition discounts to capture new students, net tuition revenue declines. Questions of financial viability may spread to institutions with larger enrollments if financial markets are flat or declining over several years and if unemployment cuts into student resources to pay for college.

So what can a private college do to maintain a classic model when it is under financial stress or when it believes there is a high probability that its finances could begin to deteriorate in the near future? There are several proven options. This blog briefly mentions the general form of these options; if you wish more information, please contact Stevens Strategy through Michael Townsley.

Strategic Goals and Options to Strengthen the Financial Viability of the Classic Model of Higher Education:


    1. Direct resources to strongest programs.
    2. Reduce the cost of administration.
    3. Strengthen position in the market.

    1. Evaluate program and performance and direct resources to strongest programs.
    2. Improve cost efficiencies for delivery of support and administrative services.
    3. Outsource auxiliary and information services.
    4. Form or join consortia to take over high cost administrative and student services.
    5. Form partnerships with other schools to create a ladder to graduate degrees.
    6. Use continuing education to offer career based degrees while retaining the classic structure as the core of the college.
    7. Distribute courses to new markets through on-line programs.
    8. Develop career fit for liberal arts programs.
    9. Find new markets for students.

Originally posted July 22, 2010

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