The current shakeout in higher education won’t necessarily leave a gap in terms of accessibility, since workforce demands will ensure some form of credentialing replaces it. But the value of what fills the gap is an open question. …
As the head of public system, advocating for funding to support greater access to higher education was a given. Postindustrial economies depend on a highly educated workforce to fuel growth and innovation.
U.S. Secretary of State Antony Blinken stated in a recent “60 Minutes” interview that “what really makes the wealth of a nation, fundamentally [is] its human resources and the ability of any one country to maximize their potential.” This is not a new concept. Adam Smith recognized the value of human capital in his book The Wealth of Nations. Higher education is critical to maximizing the potential of human capital, and the benefits of an educated citizenry go well beyond the workforce.
Access is key to achieving an educated citizenry and maximizing human capital. It is equally important to ask “access to what?”
Affordability is relative, and access to an education that is narrowly focused on functions that are destined to be replaced by technology or programs with abysmal completion rates will not have the same value as an education that transforms one’s ability to think critically and creatively, or strengthen skills and knowledge that are mobile and portable even in a rapidly changing environment.
While most of the world catches up to American higher education, the U.S. is in the midst of a shakeout of traditional residential colleges and universities. The question is not whether the status quo should be supported and the myriad of institutions that have passed the tipping point of sustainability should be saved or not, but rather what should replace them? A shrinking population of traditional college students is frequently cited as the cause for this shakeout, but I would argue that the real culprit is the inability to realign cost structures and business practices with economic realities.
It may seem counterintuitive, but while the number of traditional-age high school graduates is predicated to decline well into the 2030s, college enrollments do not necessarily need to follow suit. As the need for an educated workforce grows in a declining demographic, the focus should shift to increasing college-going participation rates (among both traditional-age populations and nontraditional populations).
Affordability has long been a barrier to participation, yet the traditional residential model has steadily increased costs (not just prices) at rates that exceed increases in national income levels. A 2018 article in Forbes using data from the National Center for Education Statistics (NCES) noted that between 1989 and 2016, the price of college had increased nearly eight times faster than average wages. There is no way to avoid the math here: At some point, the prices simply outpace the ability of the market to pay, at least at the same levels of participation.
Colleges have bought time by heavily differentiating what the market pays and using higher sticker prices to support steeper “discounts.” In other words, students paying sticker price are helping to support students who don’t have the same ability to pay, thus maintaining both access and the critical mass of enrollment levels needed to support operations. But at some point, the business model breaks down; the higher paying students who subsidize the discounts are either no longer willing or able to pay the higher tuition levels, or those students decide they have better options for the same amount of money. According to the National Association of College and University Business Officers (NACUBO), the average discount rates are now over 50% and rising.
A shrinking market coupled with higher prices would seem to logically lead to lower enrollments. But the increasingly education-dependent needs of the workforce are a counteracting force that is creating a “pull” demand. The NCES tracks enrollment rates for people between ages 18 and 24, and those enrollment rates increased from 35% in 2000 to 41% in 2018. That pull demand has also steadily drawn in nontraditional students (for whom, NCES forecasts steady growth through at least 2026) and spawned the growth of lower-cost options such as microcredentialing, online delivery and competency-based education (CBE).
From a policy perspective, one might conclude from the increasing participation rate already underway that the challenge of access is being addressed by market forces. Unfortunately, that ignores the question of access to what?
Yes, many relatively inexpensive ways to obtain a credential are emerging. When it comes to the interests of the state, however, not all options bring the same benefit to either the individual or the larger community. As we learned from extensive loan forgiveness costs associated with several large for-profit schools where students never finished their degree and defaulted on their loans en masse, the failure of an institution to deliver on its promise can cost both the individual and state. Completion rates matter.
At the same time, completion rates cannot be viewed in isolation. It’s easy for an institution to have high completion rates if it is highly selective at the front end. Completion in and of itself is not enough. Reputation also affects the value of the credential, and there is a danger that the shakeout could result in a greater differentiation between selective institutions and those institutions focused on access. The Morrill Acts of 1862 and 1890, which established “land-grant” institutions—along with the advent of state normal schools and colleges—helped create a large part of the “massification” of education in America. Affordable access to a residential college experience helped provide opportunity and social mobility to millions. The access massification also removed barriers to social mobility and the potential of a caste system.
The current shakeout in higher education won’t necessarily leave a gap in terms of accessibility, since workforce demands will ensure some form of credentialing replaces it. But the value of what fills the gap is an open question. Some of that gap will be addressed by those institutions that survive the shakeout, which might simply result in greater economies. Some of the gap will be addressed by alternative delivery models that reach audiences that would not otherwise have participated in the past, potentially leading to a net gain in human capital. Augmenting traditional education pathways with lower-cost alternatives would be a net positive for all parties. Unfortunately, unless traditional institutions are able to materially lower their cost structures (or there is a significant increase in public investment) a large part of the population that would have benefited from a residential college experience (had costs not outpaced wages) will need to be served by lower-cost options, and the challenge will be replicating the transformative value associated with a traditional residential experience.
Competency-based education offers great potential to lower costs. Just as the GED provides a low-cost means of providing individuals who never completed high school with an equivalent credential, CBE approaches assess and grant credit for knowledge and expertise gained whether self-taught, learned through the classroom or from life experience. Whether a GED-type approach can be just as transformative as the more traditional education approaches it might replace is an important question. Fully online options have also become widely available, and the same question of transformative equivalency might apply. The answer as to whether a CBE or an entirely online educational experience can be transformative is not an absolute.
Not all online and CBE programs are the same, and I would argue that not all residential institutions provide a truly transformative educational experience. However, traditional residential programs don’t rely entirely on classroom content, but rather, on an immersive experience that includes interactions with fellow students, faculty mentors and student life outside the classroom. Nonetheless the richness of an online experience is changing rapidly with the advancement of virtual reality, spatial computing and predictive analytics, and it should not be assumed that a transformative experience cannot be achieved through nontraditional paths to higher education. There is also an argument to be made that adult students, who are an increasing part of the student base, do not need or want the same experience as traditional-aged students, and online or CBE approaches may not only support higher participation rates, but also offer a better fit with the needs of nontraditional students.
The question for policymakers should not be which approach to higher education offers the lowest cost, but rather, what is the return on investment for both the individual and the larger community. Given resource realities, we will have to make choices and those choices should not be restricted by tradition or cost alone. Addressing the higher education needs of our nation going forward will require multiple approaches, all with varied costs and benefits. The challenge is to be strategic in our funding of higher education in a way that both increases participation rates and avoids inadvertently creating greater equity gaps or class distinctions.
Access to “what” matters for social mobility, equity and the overall economic health of the nation.
Todd J. Leach is chancellor emeritus of the University System of New Hampshire and former chair of NEBHE.