Charting Higher Ed from Higher Up

The rules for higher education are changing. Expectations are higher. Resources are scarcer. Higher education has never been more important to individual financial success; education has never been more roundly and consistently criticized. In this environment, it is hard to figure out what, exactly is going on and where things are headed.

Working within higher education does not necessarily give an advantage, either. We tend to know our own colleges, or our own region, or maybe, a small group of similar institutions. That is important, but it does not help with the bigger picture. It is vital to have a sense of the larger landscape.

In Breakpoint: The Changing Marketplace for Higher Education, Jon McGee takes us higher to see that bigger picture. He writes with the knowledge of an experienced academic administrator, serving as vice president for planning and public affairs at the College of Saint Benedict and Saint John’s University. He also writes as the father of a child heading off to college, concerned about how to pay for it all and whether the cost will be worth the cost. McGee provides a clear, rational overview, tempered with uncomfortable truths about the direction of higher education. Disruptions appear on several fronts.

Success requires higher education leadership has to see things as they are, not as one we want them to be.

McGee identifies five key issues that frame the big changes taking place:

  • Accessibility: who has access to what kind of college experience?
  • Affordability: how do students and their families pay for college?
  • Accountability: what is expected of a college education and colleges?
  • Sustainability: how do colleges generate enough revenue to keep changing and improving in this environment?
  • Differentiation: how do colleges distinguish themselves from each other?

He is very much aware that colleges are special kinds of businesses, and businesses live within markets. A president of mine was remarked “no margin, no mission” – and that was true then and true today. McGee sketches out a brief history of the higher education market. He believes that the consequences of the 2008 financial crisis were profound and a warning against complacency. Use shocks to the system, he advises, to speed adaption to the environment.

Many forget the obvious: colleges are greatly impacted by demographic trends. US high school graduation peaked in 2010-11. The numbers drop and then slowly increase to reach that peak in 2023-24. These numbers are not going to change. McGee is very good in emphasizing this “truth” and warning that upticks in college applications are not equivalent to an increase demand for higher education. He further points out that population changes are local, not national, and that colleges have to pay attention to these facts. Growth is in the south and the west.

Higher education is also becoming increasingly Hispanic. The number of people identifying themselves as Hispanic increased 43% from 2000 to 2010. America’s Hispanic population is young, growing, and increasingly interested in attending college. However, college attendance among Hispanic youth lags behind the percentage of white and Asian students. McGee points out that this is a disruption and an opportunity for higher education and forward-focused colleges.

When it comes to paying for college, McGee identifies three groups of college-bound students. The largest consists of those that need financial aid. Without help and deep discounts, these students will not attend. Those who want and/or need some aid, the “ambiguously needy/wealthy”, make up the second largest group. These are students who can afford less expensive options but not all colleges. The final, smallest group, consists of those who are indifferent to cost – the wealthy.

Most families, McGee notes, are not prepared to pay for college – particularly with rising tuition costs. He observes that most families are equally ill-prepared for retirement. Income, not savings, therefore pays for college, along with debt. Most colleges can do little or nothing to change these broad facts. Colleges can, however, tailor their aid and business practices in recognition of them. The number of full-pay students is limited and not going to become much larger. Students are price sensitive and making decisions on costs and expected outcomes. This will be increasingly important to colleges and their students.

McGee locates this “value proposition” within the context of cultural clashes regarding the value of a college education. Some consider it a commodity. Others view it as a common good. McGee does not dive deep into this fascinating mess. He instead recognizes it as an ongoing debate and keeps focused on things more immediate and practical: recommendations for colleges going forward. He presents three observations that will shape the future:

  • Demand for higher education will remain high, but enrollment will be less stable or predictable
  • Students and their families will be increasingly price sensitive (more financial aid is critical)
  • Expectations for college outcomes and accountability will increase

Using Steve Jobs and Apple as models, McGee recommends three kinds of adaption: market, management, and learning. Market adaption means finding new markets of students or for students. Management adaption is about greater efficiencies and ways of doing business. Learning adaption encompasses the broadest and most interesting kinds of changes, from new teaching models to curricula. Successful college strategies should identify the interrelationship among these three kinds of adaption, incorporate the broader external trends, and seek ways to differentiate an institution from its peers. It is not easy work. It does, though, make great sense. McGee is a champion of intentionality. That warms my planning heart.

In a relatively slim volume, Jon McGee has written an accessible primer on college strategy in a period of great change. It is useful and relevant.

David Potash

One Comment

Leave a Reply

Your email address will not be published. Required fields are marked *