Beyond the Noise: Uber-uncertainty

The current coronavirus pandemic has created a series of specific and difficult challenges for higher education. Through its advisory practices, Tyton Partners is committed to helping institutions navigate the short and long-term ramifications of these challenges. To that end, this months’ newsletter marks the start of a new cadence for us and over the coming months we will be reaching out to you with new research, insights and content that explore not just what is happening in the shifting higher education ecosystem but also how we think institutions, funders and providers can capitalize on new opportunities. Have a look at what’s coming soon and we look forward to your feedback.

Best wishes,

Gates Bryant, Partner

Trace Urdan, Managing Director

Kristen Fox, Director

Strategic Decision Making in a Time of Crisis

Last week, we hosted a webinar with Kara Monroe of Ivy Tech, Michael Goldstein of Cooley and Michelle Marks of George Mason University to discuss the ways in which various institutions are grappling with these challenges. In addition to discussing what actions have been taken, we explored the important question of how decisions are being made in this environment through three important topics.

1) Distance Learning Strategies: From Relief to Development

Both of the public institutions represented on our panel had the benefit, heading into the COVID-19 crisis, of having already been in the midst of an extensive strategic review of their respective online strategies. In both cases, the rapid shift to remote learning has accelerated these changes and put the institutions ahead of the curve with respect to planning for the fall semester and beyond.

Despite this head start, both institutions had particular challenges to overcome in rapidly transitioning to distance learning. GMU had to transition 5,000 ground-based courses to online over the course of a two-week spring break. The university brought in new technology and tools and used in-house instructional designers and already-trained faculty to help engineer the transition. Given its different mission and population, Ivy Tech’s focus in the initial transition to remote learning was centered around issues of equity. In response to the lack of computers and internet access among many students, the institution took computers and laptops out of labs to share with students. It further increased existing wraparound services for students for housing, food, and emergency aid aided by CARES Act funds.

In the vernacular of emergency response, both institutions have transitioned from “disaster relief” to “development” – actions designed to support recovery and development of something more sustainable. For example, Ivy Tech believes the transition has led to a more intentional focus on teaching and learning and the best way to measure learning. The institution’s strategy includes a movement toward competency-based instruction, including the use of simulation tools that allow students to learn anytime, anywhere and then to demonstrate those skills in practice. When reflecting on this transition we note that responding to a crisis can create greater clarity and alignment than what existed under the status quo. We expect to see other institutions gain the courage of their convictions with similarly bold endeavors over the months ahead.

2) Financial Sustainability: Scenario Planning and Uber-uncertainty

The potential enrollment shortfall posed by students either unwilling or unable to pay for the fall semester is only one part of the expected revenue impact resulting from the COVID-19 crisis. Likely drops in investment income and state and local supports, as well as reduced enrollment from international students are also likely to place revenue pressures on most institutions – in some cases to an existential degree. Tyton Partners analysis suggests that even in the best scenario, a mid-sized public institution could experience a revenue decline of 7% next year, and in more dire scenarios, the equivalent shortfall could be as high as 23%. As one panelist described the situation, with most institutional margins in the low single digits, an enrollment decline of 10% can be disastrous, and an enrollment drop of 20% can be fatal.

For its part, George Mason has undertaken a similar type of analysis, modeling various scenarios and developing appropriate contingencies. The university is in the midst of creating a complex set of contingency plans should the path of the virus require changes, even after the university has chosen a primary course of action. GMU described the challenge of balancing a concern for the safety of students, staff, and communities with the negative effects of shuttering on employees, communities and the sort of research that will be critical for the nation in combatting the virus long term. The crisis has created a potent cocktail of uncertainty; the length and timing of the economic fall-out combined with the unpredictable path of the virus.

With much higher price points, independent institutions face an even tougher scenario planning challenge according to our panelists, because they must persuade parents and students that they are receiving equivalent value from the online experience. Several are facing expensive and disruptive lawsuits defending this point.

In general, our panelists encouraged institutions to look for the opportunities that may emerge from the current circumstances. As students reacclimate to a new environment, there are likely to be opportunities to plan and budget differently, not from mere reaction, but from intention. Institutions that are nimble in adapting quickly, have an opportunity to attract learners who are unable or unwilling to return to a traditional setting.

3) Out of the Ashes: Career-aligned Credentials

Economic upheaval invites new consideration of retraining and reskilling, which historically has been one important function of higher education. Assuming that the current surge in unemployment is going to intensify students’ focus on labor market outcomes, we asked our panelists about implications for institutions.

George Mason was already focused on the need to be better aligned to labor market competency needs than many of its more traditional peers, but it views the effects of the pandemic as seismic and fundamental. It sees a labor market forever changed with more teleworking and an ever-greater reliance on technology, as well as an intensified focus on public health and mental health considerations. As an education institution this means both a need to create short courses to satisfy people’s immediate needs as demand for new competencies emerges, as well as a need throughout the institution to educate individuals in ways that will better serve the world in the wake of the current pandemic. Institutions that fail to rise to this challenge, it believes, will not survive.

Notwithstanding potential pressures on the state budget, Ivy Tech is choosing to view the crisis as an opportunity to move beneficial initiatives along at a faster pace. It feels highly energized by its explicit role as an engine of Indiana’s economy and expects to play a major role in retraining dislocated workers. Ivy Tech is exploring ways to diversify its funding streams, including an expansion of its engagement with employers. The institution sees partnership as increasingly important in helping employers understand how their employees’ skillsets may need to change. As an institution, Ivy Tech recognizes the need to evaluate, scrap, adapt, and/or overhaul programs more quickly in order to meet the changing pace of a labor market in turmoil.

Our panelists further agreed that the case for competency-based education is likely going to benefit from the crisis. As the entire higher education community develops a new appreciation for the limitations of seat time as a measure of instructional value, it is likely that Congress will respond with legislation to make competency-based education more practicable for institutions. Other legislative and regulatory trends are likely to move toward creating funding sources for upskilling and reskilling offerings separate and apart from Title IV and a push to support and reward credentials that are stackable.

Coming Soon

Join us for a discussion of advising and student support redesign in a post-pandemic world. Driving Toward a Degree: It Takes a Village to Increase Student Retention. Thursday, May 21st at 2:00 PM ET. Register here.

Review findings from our national faculty survey on COVID-19 Remote Learning and Preparations for Digital Learning in AY 20-21, available June 2020.

Review findings from our national study on the current state of developmental education reform, Hitting their Stride 2020, available July 2020.

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