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As we enter 2023, our higher education consulting team is sharing thoughts on the year ahead across the sector. Institutions and the organizations that serve them continue to navigate dynamics including:
These create urgency around institutional business model innovation, increased demand for partnerships and affiliation to address scale challenges and access expertise, and continued adoption of digital pedagogy and tools.
One of the themes you’ll see across our teams’ projections is that we think that collaborative approaches that bring together stakeholders to address these complex challenges will win.
With declining high school enrollment, changing demographics, the potential for significant changes to affirmative action in college admissions across the nation, and growing acceptance of alternative credentials and educational paths to the workforce, direct admissions will grow dramatically in 2023. This growth will help schools (especially non-selective ones) with the incredibly challenging enrollment environment.
Direct admissions is the process by which schools eliminate most of the steps that students must complete associated with the admissions process and instead, offer a direct path to admission. Big players in the enrollment management market are getting into this space. For example, EAB via its acquisition of Concourse, and the Common App via their launch of a pilot program. NACAC and NASFAA’s report, “Toward a More Equitable Future for Postsecondary Success” observes that the more complex the application process is, the less equitable it becomes. However, for this significant shift to serve the sector in achieving its diversity and equitable access goals, it is essential for high school counselors of all stripes to gain and build awareness of this less fraught path to college admission. Without the outreach and awareness, it is likely that direct admissions will continue to serve the students who already know how to best game the system.
Across the states, there has been bipartisan funneling of investments toward initiatives that spur regional economic competitiveness and economic mobility. At the table are institutions, employers, workforce boards, government, philanthropy, and a diaspora of edtech organizations. The urgency for non-elite institutions to innovate and integrate with employment outcomes is prompted by enrollment challenges, urgent calls for more equitable outcomes and an erosion of the product-market fit of a traditional, linear approach to post-secondary education to work. Students of all ages (and their parents) are seeking a clearer sense of the outcome for education investments. Current models at most institutions do not deliver economic mobility, especially for historically underserved populations. As a result, for many institutions, business-as-usual is not an option, and there is a renewed focus on models that integrate education and work.
Providing tailwinds are the presence of government and philanthropic funds. For example, Colorado, through its Opportunity Now effort launched at the end of 2022, brought in $85 million to give grants to pilots across institutions and employers that show the potential to “catalyze transformative change.” Philanthropy is also playing a role with organizations, like Strada announcing a $4 million grant initiative to bring together community colleges and employers. In addition, there is the presence of a robust ecosystem of edtech organizations that fill capacity gaps at institutions, whether it be to scale employer networks (Riipen, Handshake), create shortform credentials (unmudl, Trilogy), build networks (CareerSpring, Inqli), or invest in targeted re-enrollment strategies (Reup, Guild). Lastly, the Department of Education’s plans to list low-performing programs based on financial return on investment could heighten the focus even more. This combination of factors points to the potential for real movement in 2023, but how much can incentives and policy spur creative change and innovation in large institutional settings? And who will be the successful movers?
Competing pressures continue to mount on higher education institutions. Federal- and state- level budget cuts, declining population trends, increased competitive dynamics, and cost-of-living pressures on salaries all are applying undue pressure on institutional financials. Recent economic turmoil and mounting technical debt only exacerbate a growing amount of pressure faced by institutional administration to navigate not only the near-term but also long-term pathways for their institutions. On the positive side, online education has created some near-term leverage and simultaneously has pointed institutions to potential go-forward strategies that may alleviate elements of this mounting pressure.
Within the first two weeks of 2023, I have been approached by three institutional presidents who want to host significant planning sessions around how institutional affiliation might better poise their institution on either the revenue or expense side of the ledger (or in one case, both sides). Collectively, it appears there a tipping point is approaching regarding affiliation. This channels one of our founding father’s famous quips, “we must hang together, or, most assuredly, we shall hang separately.”
The Great Resignation affected all sectors of education following the COVID-19 pandemic. Most of the news and attention has been focused on adjunct and full-time faculty attrition, even though a recent survey found that 73% of Chief Academic Officer respondents said their staff members (not just faculty) were leaving at higher than pre-pandemic rates. As students’ needs continue to evolve, quality student support will be harder for institutions to provide without dedicated focus on recruitment, retention, and career pathing of support providers. Our Driving to Degree research monitors job satisfaction of academic advisors (professional and faculty) and we find that the likelihood of retention is lower for professional advisors given they do not have benefits like some tenured or tenure-tracked faculty advisors.
Advisors are being asked to serve more diverse groups of students (transfer, first-generation, working adults, part-time, race/ethnic make-up) across a multitude of channels, which exploded in response to the pandemic when support went virtual (online, telephone, in-person, email, text, other campus apps). Financial aid counselors are also tasked with processing increased volumes of aid without infrastructure to support scale, with many institutions working to digitize a largely manual process of need verification and scholarship reporting requirements. Many institutions rely on individuals who have designed these manual processes to not retire and train the newest team members. However, as COVID forced many of the most experienced counseling populations to re-evaluate the health risks of working on-campus, early retirement has caused high turnover and loss of valuable institutional memory. Without purposeful redesign of key student support roles (academic advising and financial aid in particular) students will suffer the consequences. Hopefully a good portion of the alongside the increase in Pell Grant awards will be invested in ensuring a pipeline of student support talent and the technology to support it.
Some institutions are facing the economic and demographic headwinds that may lead to mergers and closures, and the fear of abandoning their closely held missions – many in the service of historically underserved students – is a painful prospect. Executives and boards struggle to keep mission-related promises to myriad stakeholders from the past (alums), present (students, staff, and faculty), and future (communities).
Rest assured, in the Boston area, we’ve seen examples of institutional transitions in which missions have been successfully carried forward.
Powered by their substantial real estate and other assets, and under the stewardship of institutions that are better able to deliver long-term student success, these colleges’ missions are still alive. Other local schools, including Mt. Ida, Newbury, and Becker Colleges have closed without a second incarnation. And that’s okay too – the natural evolution of student needs doesn’t negate their decades-long contributions to students and their communities.
Executive teams and boards facing mergers and closures should be proactive and do everything they can within the bounds of accreditors and regulators to control how their assets are directed in the service of their missions and values. We expect that 2023 and beyond will reveal new and innovative models of mission preservation that will powerfully honor founders’ intentions.
Higher education enrollment is famously counter cyclical. When labor markets are tight (as they have been for several years), fewer people enroll in school. This is particularly true for those already in the workforce who feel less pressure to bolster their resumes with additional skills or credentials when unemployment is low. For institutions catering to these populations (including graduate schools, online degree-completion programs, and community colleges), this truism has held the promise that an eventual downturn in the economic cycle will lead to improved enrollment in time.
A less comforting explanation for recent enrollment weakness is that prospective students have lost confidence in the value proposition offered by these institutions. Some combination of high tuition costs, apprehension around student debt, and the rise of alternative forms of skills training may represent more fundamental challenges that have been obscured by a hot job market. If, as many economists predict the labor market cools over the next 12-18 months, the extent of any underlying dissatisfaction may become more evident, forcing institutions to reckon with more fundamental questions. Finding ways to build real employment market value into these programs, cut their costs, or both will become a more obvious imperative if a weaker job market fails to drive working adults back to school.
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