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First Newspapers, Now Universities: It's Transformation Time

| June 8, 2010

The Current Discussion: Are university leaders doing enough to re-imagine higher education?

The commencement season that has just drawn to a close has been, once again, a wonderful time to celebrate our enduring rituals of collegiate education.

Now prepare to say goodbye to them.

This isn't to say that traditional four-year colleges are going to disappear overnight. They won't...not any more than major-market newspapers have. But leaders in higher-ed have reason to pay serious attention to the disruptive changes technology has forced upon journalists and other knowledge workers: our industry is next.

To be sure, university presidents can rightly claim that our nation's institutions of higher learning remain a key source of the talent, technologies, and innovations essential not only to American economic growth, but to expanding human welfare on a global scale. They can point out that universities are, in many U.S. cities, among the largest employers and otherwise contribute substantially to local economies. And, as they watch national rates of college enrollments reach all-time highs, they can extol the enduring value represented by a college degree.

Yet all these seemingly positive indicators are masking severe weaknesses in dominant collegiate business models. The costs of a college education have risen more rapidly in the past quarter century than even the much-discussed cost of health care, yet over the same interval the quality of the service provided has—let's be honest here—not improved. Meanwhile, real wage rates have been edging downward since Watergate and now credit markets, on which students and parents have increasingly relied to finance tuitions, have locked up and show no signs of loosening.

All of this creates opportunities for a new set of educational leaders—the "edupunks" whose disruptive innovations are featured in an excellent new book by Anya Kamenetz titled DIY U. Online degree programs such as those offered by the University of Phoenix—which alone now enrolls as many students as the entirety of the Big Ten—represent only the first wave of competitive challenge to colleges. Other relatively recent entrants like Western Governors University and the Savannah College of Art and Design, along with start-ups such as, are beginning to redefine the competitive landscape in higher education by offering students new low-cost, high-flexibility options.

As five inter-related trends take hold, more fundamental changes lie ahead. First (trend 1), students are going to stop showing up. This is already happening, actually, on a course-by-course basis. Even where classes are over-enrolled, lecture halls on campus are often half-empty. The reason is simple: Students—particularly those in the large-lecture courses that are core revenue generators for colleges—have figured out that they don't have to show up to learn. As long as they can get the grade, and ultimately the credential, they're satisfied.

That is, of course, until they wander over to the financial aid office. Because, as we all know (trend 2): There ain't no money in the piggy bank. For all the blather about "saving for college," the reality is that the average American family isn't going to be able to put away a hundred thousand dollars for each child headed to college. This means that when tuition time comes, they'll be borrowing. Only, guess what? That's right (trend 3) the banks aren't going to want to lend, because, as noted above, credit markets have tightened more-or-less permanently. And neither state governments—cue laugh track—nor the federal government is going to be able to cover the difference.

Does this mean that the next generation of students will accept uneducated destitution? No, of course not. What it means is that they're going to be looking for alternatives—a quality education at a price they can afford. And, increasingly (trend 4) they're going to find it.

New entrants in the market for collegiate education will be weakly branded relative to those of powerful incumbents...say those with teams that have played in the Final Four. As a consequence, the successful ones will focus on competencies rather than credentials. They'll have data and evaluation to support their claims of quality.

Because talent is the core competitive differentiator of the 21st century, students seeking educational choices will have global business on their side (trend 5). Corporations are already accustomed to sourcing talent globally—in many cases from other sets of universities that no one here has ever heard of, but which are producing highly competent graduates. And they're ramping up their own programs of corporate education. As the global corporate world refines its systems to assess competencies directly, rather than relying on the often imperfect signal conveyed by the embossed letters on a college degree, the true tipping point for collegiate education will arrive.

What all of this means for leadership in higher education is that while resistance is futile, obsolescence is far from assured. The coming transformation in higher education will be gradual, and it will be incomplete. Many of today's elite institutions will not only survive, they will prosper. Other institutions that clearly define, measure, and communicate the value they bring to individual students—and not just to society as a whole—will prosper. As for those whose strategy is to repackage past glories as a vision for the future on forlorn trips to bankrupt legislatures, the road ahead will bear a greater resemblance to Grand Theft Auto than to The Paper Chase.

Future success in higher-ed will depend on agility, clear vision, and a willingness to deal with the world as it is—rather than as we would have it be. While learning is still in for today's students, school's out

Philip E. Auerswald is Associate Professor at the School of Public Policy, George Mason University, and associate at the Belfer Center for Science and International Affairs at Harvard University's Kennedy School of Government. He co-organized the GMU-APLU Presidents' Symposium on the Future of Collegiate Education at the Association of Public and Land-grant Universities, held this month.

For more information on this publication: Belfer Communications Office
For Academic Citation: Auerswald, Philip.“First Newspapers, Now Universities: It's Transformation Time.” On Leadership at, June 8, 2010.

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