The coronavirus is forcing higher education institutions to change in uncomfortable ways. But like any holistic change, this situation also is offering unintended consequences, both positive developments (blessings) and troubling realizations (curses).
With wise and astute leadership, colleges and universities that are able to navigate through this trying time can position themselves to be at a centerpiece of economic renewal in their community and region, as opposed to being out of touch in the ivory tower.
A paradigm shift such as we are undergoing requires thoughtful action from higher education leaders. This article offers some suggestions to help colleges and universities successfully make this transition.
The Situation and What to Expect
We believe there will be a significant fallout within the higher ed sector as a result of the financial impacts the COVID crisis is having on institutions, specifically in the areas of enrollment and fees. And unfortunately, we believe this will result in 20% of all institutions no longer existing, in reality or in name.
If you view this through the lens of the various sectors within higher education (e.g., public, nonprofit private (large and medium), nonprofit private (small), and for profit), there will be some winners and some losers. We are expecting that the largest impacts to the sector will be in the public and small nonprofit privates, and it all goes back to funding.
First, the good news (for some). We don’t expect the large private nonprofits (e.g., the Ivy’s, Stanford, Cal Poly, Purdue, Notre Dame, etc.) to be impacted more than marginally. Even if they do suffer cash flow issues in the short term, their name recognition will allow them to bounce back, even if they are shuttered for in-person classes for a year or even more.
Similarly, large for-profits such as Southern New Hampshire, Phoenix, Strategic Education (Strayer + Capella), and Purdue Global should be fine provided their investors cut them some slack. Their stock price may take a hit, but if they have enough cash on hand and/or lines of credit, they will be fine. This will be especially true if they are predominately (or completely) online. What may hurt them is students’ ability to pay for their education. Will they have jobs, grants or employers that will be paying the tuition bill?
However, there is bad news. We are predicting that the publics, small and medium-size private nonprofits that are primarily tuition-driven, and smaller/small for-profits will bear the brunt of the impact.
For public institutions, state budgets have been and will continue to be severely impacted (and in some cases, very severely). We are already seeing significant cuts to education institutions and budgets. These will get worse before they get better, and will result in layoffs, mergers of campuses within systems, and even campus closures.
In some ways, this is needed. Unfortunately, those states with excellent public institutions will suffer –we already are seeing that. For example, the University of Wisconsin System’s president, Ray Cross, is calling for consolidation of services and downsizing programs at multiple regional institutions within the UW System. Citing anticipated budget shortfalls, he said, “If you look at the duplicated majors, are they necessary? Where do we need to focus the resources and energy of a campus in order to leverage its strengths without unnecessary duplication between campuses? … In fact, the very futures of these universities depend on it.”
We think that the portion of the sector that will be hit the hardest will be small nonprofit privates, i.e., those institutions who:
- have enrollment of less than 750 students,
- have an endowment of less than $25 million (or an endowment that is restricted and cannot be used for operations), or
- cannot get enough financing to give them operating cash (and that may not be an option as you have to pay that back).
Typically, these schools are at the greatest risk.
As the saying goes, do not let a good crisis go to waste. So, what can and should you do?
Suggestions and Areas for Innovation
There are a number of areas that are ripe for innovation and really don’t take a whole lot of capital investment. In fact, some areas of innovation actually will add a little bit of money to the budget. Here are some ideas along those lines.
Changing Faculty Perceptions
The first of the critical changes needed is changing faculty perceptions of education. Some may think that this isn’t innovation (or even possible), but without this fundamental shift, none of the other things will make any difference.
Let’s face it. Public perception of higher education has changed significantly over the past five years, to the point where many (if not a majority) feel that higher ed is not preparing its graduates to assume their role in the workplace (or the world). This is a valid complaint – most entry-level jobs require a significant amount of training by the employer to enable a new employee (graduate) to be successful in the job.
We believe that higher ed must begin to think of themselves as part of the “talent supply chain,” and as part of this, take input from businesses and hiring organizations as to what graduates need to be immediately successful in the workforce. Building curricula based on faculty research areas only make sense if the specific area can help organizations grow and thrive.
One way to do this is to involve those people who hire your graduates in the building of curricula and its assessment. Every five years (or thereabouts), programs undergo review and should include an outside reviewer. Typically, this is done by another academic, but why not involve someone from business in this? They would be able to tell you if the revised curriculum is meeting their hiring needs.
Creating a meaningful advisory board is an important and vital step that can help secure an institution’s future. When done well, these boards–which can range from a president’s council to a dean’s advisory board–create strong ties to local, area and state business leaders and community.
These groups offer a critical communications feedback loop that gathers information about what knowledge and skills are needed for the workforce. This information then can be shared within departments to better align programs and majors to workforce needs. This also can lead to innovation, which is increasingly being talked about. For example, a recent podcast described the need for innovation because of the rapid evolution of the world’s knowledge. In fact, some research suggests that the knowledge that students learn during freshman year is already out-of-date by their senior year.
Even before the pandemic started, it already was critical for higher education to become attuned with the professional world because of this exponentially growing new knowledge. Add in the pandemic-driven recession and these advisory boards become an imperative part of a higher education institution’s survival plan.
Additionally, advisory boards can put your institution in a critical support role during this economic recession. The relationships created through these councils can bring your faculty and students into real-world situations to help organizations solve major problems caused by the current economic turbulence.
Employee Training for Businesses
The current economic situation also lends itself to creating opportunities for higher education to assist businesses with employee training. This can include deepening employees’ current knowledge, updating understanding and skills to reflect the current situation, and retooling to assume a different position. This type of training also helps to satisfy one of higher education’s current “challenges” in that it provides another revenue stream outside tuition, research/grant funding and fundraising/donations.
One of the leaders in this area is Arizona State University. The institution’s InStride program is trying to tap into tuition benefits that companies offer to employees. InStride focuses on creating strategic guidance and training that is company-specific.
Leverage Relationships to Drive Enrollment and Fundraising
Higher education leaders are rightfully concerned about fall enrollment and fundraising due to the pandemic. This is where it’s important not to isolate the institution. Instead, reach out to the various stakeholders—alumni, donors, businesses, community groups, non-profit organizations, K-12 schools, churches–who are interested in your college or university. Regular communications with these groups–especially alumni–can foster and leverage these relationships to identify potential donors and create a student pipeline.
For example, one Christian higher education institution has over 800 affiliations with churches across the country. Through savvy relationship management, these connections are developed in a way that create a pipeline of potential students. Furthermore, the churches work with their congregations to create scholarships tailored to help one or more of their parishioners to attend the institution.
Mergers, Alliances, and Consortium
This also is the perfect time for higher education leaders to think strategically about the institution’s future direction. Depending on circumstances, it might be the right time to explore creating a merger or being acquired. The Change Leader has recently published a number of blogs (Part 1 and Part 2) about mergers and acquisitions.
However, creating a consortium with a group of like-minded institutions might be preferable. This could involve shared services (such as sharing a campus) or a common group focus on a specific topic, such as entrepreneurship. The idea is that through working together instead of separately, the consortium’s members leverage the relationships, knowledge and infrastructure to become stronger–and also more differentiated—through this relationship.
A good example of this is TCS Education System. The company provides backend services for six universities – a community model in which universities collaborate instead of compete, gain resources, share expertise, and optimize expenditures in the process.
New Academic Models
The current environment offers a hothouse to start growing different academic models. For instance, some institutions are also looking at a student-centered model that would allow students to create their own degree programs based on their individual interests and skills. This would require a reorganization of departments and cross-pollination between faculty members in different colleges, leading to the removal of silos that exist within the institution.
This is not a new concept – the University of Alabama New College has done this for many years in the form of an interdisciplinary degree.
Additionally, a new model could be created at the graduate level (or even after degree completion) that asks students to delve into one course per month. This is best suited to online education and a few institutions, such as National University, are currently doing this with good success.
Another model that needs to emerge is the next version of liberal arts. While this type of education offers unique benefits, it also must guarantee that students graduate with strong technical skills so that they are job ready. Otherwise, this type of curriculum can be subject to the budget axe, as experienced at Missouri Western State University. MWSU cut its history, political science, sociology, economics and music programs (as well as about a third of its faculty).
Now that many institutions have moved to totally online instruction, albeit for one term, does it make sense to give that up? We believe that students will want the option of convenience that online classes offer (such as getting to take class when they want to and not have to get up too early to attend them…). Going forward, institutions that offer a blended model of online and face-to-face courses complete with strong faculty and cohort interaction will thrive.
This, of course, can be challenging for Christian universities, especially at the undergraduate level. The experience of living in community helps to shape the development of the young adult (freshman) into an adult who is ready to take his/her place in the workforce and society. Those institutions that can best do this (and publicize it) will excel.
Institutions also should reflect on the lessons that they can learn from this past semester. The best way involves reaching out to current students to learn about their experiences in online education. Surveys and other types of research need to ask what has worked and what hasn’t—and these questions need to be open-ended. This type of feedback offers several benefits. First of all, it allows for process improvement for online education. But of equal importance, these interactions engage students in a way that allows them to feel heard; that builds the important relationship between your institution and each student that may need bolstering in order for them to reenroll in the fall semester.
The coronavirus pandemic and recession are accelerating changes in higher education. While a good number of institutions may not survive, those that do will find ways to become more aligned with stakeholder needs, whether that’s student or businesses. These can include advisory groups, new academic models, workforce education, online education, and consortiums. In addition, through leveraging relationships with various stakeholders that are already in place, institutions can develop pipelines that can bring students and funding into the institution.
This type of innovative thinking can help create the next iteration of higher education that is more about partnerships and real-world needs than Ivy tower thinking. Will your institution be one of these?