The business of higher education is taking some lumps right now. Like most everything, it has much to do about the economy. While no longer on the brink of disaster, this economy is not experiencing the explosive growth necessary to lift government revenues quickly enough to support expected spending. And it won't for a number of years. As a result, many states in an attempt to find areas to cut, are assembling budgets that contain significant cuts toward state-supported colleges and universities. Obviously, this trend is not new. Just last year, Penn State had to make contingency plans in the all-too-possible scenario that it would not get it's assumed appropriations funding from Harrisburg. PSU eventually avoided the big hit that time but it's budget time again and it's looking grim. Most likely, when this year's budget process is all said and done, Penn State, like so many universities, will be faced with the daunting reality of scale of managing both cost cutting measures as well as revenue increases in the form of the dreaded tuition increase.
Maybe Not Such a Need for a College Education?
This trend and the resulting impact on families looking at ever-increasing cost for higher education has sparked some rational (and irrational) discussion about alternatives to higher education. Just last week James Altucher, a hedgefund manager (they have to be smart, right? after all, they don't even pay income taxes on all that money they make- they have it classified as "capital gains") who last year made primarily a financial case for not going to college in today's world. His basic case was that for the over $100,000 average cost for a four year degree, that money could be better invested or spent. For me, his assumptions in the financial case are a a bit questionable. For example, he assumes that you could put all that money into a savings account at 5% interest. Love to know where he finds that since current average interest rates for savings accounts are barely over 1%.
And just last week, as the prospect of budget cuts = higher tuition hit the news cycles, James reappeared with a list of 8 Alternatives to College as well as 10 More Reasons Not to Send your Kids to College. You can read his list and debate each element and some of his wild assumptions for fun. Who knows, his entire ruse may be to sell a "Alternatives to Education" hedgefund where he will take your college savings and make you rich. Regardless of his assumptions and reasoning, the underlying issues are very real.
Personalizing the Issue
There have been other arguments similar to his in the past but these issues are really starting to resonate with people. People like....me. I have two kids who hit college age in the next 11-13 years. Current projections for me have the cost of each of my two boys' 4-year degree at close to $200,000 each. And since both kids are mine, that quick math comes out to $400,000 of financing I'd have to put together. Any way you look at it, that's a SIGNIFICANT cost and a huge debt to incur. I love my sons but I'd also like to continue eating and perhaps even retire some day.
Guess which one just found out we can't afford college for?
Looking from another side of the cost prism of a college education is that it is increasing at 20 times that of inflation. Combine those cost increases along with stagnant wages in most families today and the problem becomes very obvious. The cost of that 4-year degree is approaching a point where families can no longer just say, 'we'll do whatever it takes' because the means are increasingly no longer there.
Next Up: Attacks on the Value of Such an Expensive Investment
With price tags like that, the next shots to the bow are the VALUE of this higher education. Altucher's article comes only weeks after an article on a study that claims 'college students learn next to nothing'. Check it out:
The report based on the book Academically Adrift: Limited Learning on College Campuses found that after two years of college, 45% of students learned little to nothing. After four years, 36% of students learned almost nothing.
Sure, we can investigate the validity of this research but it's not really the point. The perception and alignment with the forces pushing the college degree further away from average folks is what is happening. There are other "college cost isn't worth it" readings out there and have been for a while. My point is that these events continue to force families to genuinely revisit what students (and their parents) are getting for their investment in higher education.
Creating Real Value
Right now, however, you would never know that higher education faces a problem because applications and enrollments continue to rise. I've never been great at predictions but I suspect that as current budget issues turn into real impacts, this trend may slow in the next few years if nothing changes. More and more, the central question at the dinner table will be "what is it about higher education that will make it worth an entire family to deplete most of its assets and perhaps go deep into debt?"
The Opportunity for Higher Education
I followed some colleague blogs coming out of the ELI conference in Washington DC last week. Much like the mood at EDUCAUSE back in October, I get the feeling there is a sense of urgency among the higher education community. Part of this urgency may be driven by the need for institutions to "add value" to their respective education experiences for students at even higher levels than ever before. The heat is getting turned up...and this is good. I like to think that I'm part of a variety of efforts that really seeks to push the envelope in the application of technology in education. While the role of advancing technologies is, at this point unquestioned in education, it's important to keep focusing on the environments and experiences it can provide students and faculty. Personally, it helps me focus professionally when I think that what I'm doing is to help higher education differentiate itself. Perhaps that's just my marketing background coming out but either way, it's still a motivator. I like to think that the current economic challenges to education provides us a grand opportunity to utilize emerging learning technologies to raise the bar within the world's current problems. And not only to execute these innovative approaches but to do them with proven results that show the value in product.
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