Higher education’s future: The fall of the ivory tower

The last 20 years have seen massive changes in higher education, with schools investing heavily in infrastructure in an effort to exceed each other in optimizing the student experience. Supplemented by heavy marketing, a doubling of tuition costs between 1995 and 2020 and endless student-loan providers, higher education became big business.

Then came the pandemic. In fall 2020, no school can count on full enrollment. The pandemic scared students enough for them to take a closer look at their education — to put brand and college experience aside and ask real questions about their future, about how to spend their money and what they really want.

During the last 20 years, most institutions of higher education have invested in a similar mantra: if you build it, they will come. This meant a formula of heavily investing in better dorms, student centers and academic buildings. Along with these buildings, also came an explosion in personnel: people to fundraise for the buildings; people to maintain the buildings; people to clean the buildings; all of these people who add to the bottom line.

These costs were supplemented by hordes of families who absorbed the growing costs of education, mostly through loans, while ignoring the detail that none of these things actually made students more likely to succeed.

Then, just as the housing market did in 2009, the bubble burst. Tuition might no longer be able to steadily increase. Demand is unknown and the average school, like the average investment bank a decade ago, is in big trouble; overleveraged with debt on capital projects, massive operating budgets and personnel costs.

The pandemic made families have different conversations about higher education. The conversations shifted from, “What’s the best branded school I can attend?” to “Where’s the safest place or the easiest place to work with moving forward?” As students started to ask what options they had, something became clear: There are a lot more great places than people think.

A plethora of schools offer world-class education, with flexible modes of delivery at excellent values.

As you can imagine, this is a big problem for the more prestigious schools of higher learning. Suddenly, and quite ironically, administrators must practice what their institutions preach: they must be dynamic problem-solvers. Unfortunately, many administrators have been completely inept, looking more like freshmen trying to navigate their first day at college rather than elite business professionals who run Fortune 500 companies.

The coming years will be hard for higher education. Some schools may not make it. Jobs will be lost and in the short term this is bad news for higher education. But I also believe that it’s an important opportunity; it’s a chance to reset and consider what can be done differently.

I believe the answer is for schools to focus solely on their role in molding minds that can collectively contribute to our society, both socially and economically. We need people who are great critical thinkers and want to work collaboratively across cultures to solve problems.

The colleges and universities that embrace academic rigor and social responsibility in their curriculum will be uniquely situated to help not only their students succeed, but the schools as well.