Wednesday, June 13, 2018

Six Forces Disrupting Higher Education

Universities and health care, “eds and meds”, have been in a huge growth cycle over the last few decades. Many communities have been pinning their hopes on anchor institutions like a university or research hospital to retool their economies for the 21st century.

Yet the higher education industry is facing a convergence of several trends and forces that threaten their future. At a minimum, schools need to be figuring out how to navigate these choppy waters ahead.

Here are six forces converging on colleges today and in the near future:

1. The number of college students will soon plunge. Professor Nathan Grawe, in his book Demographics and the Demand for Higher Education, built a model that projects the future demand for college. He found that starting in 2025, the number of college bound students is likely to decline substantially.

The elite top 50 will continue to experience robust demand, but others won’t be so luck. As Grawe told the Chronicle of Higher Education:

The bottom line is there’s almost nothing that’s going to get us around the fact that, in the late 2020s, we should see really significant reductions in enrollment. If your strategy for this is to try to increase enrollments, the model suggests that that’s a bad idea.

Grawe has provided a large amount of grim data on his web site.

2. Tuition is soaring at rates far higher than inflation. This chart from Carpe Diem and AEI says it all. Tuition and textbooks have nearly tripled in price since 1997:

How much more can students and their parents take?

3. Student loan debt is soaring. Earlier this year New York magazine put together this astonishing chart of the growth of student loan debt relative to other kinds of loans:

Over the last decade, college-loan balances in the United States have jumped more than $833 billion to reach an all-time high of $1.4 trillion, according to a recent report by Experian.

The average outstanding balance is now $34,144, up 62 percent over the last 10 years. In addition, the percentage of borrowers who owe $50,000 or more has tripled over the same time period, according to a separate report by the Consumer Financial Protection Bureau.

The $1.4 trillion in student loans outstanding new exceeds total credit card debt and total auto loan debt. Some people now have over $1 million in student loan debt.

4. The over-education problem. One factor that’s seldom directly pointed out is the disconnect between the number of people who go to college, and the number who can plausibly cash in from a degree.

34.9% of people ages 25-34 have a bachelors degree or higher. This is probably a fair proxy for the share of younger people who will likely get degrees. But is 35% of the American public able to get a high paying job? Indicators are not.

Much as been made of income inequality, the decline of the middle class, etc. Some share of the population, probably 20% or less, is reaping disproportionate rewards in the modern economy. Others have seen stagnating real wages. For example, the Atlantic just ran a cover story talking about the “9.9%” that had this chart showing the share of wealth held by the 0.1%, the 9.9%, and the bottom 90%:

Even if people in the next decile below the 9.9% are doing well, that still leaves a ton of people with degrees who don’t necessarily face great economic prospects.

They might instead end up changing diapers at a DC day care center. Washington put forth a mandate that day care workers have a college degree, which indicates they must believe there will be no shortage of takers.

Combine a degree that won’t grant access to the high wage economy with student loan debt and it’s a recipe for big problems for young people.

This is an area that deserves more study.

5. University inequality. It’s not just workers who face inequality, but schools themselves. The Wall Street Journal has been reporting on a potential shakeout among colleges, in which the higher end universities continue to do well, but those ranked nearer to the bottom are in trouble. In one article related to this divergence they note:

For generations, a swelling population of college-age students, rising enrollment rates and generous student loans helped all schools, even mediocre ones, to flourish. Those days are ending. According to an analysis of 20 years of freshman-enrollment data at 1,040 of the 1,052 schools listed in The Wall Street Journal/Times Higher Education ranking, U.S. not-for-profit colleges and universities are segregating into winners and losers—with winners growing and expanding and losers seeing the first signs of a death spiral.

Similar they written that many non-selective small liberal arts may be in trouble.

6. MOOCs. The rise of online education, notably in the form of “massively open online courses” has yet to disrupt the higher education model, but with the factors above bearing down, there’s a huge financial incentive to make this work. Industry after industry have been radically restructured by technology innovation, and it’s reasonable to believe that the business model of higher education will one day end up on the receiving end.

7. The credentialing cartel. It’s widely understood that the primary value in a degree is having it. The degree itself is perceived as a key credential granting access to the job market. As Austen Allred put it, “Would you rather have a Princeton diploma without the Princeton education, or a Princeton education without a Princeton diploma?”

Universities are in effect a cartel who can levy an entrance toll to the professional job market. This may last for quite some time, or even strengthen, but there is again great value to be unlocked in breaking this cartel. The tech industry is a good example, where even famous companies have been founded by drop outs. If you are a great developer, it doesn’t matter what your credentials are. This has been one secret to that industry’s success.

None of these inevitably spells doom for colleges, and certainly not for any individual one. There is also a lot of nuance not captured in this short posting. But as a highlight of potentially disruptive forces, it shows that there is quite a collection of powerful disruptors and potential disrupters arrayed against the university environment. Savvy institutions should be working hard to get fit for the road ahead.


Building boom at Boston charter schools outpaces that at other city schools

Eleven-year-old Serenity Withers and her schoolmates have lived a nomadic existence at Bridge Boston Charter School over the last five years as the school bounced from one lackluster building to another. One location was largely devoid of sunlight, and tutoring and instrumental lessons took place in the hallway. Recess was relegated to a parking lot.

But this year, after Bridge Boston spent $25 million renovating a shuttered community health center in Roxbury, Serenity finally enjoyed everything a public school building should offer: a cafeteria, gymnasium, science lab, several playgrounds, and a sunlit atrium that doubles as a library and assembly space.

“When I first walked in I was like, ‘Oh my God, this is my school,’” she said. “It’s nice to have a place to call home.”

From East Boston to Mattapan, most of the 16 charter schools in Boston have either a major construction project underway, recently completed one, or are about to embark on one. The 11 projects collectively total almost $300 million and will create about 600,000 square feet for 5,700 students in kindergarten through grade 12, according to a Globe analysis.

The flurry of activity among these independently run public schools over the past five years starkly contrasts the anemic pace of a school construction program launched by Mayor Martin J. Walsh, who made a campaign pledge in 2013 to spend $1 billion to fix the city’s deteriorating school buildings.

But city and school officials have yet to devise a plan detailing which schools would get new buildings or major renovations, and no plan appears forthcoming. Just last month, Superintendent Tommy Chang told the School Committee, while responding to one member’s pointed questions, that an advisory group of more than 30 people will be assembled for more community engagement before any plan is drafted.

Meanwhile, the only large-scale projects moving forward have been in the pipeline since the days of then-Mayor Thomas M. Menino: The Dearborn STEM Academy is slated to move into a new building this fall, the Eliot K-8 Innovation School finished renovating a building last year, and Boston Arts Academy’s building will be replaced with a modern structure. Planning for a fourth project, Quincy Upper School, has repeatedly stalled.

The Boston Public Schools defended its construction investments, noting that the combined costs of the Dearborn and Boston Arts projects are $200 million, which includes $86 million in state reimbursements. The school system also said it is planning to renovate the Carter School and is spending $18.5 million to refurbish another building for the Eliot, giving that school three locations.

“BPS and the City of Boston are in the process of developing a thoughtful, deliberate long-term strategy to address the individual needs of schools and the overall needs of the district,” Richard Weir, a school system spokesman said in a statement.

That charters are establishing a stronger track record than the city in bringing large-scale projects to fruition defies expectations for these schools, which are barred under state law from receiving lucrative reimbursements from the Massachusetts School Building Authority for any construction or repairs.

Charters also cannot borrow money under the city’s very strong bond rating. Instead, they must cobble money together from a variety of sources, often securing private-sector loans, launching multimillion-dollar fund-raising campaigns, and squirreling away some of their per-student state aid that is earmarked for facility expenses.

All the while, charter school leaders have to hunt for an ideal site in Boston’s tight real estate market, while sometimes wading through contentious community debate.

Jon Clark, codirector of Brooke Charter Schools, said charters are probably achieving construction success because of pressing urgency. Many charters have been running out of space in woefully inadequate buildings because of rapid enrollment growth.

He also noted that even though charters face greater challenges in financing projects, their small size makes it easier for them to make a decision than in a large system like Boston, which must come up with an equitable plan for all of its 125 schools.

“We are a lot more nimble,” he said.

In addition to Bridge Boston, Boston Preparatory Charter School in Hyde Park opened a new building this year. Brooke Charter Schools will follow in the fall with a new high school in Mattapan — its third project in four years — while Boston Collegiate Charter School is expanding its Dorchester site.

More are probably on the way. Conservatory Lab Charter School recently received city approval for a building in Dorchester, and Roxbury Preparatory Charter School is in the midst of a heated neighborhood debate over erecting a high school in Roslindale.

All these projects follow others completed in recent years by Codman Academy in Dorchester, KIPP Academy in Mattapan, and Excel Academy in East Boston. Brooke also did two projects for its lower-grade students in East Boston and Mattapan.

“It has been a very long journey,” said Yully Cha, executive director of Bridge Boston, noting that more than 20 locations were vetted. “The incredible responsibility to put forward something that will last, and the number of zeros attached to each decision was overwhelming.”

But she added, “The new facility elevates the expectations of our students and reflects the value of our students.”

The project, which was the subject of 16 community meetings, raised concerns in the neighborhood over traffic. But school leaders eventually won over some detractors by emphasizing they wanted to become part of the neighborhood’s fabric while noting they would be near many nonprofit partners and students’ homes.

The Roxbury Prep project would be the largest, housing 800 students in a three-story building featuring a cafeteria, gymnasium, and 66 parking spaces. Although some neighbors support the project, others oppose it, worried about traffic and parked cars flooding their neighborhood.

About a half-dozen elected officials sent a letter last month to the Boston Planning and Development Agency objecting to the project, arguing that Roxbury Prep has insufficiently addressed the concerns of residents.

Roxbury Prep leaders say they have taken steps to address some issues. For instance, they added an underground parking garage and reduced the number of students who would attend.

“Everyone knows there is development fatigue in many communities in Boston,” said Anna Hall, a chief operating officer for Uncommon Schools, an out-of-state charter management organization that runs Roxbury Prep. “We are super sympathetic to it.”

But she added, the location, which currently is an underutilized auto services site, will eventually be redeveloped by someone, and for Roxbury Prep it solves a big problem: Its high school is currently split between two locations in two neighborhoods.

Officials for the Greater Belgrade Avenue Neighborhood Association Inc., a vocal opponent of the project, declined to comment for this story.

When officials at Codman Academy scoured their section of Dorchester for a place to house their primary grades, they knocked on the doors of buildings not even for sale. Their tenacity paid off. They purchased a building across the street from their high school program that was not on the market but had been struggling to fill empty storefronts and offices.

The design of the $12 million project took on a novel theme that emulates a walk in the woods, inspired by research on how students experiencing trauma can find comfort in nature.

Classrooms and hallways are painted in earth tones instead of bright primary colors and feature twig and leaf designs. The school also boasts a garden-like play area outside.

“We saw a big shift in students’ eagerness to be in school and saw more smiles,” said Thabiti Brown, Codman’s head of school. “I think over time we will see those academic results.”


Gutless Australian National University

Bettina Arndt

My latest concern is the decision by the ANU to buckle to pressure from students and the union and pull out of negotiations with the Ramsay Centre over the proposed course on Western Civilisation. I’m sure you will have read about what’s going on there.

I have a long history with what was once a great university. My brilliant father, the economist Heinz Arndt, was one of the founding professors and worked there for over 50 years. I was on the ANU Council for over 17 years and watched many of the university’s leaders establish a formidable institution. 

I have just written to the current Vice-Chancellor, Brian Schmidt, telling him my father would be turning in his grave about the Ramsay decision. 

As the university’s own website makes clear the Ramsay negotiators were not desiring an undue level of influence over delivery of the programs, staff appointments, what was to be taught and by whom. Indeed, I was surprised to hear that Ramsay had agreed to allow the ANU to have ultimate control over all these matters – a very brave decision given the fact that many academics currently working in the humanities at the university are so clearly antagonistic to the values inherent in the Western Civilisation course.

You may not be aware that these issues had been fully discussed and agreed upon by the two parties to the negotiation, as the University’s CASS website demonstrates. Here is the link:

Here are some extracts from that website:

7. What are the risks to the ANU? ….The University’s legal framework requires ANU to retain control of the delivery of its programs. Our strong University academic structures govern academic curriculum, delivery and standards and any new degree would need to be approved by the usual ANU processes and subject to the usual quality reviews. The proposed Ramsay Scholarships would be ANU Scholarships, and, as such, also fall under University policies and procedures. Students in the proposed program would be subject to ANU legislation, policies and procedures regarding academic progress, misconduct and discipline. Similarly, staff appointed under any funding arrangements would be appointed by an ANU selection committee and would be ANU employees, subject to the University’s HR processes and procedures.

15. Who will decide the curriculum? Curriculum recommendations will be made by the Partnership Management Committee (consisting of two academic staff from the Ramsay Centre and two academics from the ANU, one of whom is the Dean of CASS) and considered through the normal ANU academic processes.

Also clause 25 regarding selection of staff for the Centre spells out that hiring decisions will be made in accordance with the normal hiring procedures and that the staff will be all ANU employees. “Ramsay would have a limited number of nominees on the selection committee but the committee would be chaired by the Dean of CASS and have a majority of ANU nominees.”

As this website states,  this is all normal practice at the university. It is clear from the wording of the website that the two parties had reached agreement on all these key issues, prior to intervention from the union and the decision by the ANU to back away from the long negotiations. I believe you are being misled by one or more key players who have sought to scuttle the deal.

I am already aware of many eminent people connected to the university who are very alarmed by what is happening and I can assure you that the public concern will only increase. I know there are many current academics staff who are shocked by this turn of events but too nervous to speak out – which demonstrates the impact the current corrosive climate is having on academic autonomy and intellectual freedom.

Please help me spread the word about what’s going on behind the scenes in the Ramsay/ANU scandal – many people are working really hard to misrepresent the facts. 

Via email from

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