It is fair to say that the financial crisis in 2007-2008 affected higher ed in ways that no one would have predicted a few years ago. It exposed several structural issues in our space and there have been numerous calls for the need to make significant changes. The word “disruption” came into play a fair amount and I would say Clayton Christensen’s “Disruptive Innovation” had something to do with it. The cost of higher ed is often cited as the reason why we need a serious disruption, rightfully so. However, no one offers any magical answers to solving this problem, which can be frustrating. One of my colleagues remarked “people have always complained that the Colleges cost too much money”. There is some truth to this. You can look at the trends in tuition, fees and board here and here. The latter one is pretty comprehensive and I suggest you look at all the data. Data will be interpreted in different ways because the topic is complex. Besides, aggregate data typically tells a very different story than data for a particular person. You may be paying for your children’s college a lot of money and based on your personal situation your story may be so different than what the reported aggregate data may be telling. However, if you you look here, the key points talk about some salient points and the important note says how the net price a student pays after taking into consideration of grant aid and tax considerations has been trending lower.

Regardless of all of this, we, in higher ed, collectively feel that we are at a point in time where disruptions are inevitable. I think some of the recent events should serve as a reminder that we are not immune to disruptions and the more we accept and prepare ourselves, the better our future will be.

In the recent past, we have heard several institutions winding their operations down. Some like, Corinthian Colleges , are undergoing a controlled shutdown resulting from legal complications and alleged malpractice. However, most recent news that shocked many is the announced closure of Sweet Briar College. The trustees recently voted to shut down the College based on the assessment that it is no longer financially viable to run the College, or in their own words “insurmountable financial challenges”. In addition, Tennessee Temple University, another small liberal arts college is also shutting down.  AIB College of Business in Iowa has decided to shut down and donate its campus to University of Iowa.

Then, there are several mergers that are taking place. Here is an excerpt from this article:

“Moody’s also cited several recent mergers, each involving at least one niche school, such as a stand-alone professional school or a faith-based institution: Salem State University and Montserrat College of Art; Hamline University School of Law and William Mitchell College of Law; Clarkson University and Union Graduate College; Arizona State University and Thunderbird School of Global Management; and Tennessee Temple University and Piedmont International University, which are both Christian colleges.”

A more important relevant news in the past week is Yale School of Medicine planning to offer a blended masters degree program for Physician’s Assistants.  The students will take most of the courses fully online, but have to travel physically to locations selected by the Yale School of Medicine for hands on clinical work. The primary motivation seems to be to reach out to students for his such programs are otherwise not available, such as remote parts of the country. This is significant news in that a very prestigious program expanding its residential program into this realm and feels that the blended version will be treated the same as the residential program!

You get the point. Whereas closures, mergers and acquisitions have been common in the corporate world, it is not so in higher ed, so as they begin to happen, there is sheer shock and confusion. Some of these institutions have been in existence for over 75 years and given how immune educational institutions have been from the external influences including previous financial crises, this can be shocking. On the other hand, at the risk of drawing a parallel that will be criticized, in the corporate world also the same questions were asked about longstanding institutions closing or going to massive changes.

I would say that all we can do is to be tuned into what is happening around us, develop a strong plan for the near and long term that in no way minimizes the value each of our institutions bring to educating our students and above all not be complacent. There are many complicating dimensions to this. There are hugely varying opinions on how to stay relevant. I am very encouraged about the conversations we are having at the College!