This cost issue is a serious problem, but it is not the only challenge in higher education. The whole sector is facing increased scrutiny on a variety of fronts.
Concern about the performance of higher education is no longer limited to policymakers and researchers. It is widespread, and for good reason: The failures of our colleges and universities are reflected in our economy, our social stability and our quest for an equitable society.
In a recent poll by Time magazine and the Carnegie Corp., 89% of U.S. adults say higher education is in crisis; 54% say it is moving in the wrong direction; 96% of senior higher education administrators say their sector is in crisis; 40% say that crisis is “severe.”
There are a wide range of concerns. Here are a few receiving attention:
College cost, part I.
According to the Pew Research Center, 75% of Americans say that college is too expensive. The average annual cost of a four-year public university is $15,100 and a private university is $32,900. A child born today will need $41,000 a year for public college and $93,000 a year for private college at the current rate of growth. The cost of a college degree has risen 1,120% since 1978, four times faster than the increase in the consumer price index.
College cost, part II.
The flip side is the debt problem: Student debt is now a trillion dollars, more than car or credit card debt. One in five households has student debt, while the average student loan debt is more than $26,000.
Only 57% of first-time full-time students receive their bachelor’s degree within six years. The graduation rates are even lower for underrepresented groups (49% for Hispanics, 39 % for blacks, 38% for Native Americans). America now ranks 14th in the percentage of young adults with a college degree.
Under preparation/skills mismatch.
In a recent report by McKinsey & Co., less than half of American employers believe their new employees are adequately prepared in their postsecondary education and/or training programs. In some fields, there are skill mismatches. According to Microsoft, “between 2010 and 2020, the American economy will annually produce more than 120,000 additional computing jobs that will require at least a bachelor’s degree, but the country’s higher education system is currently producing only 40,000 bachelor’s degrees in computer science annually.”
According to a report issued by Bain & Co., one third of the nearly 1,700 colleges and universities they examined are on an “unsustainable financial path.” A headline of Moody’s midyear 2012 higher education report is “Weak Economic Recovery, Government Budget Stress, Regulatory Risk and Rising Student Debt Pose Growing Challenges for Majority of Sector.”
Answers to these problems are complex, but they do exist. We know of at least four broad areas in which higher education needs to make significant improvements: They need to control escalating costs and provide lower cost quality alternatives. They need to synchronize their work with businesses and K-12 education. They need to define, measure and be held accountable for the skills they provide to their graduates. And they need to harness technology in both management and teaching/learning.
Clearly, not all colleges and universities are in the troubled category. Many are doing a fine job; many are healthy. (In fact, at the top end of the scale, the elites are in ever increasing demand, now accepting less than 10% of their applicants.) Despite the good work, higher education, as a whole, has yet to adapt to the needs of the new millennium.
There is only one safe prediction for 2013: It will be another year of uncertainty and change. That is the way of the world in which we live. No institution — including colleges and universities — is immune, no matter how old, how established or how important.
If adaptation is too slow or inadequate, regulation and/or forced change, either from the government or the marketplace, are inevitable. In the past few years, we have seen this happen to companies and institutions that we thought were untouchable.
Colleges and universities still have time to make these changes, but time is running out.