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A Path Less Traveled

How should a university prepare for a changing economic and financial environment?

By Jane S. Shaw

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March 11, 2012

Many assumptions about how to manage universities are being questioned these days. State appropriations are falling, the public is beginning to doubt the value of higher education, and for-profit competitors are threatening to take away students. The latest warning signal for four-year universities is that community colleges are drawing students even in wealthy communities.

To cope with these changes, I see three broad approaches that public universities can take.

One is to make up for state appropriations with increasing tuition. This approach has been adopted by a few flagship universities and is usually tied to less regulation by the state. The University of Virginia and the University of Michigan have taken this step toward privatization, and some schools in the University of California system may be joining them. Others could do so easily.

For most state universities, however, the straightforward approach is simply to stop growing. Each additional student costs the taxpayers money. The University of North Carolina, for one, appears to be moving in this direction. After years of rapid growth, it has been raising admissions standards, with the result that overall enrollment has leveled off instead of continuing to rise. The students who don’t make the cut still have opportunity. They can attend community colleges if they want postsecondary education, and the university system is attempting to ease the transfer process for community college students who wish to complete four-year degrees. 

But a third model has emerged, too: Don’t cut back; grow faster instead, by putting more students through the university more efficiently and quickly.

A few universities have experimented with this approach, including Brigham Young University-Idaho, Southern New Hampshire University, and the University of Maryland University College (UMUC). Arizona State University and Western Governors University are also leaders in this sort of innovation, as the Pope Center’s Duke Cheston has reported.

To some extent, these universities are emulating for-profit universities, which some years ago discovered a new market—non-traditional students—and adopted online education as the chief way of teaching them. Expanding the market for higher education, for-profits now enroll about 10 percent of all college students.

The strategy of these growing schools is in line with the current national mood, which still espouses greater access to college. And they are embracing technology that lowers costs, enabling them to propel more students through. But if they go too far in the direction of bringing in students for revenue—just for revenue—they will compromise their achievements and the value of their diplomas may fall. There is evidence that at least one of these schools has “dumbed down” its curriculum.

BYU-Idaho, a private school owned by the Church of Jesus Christ of Latter-Day Saints, has gone perhaps the farthest in revamping traditional education. Its policies are outlined in The Innovative University, a book by technology guru Clayton Christensen and Henry Eyring, an administrator at BYU-Idaho. My review of that book emphasized its response to new technology, but much more happened there.

BYU-Idaho started out as Ricks College, a Mormon school in Rexburg, Idaho. Surveys had shown that students in Mormon colleges remained truer to the faith than those who went to secular schools, so the church leadership decided to make Ricks into a bigger school.

Thus, starting around 1997, president David Bednar made dramatic changes (including a name change). One step was to adopt true year-round teaching. Summer became as important as the other semesters (students could start their education in any semester). Online classes were expanded, and face-to-face classes added online technology. Other major changes: Intercollegiate athletics were dropped, graduate programs were dropped, and attention to research was minimized. The school also “modularized” courses into clusters so that students could progress more efficiently to a degree. (In many schools, it’s hard to get the classes you need for your major in a timely manner.)

Between 2000 and 2010, BYU-Idaho’s enrollment grew from 10,160 to 18,355, an 80 percent increase. According to The Innovative University, the number of faculty went up too, by 50 percent, but building square footage went down, from 153 to 126 per student. The administration reduced the number of academic departments and degrees, and the operating cost per student went from $5,771 to $6,155—an increase of less than 7 percent. The school’s six-year graduation rate is currently 61 percent.

Another rapid-growth school is the University of Maryland University College (UMUC). Part of the university system of Maryland, it was early in espousing online education. Created in 1947 as a school of continuing education for adults (in fact, its roots go back to the 1920s), it has had a close relationship with the military since 1949, and it now has a presence in Asia and Europe. According to Inside Higher Ed, UMUC grew from 71,560 students in 2000 to 96,342 in 2011.

The college has no tenure and therefore is not exactly “traditional.” But recent events have called its success into question. In February, the president, Susan Aldridge, was placed on “administrative leave” without explanation, and Inside Higher Ed reports that faculty members “have repeatedly expressed dissatisfaction with the university’s administration, raising concerns about pay, shared governance, and professors' views that the administration lacked interest in academic standards.”

UMUC’s decision to make many 15-week courses into 8-week courses puts unusual pressure on students, many of whom are military staff who work 8- to 14-hour days. The apparent emphasis on getting students into and through the system (regardless of the quality of their education) may have contributed to Aldridge’s suspension.

Southern New Hampshire University, a private, nonprofit school, is also in a growth mode, using online education as its chief tool. According to the Chronicle of Higher Education, the school’s online subsidiary is earning profits that are then plowed back into the bricks-and-mortar campus in Manchester. Like BYU-Idaho, this school is highlighted in The Innovative University. It reflects Clayton Christensen’s contention that the only way for traditional universities to compete with online education is to create an autonomous unit that is not restricted by past ways of doing things. And that is what SNHU has done.

What are the lessons from these pioneers?

First, such colleges are rare. Even in good times, only a handful of college presidents are willing to shake things up. As Duke Cheston wrote about the ability of Michael Crow, Arizona State’s ground-breaking president, to make changes: “In a field that is usually mule-like in its resistance to change, this is remarkable.“ And while many traditional universities have adopted online learning, they see it as an additional revenue stream, not a way to cut costs. Some schools even charge students more for it.

Second, these schools aren’t yet successes. Changing the culture of a university is hard. BYU-Idaho’s transition was aided by its shared religious tradition and respect for the church’s hierarchy. UMUC is running into faculty opposition. Arizona State has had to raise tuition dramatically and has come under fire for proliferating numbers of administrators. 

Third, there is the danger that pushing more students through will reduce the value of the degree (a problem that plagues traditional schools as well, just less obviously). These rapid-growth universities, like for-profit schools, may be going too far in recruiting students who aren’t capable. That seems to be part of the message from the University of Maryland University College, where faculty feel under pressure to pass students regardless of whether they have learned the material.

On the other hand, these schools are breaking the mold. They are learning how to lower their costs, something that has been impossible for most non-profit universities so far. As economists know, lower prices can spur demand.

No one can predict what will happen in higher education over the next few years, but there is plenty of talk that the college “bubble” will burst. If it does, enrollment and prices (tuition)  will fall. These growing schools have the knowledge and experience that will let them reduce their prices and keep enrollment high—something that traditional universities will have difficulty doing. So, these schools are worth watching. They may be among the survivors, and financially healthy ones at that.

 


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