Higher Education Models for Survival

Posted on September 30, 2012June 2, 2014 by David C. Brake

In my last blog, I talked about some of the challenges higher education institutions face to be sustainable. Of course no one has all the answers, but I think it’s important to start asking questions and begin thinking about some of these things. I keep hearing the face of education is changing, but will the consequences be disastrous for American Universities? If so, how will that affect the rest of us, and will it change what learning means? Will those universities that make it through the next decade do so by engaging new and potential students in new ways? Is it true that kids will need more convincing of the advantages when departing from their money and taking on new debt becomes a harder sell? (Is it true that I ask too many questions?)

By the way, for anyone who thinks I am spreading unnecessary gloom & doom about the state of higher education financials (or watering it down), here is a more emphatic economic viewpoint here: colleges that will be screwed when the student loan bubble pops, and for an extreme student perspective, try www.uncollege.org.

Meanwhile, I am going to jot down some thoughts about some of the major changes already taking place in response to the pressures burdening higher education. Some examples to explore are: free courses, grassroots education, and online universities. Additionally, I will mention a few other things that universities are doing to adapt, overcome, and survive.

Is it Socialism, or a Techno-Cultural Revolution?

So why should a fresh high school graduate go into debt when they can take free high level courses offered by high profile universities like MIT, Oxford, and Berkley? Why should they struggle to stay awake in endless lectures when they can take the class on their own terms? One answer might be for the credentials, but here are two key facts:

The perception of a college diploma has done a complete one-eighty in the minds of some in the millennial generation from their grandparent’s day. Universities have to shift their focus and what they have to offer, or they may wither on the vine of progression.

To make things even more competitive for universities, online colleges are gaining momentum, and credibility. They come at a fraction of the price, although as of yet there is still no legislation to protect students from predatory private loan lending. They do seem to be effective for some applications, even though all the trimmings have been shaved away.

No dorms, no sports, no walking to and from class. They’ve got archived classes, live and interactive classes through webinars, 24/7 tech, and possibly tutoring support, as well as virtual advising. An education in the palm of your hand? Perhaps, if you can tune out everything else around you and pay attention.

The direction that education is going with ebooks, mobile technology, and virtual reality is providing some interesting options as education is being organically socialized through technology.

Traditional Education Plays Along

If students do opt to pay for a university, who will they choose and why? Before answering this rhetorical question, I want to mention a simple truth I just came across that I found interesting. I was previously unaware of this. Apparently, statistics show the male participation rate in the workforce is at an all time low in America, while the ladies are enjoying their highest participation rate in US history. Male dominated industrialism is fading away, and there isn’t enough money floating around the service sector. Where have these guys got to turn?

In the last few days, the world has seen unprecedented riots in both Spain and Greece in response to basically one thing: unemployment. They’ve got millions of millennials with no job prospects. If any of them have access to a university, they may choose the one that convinces them it can maximize the value of their education, while minimizing investment risk and overall costs.

What Colleges Are Offering

Collaborative Social Value
High Job Placement Rates
Educations that Follow Industry Trends
Social Media Access and Integration

Many people may want jobs, but most desire full-fledged careers and they’ll likely pick the establishments that can prove they’ll deliver. To add to the scrutiny they face from students, cash strapped state and federal accreditation agencies are coming down hard as well.

With low job placement rates, colleges could lose a big part of the whole can of worms. They can have their accreditation stripped away, the ability to offer financial aid taken away, or have their doors shuttered for good. Social Darwinism seems to be taking over the educational system, and high income success rates are an important niche available to exploit.

In response, companies like Mach Interview are springing up to assist universities with higher job placement rates. Through consultation and determined methodologies, they are helping them turn things around using things like:

Online Career Profiles & Portfolios for Students
Special Niche/Industry Specific Software
Interactive Job Placement Curriculums
Working and Networking Directly with Recruiters during school.

As far as national trends go, for women the biggest push in the last four or five years has been the medical and nursing field. For better or worse, Healthcare in general in response to the aging boomer generation has manifested all kinds of localized small universities like Devry that try to cater especially to them.

For men (also for better or worse), the workforce seems to be going virtual. Our advertising tells men to join the military, learn a specific craft, or get behind a computer screen. Getting a degree in History, Literature, or General Studies isn’t pushed as hard anymore. If they choose to enter a university to pursue fields within the math and science categories, it is assumed they want curriculum tailored for a certain career path.

Where the Learning Curve Ends

Globalism, automation, nanotechnology, and virtual intelligence are changing what it means to be educated. This is happening as the collapse of old systems causes a reorganizing of the perception of work and education. Many things can be self taught or taught through peer to peer learning, universities are becoming more like clubs with social networking streams, and grassroots education is picking up steam. People are simply coming together and teaching one another. They are buying and selling quasi black market educations amidst a jobless recovery and a cashless society.

“Why pay for a class when you can download an extensive ebook independently published for free by a laid off professor on any subject for as little as a dollar?”

Plenty of universities will undoubtedly survive and live on. They will adapt to trends, make job placement rates a priority, and market the success stories that emanate from the social interaction that only comes from learning together on a campus. This is fair, and children and parents will always admire a classroom education and credentials, but will that mean the same thing as it once did? Perhaps more importantly, should it?

Will Higher Education Have a Higher Mortality Rate?

Posted on September 23, 2012June 2, 2014 by David C. Brake

This topic came up briefly while talking to a few college students the other night at Startup Houston roundtable about whether they felt they were getting their money’s worth, so I thought I’d throw in my two cents. While historically, higher education in America led the way in terms of global leadership and turning a profit, there are some who believe that paradigm may be changing. Colleges are contending now not only with the chaotic bursting of the credit bubble, but also with a growing population of disillusioned potential students.

These young men and women have watched the months go by as literally millions of people throw up their hands and leave the workforce; many of whom already have accredited four year diplomas. Additionally, their parents are strapped for cash, most likely unemployed/underemployed themselves, and have also lost faith in the educational system in general. Let’s look at some financial aspects and social variables which may determine which Universities are likely to survive.

Appealing to a Changing Social Dynamic

The traditional “well rounded” education may be losing its perceived luster. The workforce of the 21st century is telling people they need well defined schooling, niche curriculums, and technologically dense programs. Fewer people want to study French literature, while drastically more feel that they need to sit behind a computer screen and get an edge on modernity.

Students are drawn by the potential to make money once they graduate, rather than simply being able to tell someone they have a degree. The millennial generation cares very little for paper diplomas and tassels anymore. They want to believe that they’re going into debt with better chances of well paying careers.

During the credit bubble of the last thirty years, families were more than happy to send their children, most of whom were first generation attendees, to school under the pretense that paying off loans would be a cinch with a prestigious certificate. These days, those who already have them are churning out horror stories of debt serfdom to what is sometimes perceived as a profit driven franchise that sold them a fairytale.

The universities that will make it through the next decade may well be those that can adequately demonstrate both the importance of the experience and that their graduates move on to jobs in thriving sectors of real economies.

Finances Determine Everything Moving Forward

Like the US government drowning in deficit spending, over a third of US colleges look like major banking and investment firms. Their books are riddled with overleveraged debts, and dwindling incomes/investors. Their expenditures are through the roof, while their attendance is less than spectacular and doesn’t always cover basic operational costs.

This research put together by www.thesustainableuniversity.com suggests that the landscape of higher education may look like the banking sector soon, with more and more going bankrupt and disappearing. They would suggest that liquidity is the name of the game, and only those that can get their books in order are going to weather the fiscal storm. They state the following: “Institutions have more liabilities, higher debt service and increasing expense without the revenue or the cash reserves to back them up.”

Simply raising tuition isn’t going to work. Exponentially inflating costs of living, commodities, and basic necessities will see to that. Instead, the lion’s share of success is going to go to (of those without huge endowments) those that can find ways to lower costs, while also giving students new services and options that they see as relevant today.

The old dynamic of spending more and more into success quite frankly looks insane even from a freshmen accounting major’s perspective these days.

Determining Risk Factors for Universities

Are those colleges that spend more and more without specifying their curriculum to suit new demands in extreme danger? It seems that for nearly any institution that isn’t currently considered cream of the crop, the downward pressure is immense.

With potential hyperinflation right around the corner, millions in endowment money is becoming chump change, and serious reorganizing is in order for those that don’t fall into the billions category.

US assets aren’t the only thing being downgraded. If the books are in complete agony, and tuition becomes a crutch, bond downgrades are likely to take a chunk out of survivability.

Colleges that have, out of necessity, had to turn to drastic measures like lowering standards, laying off faculty, or poignant tuition hikes will be perceived to have a short shelf life.

Digital Salvation & Outsourcing

From strategically putting money where the innovation is, the growth of ecommerce, and outsourcing data center and IT work, universities are scrambling for digital salvation. At the end of the day, even if they get their books completely in order, get their real estate values in line with reality, and cut down on a plethora of unnecessary expenditures – without adequate numbers of students, obviously failure is inevitable.

And so they say, the challenge facing higher education has never been greater; the risks have never been sharper; and the incoming tsunami of the higher education bubble has already pulled out the tide by a mile. Here are four things in my view that set apart those that are likely to succeed from those that are staring down the barrel of a financial gun:

Colleges with a concise, and well defined strategy of change and evolution, coupled with a stringent focus on providing value and a higher job placement rate.
Institutions that incrementally cut down on both support and administrative costs, while still managing to give students access to modernizing research and development.
Determined and smart investment in innovation that is perceived by students as both valuable and constructive.
Universities that legitimately conjure up free capital in non-essential assets.

It would seem that only the universities that take the time to regularly examine positive and negative perceptions of their perceived value and react accordingly will stand the best chance to leverage what they need to compete with the likes of Stanford or Harvard. I doubt this is any longer an optional exercise, as students increasingly begin to view their tuition and time as an investment rather than a requirement of the status quo.

How Did We Get To Be So Fat?

Posted on September 16, 2012June 2, 2014 by David C. Brake

Ok this is off topic and I may be going out on a limb here, but my wife and I recently went “day care shopping” for our daughter, and I couldn’t help notice the difference between what the kids were eating at the day care schools and the way we eat at home. Not to hold myself up as any pillar of virtue, mind you. I’ve been known to woof down the occasional twinkie, and recently hurt myself this summer touring the Bluebell Ice Cream Factory by sampling four complete scoops of varied flavors consecutively–but the key word here is “occasional.” (To me, that means not every day.) Anyway, I remembered an article I read recently about how the U.S. Centers for Disease Control and Prevention released a new report indicating that an estimated 42% of Americans will be obese by the year 2030—and I got to thinking, how did we get to be so fat? Then came the day care connection, and the thought entered my mind that maybe it’s a tough habit to break because we pick it up earlier than we think.

School Meals

Childhood obesity is a growing problem in the United States. Today, around 20% of children aged 6-11 in public schools are obese, up from just 7% in the early 80’s. The problem among teens isn’t much better. 18% of students aged 12-19 are obese, nearly four times the low 5% we enjoyed thirty years ago. The causes are diverse, from popular high-calorie options in school meals to the abolition of many physical education programs to a general lack of nutritional education classes in our public schools. The solutions are likely just as diverse, and while we may be on the right track with some of them, there is still a lot of work ahead of us in improving the quality of the meals in our public schools.

Meal Composition

First, one of our biggest problems may be a cultural lack of education and understanding about the composition of a healthy meal. Many people seem to believe that fat is the only cause of obesity, and that cutting fat is progress. This is not true; fats often take more energy (in calories) to transform into body fat as simple carbohydrates do. Simple carbohydrates are also vastly more prevalent, thanks to the refining process we use to produce corn syrup and other corn derivatives. In our crusade against fat, we have also prejudiced ourselves against some healthy foods, like fish, ham, lean beef, and poultry. Proteins are among the most filling foods in part because it takes more energy to digest and incorporate their caloric content into our bodies. Simple carbohydrates are among the least filling for an inverse reason; they’re second only to alcohol in the ease with which our bodies metabolize them into body fat. Saturated fat is a true problem, but we have largely lumped the good with the bad and demonized fats altogether.

While we may limit our serving sizes for French fries or our fat content for chocolate milk, as a nation we are still unconvinced that a carbohydrate heavy diet is part of the problem. When we do limit the density of simple carbohydrates in our school meals, students often find them elsewhere, and usually they find them in the ubiquitous vending machines in public schools all over our nation. From candy to chips to corn syrup-based carbonated drinks, students everywhere are supplementing or even replacing their healthy school meal options with junk food. The problem here is often money. Schools have come to rely on vending machines and the corporate entities that push those products for a portion of their funding, and they cannot easily rid themselves of the machines without making serious cuts to their badly strained budgets.

Swapping a Negative for a Positive

School meals also are often high in sodium and low in fiber. Heavily processed or commercially prepared foods, such as pizzas, breaded chicken fingers or nuggets, burritos, and beef patties make up as much as 40% of school lunch entrée options. These are heavy contributors to the high sodium, low fiber content in our public school meals.

The result of all this is that America’s children are increasingly obese. They are developing myriad physical and psychological problems. Many have glucose levels indicative of prediabetes, a serious risk factor for adult type II diabetes. They are developing sleep apnea and joint problems. Obese children are at serious risk of adult onset heart disease and osteoarthritis. Furthermore, these children are at higher risk for a broad variety of cancers, from heart to kidney to breast and prostate, Hodgekin’s lymphoma and multiple myeloma.

Learning to be Lightweight

These are dark tidings for our children indeed, but I am told there are solutions on the horizon. The Healthy, Hunger-Free Kids Act of 2010 calls for big improvements to school lunch nutrition. Under the Act, many of the problems with school meals are addressed directly and requirements are now in place to bring healthier meals to the classrooms of America. Time will tell whether this strategy will be effective, but many have high hopes in this regard.

Of the problems that need to be addressed foremost, vending machines top the list. From elementary to high school, the percentage of children consuming these high energy, low nutrition snack foods with their school meals weighs in at 17% to around 40% respectively. If we have to pay a little more to make up for the funds that schools would lose by eliminating these machines, we may very well make up for the expense with reduced medical costs for these children later in life.

Next in importance is the need for nutritional education. I have to ask myself and our country, seriously: if we want to reduce healthcare costs, why isn’t this a priority curriculum? Very few schools have dedicated classes on nutrition and wellness, and a little education can go a long way toward better health. “Health” classes in schools normally focus either on exercise alone or on sex education (an equally important but separate issue). While these are important topics, there is little said about macronutrient balance, caloric intake, or the importance of a diet that includes natural raw fruits and vegetables.

Education on caloric intake is vital, as is the need to measure the fat & sugar/corn syrup calories our children consume in public schools. While exercise is a necessary component of cardiovascular, muscular, and skeletal health, it is not the most important factor for obesity. That problem is all wrapped up in our intake. Our children need to learn that skipping the cheese on a burger can do as much to lower their bodyweight as twenty minutes of brisk walking. Our school administration needs to know how many (and more importantly what kind) of calories are in their meals and what effect that can have when weighed against the students’ basal metabolic rate and activity level. More focus on lean proteins and unsaturated fats will improve school meals markedly.

Though they say change is coming for America’s school meal programs, the plan is not complete, nor is the mission accomplished. Of course I’m no expert, but I was thinking that maybe if we start asking the tough questions about how it happened, perhaps with a little effort we will all be able to look forward to a healthier America in 2030 rather than 50% of us rolling around like Weebles from vending machine to vending machine across the countryside.

Want to weigh in on this topic? (Ooh, that one hurt!) Please leave comments.