Colleges and universities in the U.S. are currently looking at ways to boost enrollment numbers, looking to provide improved working conditions for campus faculty and staff and creating and implementing risk management and preparedness programs.
These are among the trends identified in Deloitte’s 2023 Higher Education Trends report, published last week. The full report is available here.
The global pandemic caused a period of disruption for colleges and universities, prompting a series of challenges and opportunities for schools that are transforming schools across the nation. Institutions across geographies, brands and type are all experiencing five common trends, according to the Deloitte report.
Trend #1: College enrollment reaches its peak. Undergraduate enrollment in the U.S. topped out in 2010-2011 at 18.1 million, and then began to steadily drop with a steep decline in the first full academic year of the pandemic. As of Fall 2022, undergraduate enrollment was approximately 15.1 million and since 2020, 1.23 million fewer undergraduate students enrolled in American colleges and universities. The biggest group skipping college is men, and currently, about 56 percent of enrolled students are women.
Many higher education institutions are turning their attention to enrolling adult students, but the process is more difficult than enrolling recent high school graduates. Locating, reaching and enrolling adults who may have accumulated post-secondary credits but did not earn a degree is difficult, as is persuading them to return to college to complete their degree.
Trend #2: The value of the degree undergoes further questioning. Over the past several years, the perceived value of higher education has fallen off, and some employers in the government and private sectors are moving toward skills-based hiring and dropping the bachelor’s degree prerequisite for many positions.
The very top of the higher education market is largely insulated, as earning a degree from a big-name public university or elite private college still carries prestige. However, the vast majority of colleges and universities are no longer seen as the best source for skills employers seek, and the value of a post-secondary degree is closely linked to a school’s reputation, the student’s major and the skills learned while earning a degree. “Given most students neither attend highly selective colleges nor major in fields with the highest return on investment, colleges can no longer insist the degree is valuable without providing students with the skills employers want,” says the Deloitte report.
Trend #3: The business model faces a full-scale transformation. Institutions cannot rely on rising tuition for traditional students as the primary revenue driver. According to the report, current models have two fundamental flaws, and institutions must address them immediately in order to survive and thrive.
First, the cost-value equation is misaligned, and higher education’s pricing model is in trouble. Says the Deloitte report, “When institutions set their annual tuition prices, they often look at what they charged last year, the rate of inflation, and what their competitors are charging. Colleges and universities rarely look at what it costs them to offer their education, especially at the academic-program level and the net revenue they’re making on those programs that drive enrollment (or what they’re likely losing on low-demand programs). Without this comprehensive understanding of cost and net revenue, institutions could fail to grasp where strategic cuts can be made without damaging the academic core nor do they know where demand is shifting and how that intersects with what they’re good at or where they need to build institutional muscle by reallocating resources.”
Second, the business model has been driven to this point by affluent, middle class, well-prepared high school graduates whose parents attended college, but these students will not spur growth. There are big opportunities for institutions that can shift to a student-centric business model that enables them to serve the needs of a wider diversity of learners at varying stages of lives and careers.
Trend #4: Talent management becomes a strategy. According to the Deloitte report, the overall percentage of college and university employees looking for a new job is greater than the percentage of those likely to remain. Employees are looking for work/life balance, advancement opportunities and flexible schedules with options for hybrid and remote work. Institutions are balancing the goal of a vibrant, 24/7 campus community with retaining employees.
Trend #5: The magnitude of risks demands a new response paradigm. The current environment demands that schools become more agile and deliberate about connecting and integrating offices around campus to plan for, avert and manage the aftermath of a crisis.
Colleges and universities face many potential risks from campus shootings to natural disasters, and including cyberattack and campus protests. Schools need to plan for high-consequence or high-impact events with a high probability of occurring, such as hurricanes and cyberattacks. Risks must be managed campus-wide and focus on strategic and reputational risks that can affect an institution’s ability to meet its goals and carry out its missions. In order to prepare for and respond to crises depends on physical infrastructure and human resources and leadership. Yet, higher education is falling behind other entities in modernizing these resources.
“As the higher education sector emerges into its new era, there is a compelling need to break down intra-industry silos, finding the common ground among top research schools, small/mid-sized privates, regional publics, state systems, athletic conferences, religious affiliation, etc. Limiting the scope of our common efforts could minimize innovation and reduce our collective ability to truly change the declining perception of higher education in America and internationally,” sates the report.