More than 40 years ago, I started working at Price Waterhouse (now PricewaterhouseCoopers, or PwC). Even though I was on the consulting track, I was encouraged to sit for the Certified Public Accountant (CPA) exam and become a licensed CPA. Having this license, along with an MBA, boosted my career and I subsequently served as CFO at five different companies over the years.
Matt Schifrin and Carter Coudriet of Forbes wrote an article about the financial ratings of private colleges, Dawn of the Dead: For Hundreds of the Nation’s Private Colleges, It’s Merge or Perish. The authors refer to Forbes’ analysis of the finances of 933 private, not-for-profit colleges with 500+ enrollments, stating that the majority of these institutions are in a precarious situation with their high tuition, tuition-dependent financial model, declining overall enrollments, and competitive landscape in higher education. It’s unsurprising that the wealthiest private colleges are doing well and in Forbes’ ratings, score a GPA of 4.5 and an A+ rating. However, the number of schools receiving a GPA of 1.5 or lower and a D has swelled from 110 in 2013 to 177 in 2019. Only 34 schools earned A+’s, with a total of 498 colleges earning C’s, an increase over 434 in 2013.
In addition to the previously cited contributing factors to the financial decline, there is excess capacity in higher education. According to Kevin Coyne of Emory University and Robert Witt of the University of Alabama System, there is a 6.4% excess capacity among public colleges, but a 12.4% excess among private institutions. Interestingly, the smallest privates have an overcapacity of 28%. As president of a very scalable, online institution, I believe that Coyne and Witt have not considered the vastly scalable operations of institutions with large online populations like APUS. Those considerations would certainly expand the overcapacity numbers immensely.
On November 20, 2019, the Department of Education released its long-awaited update to the College Scorecard, revealing median debt, earnings and other data for graduates of specific programs of the represented schools. The Wall Street Journal was given an exclusive look at the data before publication, and provides some comparisons of the data among schools and a handy tool for sorting the dataset by school, degree level and degree type to show the median debt for graduates and median income level the first year after graduating.
I commend the Department for providing more consumer transparency. As I have written previously, the Scorecard will only be relevant when it posts data on all students, not just students using Federal Student loans. And even then, there are reasons why some institutions have dramatically different data. In this update, the Department has published both graduate and undergraduate data, some of which is revealing. For example, the Journal writes that dentists graduating from New York University had a median debt of $387,660 but only earned $69,600 in their first year after graduation. Dr. Robert Kelchen, a professor at Seton Hall, reports that the highest earners were dentists graduating from Ohio State with a first-year salary of $231,200 and debt of $173,309. While there may be regional differences why NYU grads earn less than OSU grads one year after graduation, the difference in debt is likely due to one being private and the other public.
I am no fan of the Department of Education’s College Scorecard, primarily because it is incomplete and may be misleading for some metrics. Much of the data is derived from students using Federal Student Aid (FSA) only and some of it is from those who are first-time, full-time students using FSA loans. At APUS, most of our students are part-time, working adults not using FSA to fund their education. I first wrote about the Scorecard in 2016 and reported about others like me who criticized its incomplete data.
Despite the flaws of the Scorecard, I understand why Georgetown University’s Center on Education and the Workforce recently attempted to create a return on investment (ROI) for all colleges using this data. First, it’s the only published source that uses IRS data to match earnings with students who have attended those specific institutions and who received FSA. With access to earnings, institutional costs and debt incurred, the researchers can calculate a rudimentary ROI.
One of the frequently covered topics in higher education is the cost of college and specifically, the reduction in state funding for their public institutions. Less covered nationally is adequacy of the cost of K-12 education. In 2016, the Maryland governor and legislature jointly formed the Commission on Innovation & Excellence in Education, also known as the Kirwan Commission after its chair. The goal of the bipartisan Commission was to research successful school systems globally and make recommendations to make Maryland’s world-class. Governor Larry Hogan appointed two people to the commission, and the state senate president and house speaker appointed five persons each. There were an additional eight members appointed by the State Board of Education, Maryland State Education Association, Baltimore Teachers Union, Maryland Association of Boards of Education, Public School Superintendents Association of Maryland, Association of School Business Officials, Maryland PTA, and the Maryland Association of Counties.
The Commission issued two interim reports and one preliminary report before presenting its findings in October 2019, recommending that Maryland increase its annual spending on education by $3.8 billion to be phased in over the next decade. While a precise funding formula has yet to be negotiated between the state and counties, the Commission has recommended that it be split approximately 50/50 between the state’s portion and that covered by Baltimore City and 23 counties. On the surface, it’s hard to argue against recommendations such as requiring higher credentials for new teachers and increasing teacher pay, funding for pre-kindergarten, and funding for schools with many children living in poverty.
We operate in a turbulent higher education marketplace. Many forces are impacting the foundational pillars of higher education, from economic and demographic to social, cultural, and, especially, technological. Knowing how these forces will impact higher education helps leaders adjust, adapt, and plan for the future. This awareness can help an institution to survive or even flourish.
One established source for understanding trends has been the New Media Consortium’s (NMC) annual Horizon Report, which assesses short-, mid-, and long-term trends in the adoption of technology in higher education. The report also looks at the anticipated timeframe for the adoption and the challenges that might impede the adoption of that technology. Over the last 16 years, NMC has used the Delphi Method, engaging industry experts like consultant Bryan Alexander to develop, discuss, and forecast the likelihood and strength of these trends. I have used the report as homework for my academic leaders and it has been suggested reading for all university leadership for many years.
APUS showcased a variety of faculty research and innovation at the Policy Studies Organization’s recent 10th annual Dupont Summit in Washington, D.C. This year’s conference proved to be an excellent event for APUS faculty to showcase the advances in online higher education about which we are most passionate.
More than 40 years ago, my high school chemistry teacher authored high school and college chemistry textbooks. During the school year, he updated our assignments based on the next version thereof. As an undergraduate and master’s student, I had some professors who provided us with pre-publication draft papers to supplement course texts. For most of my classes, however, syllabi changes were infrequent and usually only modified for page or chapter changes in the latest version of the same text utilized for years.
New York isn’t the first state to offer tuition-free college, but it is the first to offer free tuition for a four-year degree. The Excelsior Scholarship program was proposed by Governor Cuomo in January and approved by the legislature last week.
An opinion piece by Jeff Selingo last week in the Washington Post criticized colleges giving preference to alumni children. Let’s start with the irony of that criticism*. If a non-elite, non-selective college gave preferential admission to a child of an alumnus, no one would object. After all, non-selective schools admit nearly everyone. While the Post didn’t reference “elite” in the headline, the colleges cited include UVA, Harvard, Yale, Stanford and Princeton, most of which accept 10% or fewer of their applicants.