Home Cost of a Degree Is This the End of Traditional College as We Know It?
Is This the End of Traditional College as We Know It?

Is This the End of Traditional College as We Know It?

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Doug Belkin’s article in last week’s Wall Street Journal poses the big question: “Is this the end of college as we know it?”

Mr. Belkin opens his article with the education paths and career paths of a married couple living in Tampa, Florida. Dr. Rachel Wittern earned her Ph.D. in clinical psychology, accumulating $300,000 in debt along the way. She earns $94,000 a year as a psychologist and says her education wasn’t worth the cost.

Dr. Wittern’s husband worked in a warehouse for several years before becoming an apprentice electrician. He expects to earn an annual amount similar to his wife once completing the program, but without the debt.

Mr. Belkin writes that the traditional college student has to pay upfront for a lifetime’s worth of formal education and frequently borrows money to pay for it. The failure of the system to generate jobs that provide an ROI on the cost of the formal education is clearing the way for alternatives.

The alternatives that he refers to are faster and cheaper specialized credentials closely aligned with the labor market and updated incrementally over a longer period. The credentials being taught are not limited to traditional colleges and universities, with private industry beginning to play a larger role in the sector.

The shift from a dual college/vocational track to college only began in the mid-1960s, according to Mr. Belkin. As a result, the percentage of Americans with a four-year degree increased to 36 percent last year from 9 percent in 1965. He writes that this massive shift came at a price.

According to Mr. Belkin, for every high school student who graduates college and finds a job that leverages a degree, four fall short. For these students, they never enrolled in college, they dropped out of college, or they graduated college but wound up underemployed.

The shift in return on investment for graduates is now impacting colleges and universities. Mr. Belkin cites as an example the doubling of college enrollment to 18 million between 1979 and 2010. Since 2010, enrollment has fallen by two million, impacted by a declining number of high school graduates and a flattened return on investment for graduates.

Colleges and universities have reacted to this overall decline in enrollment by offering larger tuition discounts, in some cases edging them toward a financial disaster from which they cannot recover. The coronavirus pandemic has accelerated this trend.

Mr. Belkin writes that Americans are not turning their back on education; they’re just reconsidering how to obtain it. Enrollment in short-term credential classes during the pandemic increased by 70 percent to 8 million over the same time last year, according to the CEO of Credly. That increased enrollment was not enough to offset the 16 percent drop of traditional college freshman in the fall of 2020.

In addition, apprenticeships in the U.S. nearly doubled to 700,000 between 2012 and 2019 with California planning for 500,000 apprenticeships statewide by 2029. Tech companies like Apple, Google, Amazon, and Microsoft have launched programs to certify vocational competence and lead to well-paying jobs at their companies or others. Mr. Belkin mentions that Google’s six-month online certificate in data science will be treated as equivalent to a four-year degree if students apply for a position at Google.

The shift to more alternative credentials will create Americans who have attended a broader array of institutions. That shift will create pressure for public funding to follow the education that the student wants. Oren Cass, the Executive Director of American Compass, is quoted “College-for-all has been a catastrophically bad system” and argues that students should be able to apply federal and state aid to whatever type of education that they pursue.

The theme and content of Mr. Belkin’s article is not new. There are likely hundreds of articles and papers providing data indicating that the ROI of a college degree is not what it used to be, particularly when you break out students on either side of the mean. When President Obama called for an increase in the number of Americans with college degrees during one of his 2009 addresses, I wrote and posted a blog article expressing skepticism that the number of college graduates would increase unless the affordability of college increased.

It’s been more than a decade, and enrollments have decreased, not increased. Colleges are not more affordable, particularly state-funded public institutions whose funding has not recovered since the 2008 recession.

President-elect Biden and his education advisers should reconsider the massive funding requests coming from traditional higher education institutions, the “free college” programs. They should also evaluate the revamping of the federal financial aid system (something I also mentioned in my 2009 blog post) to include more of the “degree alternatives.”

Evidence supports the fact that not all jobs require a two- or four-year degree. Evidence also supports that not all degrees are alike in return on investment. For those lower-ROI degrees, tuition and fees need to decline until they reach a level of return. That’s one of the reasons that I support the concept of Gainful Employment regulations for all colleges.

Will the new administration evaluate the higher ed financial aid system as an artist reviews a blank canvas, or will it choose to repaint sections of a worn, old painting that is no longer relevant to its audience? Choosing the latter will not change the outcomes desired by so many.

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Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President and Chief Financial Officer in 2002. In July 2016, he retired as APUS president and continued as CEO of APEI. In September 2017, he was reappointed APUS president after the resignation of Dr. Karan Powell. In September 2019, Angela Selden was named CEO of APEI, succeeding Dr. Boston who will remain APUS president until his planned retirement in June 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. During his tenure, APUS grew to over 100,000 students, 200 degree and certificate programs, and approximately 90,000 alumni. In addition to his service as a board member of APUS and APEI, Dr. Boston is a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA), a member of the Board of Overseers of the University of Pennsylvania’s Graduate School of Education, a board member of the Presidents’ Forum, and a board member of Hondros College of Nursing and Fidelis, Inc. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus. Dr. Boston lives in Owings Mills, MD with his wife Sharon and their two daughters.

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