Remarks at CUNY Financial Management Conference: The Future of Higher Education

January 29, 2013 | Speeches and Testimony

Universities are notoriously slow to change.  But today, perhaps more than ever, our glacier-like pace of change is going to imperil our future—and that of our students.  Funding shifts, advances in technology, and evolving student demographics and patterns are forcing academic institutions to rethink traditional approaches. 

It’s clear that the planning, data gathering, and analyses that colleges and universities do now will determine the quality and vitality of higher education over the next two to three decades.  As we have seen with initiatives like ASAP [Accelerated Progress in Associate Programs], significant progress can be made when we identify issues that need attention—and then develop ideas, interventions, and programs to address those needs.

Today, I want to talk about a few key areas that are critical to the future of CUNY and to higher education in general. 

Let me start with a fundamental area: if universities want to evolve, they must be responsive to students.  As competitive forces driven by pricing policies, educational offerings, and delivery channels become more challenging, universities need to listen for cues from potential students.  Successful businesses and industries watch consumer trends carefully and provide services and products that improve customers’ opportunities for the future.  As a result, profitability is enhanced, investment is made, and the business grows, operating with less cost while maintaining quality and encouraging innovation.  Unfortunately, universities react with a different set of clocks.

Just as we must listen to cues from students, we also must embrace change.  Universities need to be more nimble, adapting to shifting terrain more rapidly.  The reality is that change is already here.  (For example, nationwide, the most common degree is still the bachelor’s—but what’s second?  Certificates, which are now surpassing associate and master’s degrees.) 

That means that a sense of institutional urgency must be cultivated and become a motivating source for acting when competing ideas and innovation require we do so.  Universities generally don’t act with decisiveness, in part because they get tied up in established governance expectations, with entrenched interests only delaying new opportunities.  As Matt Miller wrote in the Washington Post a couple of years ago: “…we’re in a race between innovation and calcification—between the power of new ideas to lower costs and boost quality, and the power of entrenched interests to protect their habits…”.

Opportunity costs are high, and as such, unions, governance leaders, faculty, and administrators will have to join together on common ground—because higher education is undergoing radical shifts in almost every area.  Let me mention a few:

  • Our colleague George Mehaffy at AASCU has pointed to a couple of key trends.  Right now, the rate of tuition increases is unsustainable.  Between 1988 and 2008, the consumer price index (CPI) increased by 75 percent, while tuition for public four-year institutions rose by 325 percent.  Fortunately, this is not the case at CUNY.  Many students (although few, I’m happy to say, at CUNY) assume a level of debt that they will have difficulty retiring, in part by the limited hiring opportunities in government and some industries.
  • In addition, funding models may have to be rethought.  Institutions generally spend more on graduate education than on lower-division courses, which often provide more revenue.  But what happens if the MOOC model [massive open online courses] takes hold and lower-division courses are almost free?  And as increasing numbers of first-year students come to college less and less prepared and in need of greater intervention—as we see here at CUNY—universities must devote more resources to supporting student readiness.
  • Technology advances also provoke longstanding questions about our standard learning models.  What are students actually learning in college?  (Some, like Richard Arum, in his book Academically Adrift, would say that many are not learning much.)  Are students gaining the advanced skills they need through our current modes of instruction?  And how do we measure those learning gains?
  • Faculty are changing, too.  In 2009, part-time faculty comprised almost half of all faculty in 2009 in degree-granting institutions—the highest percentage since 1970.  However, the quality assurance measures that are in place for full-time faculty are not as robust for part-timers. 
  • There has also been radical shift in our student body.  They are much more mobile today.  More students are finishing their education at a college or university different from the one at which they started.  And more are part-time, adult learner, and dual enrollment students.  Universities must account for more frequent movement.  CUNY’s own initiative, Pathways, is one example of a general education/transfer system that encourages seamless transition with enhanced academic rigor and flexibility.  Institutions must account for student mobility while still providing the high-touch, co-curricular activities many students need.
  • Finally, these areas of change will affect one more key concept: shared governance.  What does “shared governance” mean in an era of financial and technological change?  It is clear that a substantial faculty role in the academic governance of the university is a sine qua non for academic freedom (even if it’s not a matter of constitutional right).  However, there will continue to be considerable disagreement as to the exact contours of that role.  So, where does the impetus for structural change originate?  How does an institution create necessary change in the absence of faculty unanimity and cohesion? Administrators may feel justifiably compelled to generate a framework for new innovations—whether a gen ed/transfer system, or alternative course models—in order to improve the educational experience and progress of students, while still remaining committed to the faculty prerogative to make decisions about the development of curricula.

Nowhere is the notion of challenge to the established norms of instruction more apparent than in the explosion of attention to MOOCs [massive open online courses] and other alternative delivery models.  Whether an online degree, a hybrid course, or a MOOC, new models of delivery have the potential to change traditional instruction, financing, facilities, and assessment models.

The largest MOOC providers have grown rapidly: Coursera was founded just a year ago and claims 1.7 million students.  EdX, the Harvard and MIT collaboration that offered its first class this past fall, reports 370,000 students.  Udacity estimates its number of students at more than 150,000.  As we know, drop-out rates for these courses are very high, often around 90%.  Much of Coursera’s interest is abroad.  Of its 1 million students, fewer than 40% are located in the United States.

The MOOC idea has caught fire over the last several weeks.  For example:

  • Just after Coursera announced a new, fee-based MOOC option, some universities (including Arizona State, the University of Cincinnati, and the University of Arkansas system) announced that they will convert an existing online course to a MOOC.  Their hope is that a free introductory course will induce students to pay to complete a degree program.
  • The University of Wisconsin just announced a “Flexible Option” program, a degree finishers’ program that is competency-based.  No classroom time is required.  Students will take online assessment tests and courses that will cost significantly less than tuition (starting this fall).
  • This month, San Jose State University announced a pilot project with Udacity to create three introductory mathematics classes. The courses will be free online, but students who want credit will be able to take them for just $150.  If the project is expanded, the university will keep 51 percent of any revenue and Udacity will keep 49 percent. 
  • And just a few weeks ago, I made a prediction that was just recounted, almost word for word, in Thomas Friedman’s column in the New York Times this Sunday.  Eventually, an institution may determine the curricula, governance, and pricing to offer an entire degree through the existing menu of MOOCs.  Students will pick and choose among professors from Stanford, MIT, Penn, and universities across the globe.  A credential with the imprimatur of leading scholars is a powerful incentive, one that may be hard to compete with.  But we are in the infancy of these developments, and more empirical research will be needed before we can answer basic questions about whether demand will result in a tectonic shift in the way we deliver content.

At the same time that technological change is under way, higher education is also facing greater demands for accountability.  Both government and private funders are increasingly requiring data-driven assessment and outcomes to evaluate existing programs and justify new advances.  Institutions must have the ability to gather and use data in more and more sophisticated ways in order to demonstrate student success, both in college and in the labor market.  External partners—whether families, government, employers, or funders—expect a high level of analysis and assessment to ensure value.

Higher education must also become much more active in cultivating strong partnerships with business/industry.  Universities need to seek advice and direction from companies whose employment needs can shape the direction of curricular innovation.  The new Cornell NYC Tech institution [winner of the NYC Applied Science initiative] is based in part on the idea that many ideas originate in the market, rather than in the university.  Its program is open only to master’s degree students studying applied sciences, with the goal of cultivating entrepreneurial technologies.  It is highly connected to business and industry.  For example, the physical campus is shared by both companies and classrooms, the curriculum includes solving technological challenges for companies, and faculty work on commercial projects.

Students and employers are increasingly interested in skills acquisition, rather than the branding of their baccalaureate alone.  The CUNY’s Jobs Task Force report made this clear.  The feedback from representatives in five major NYC industries (finance, health care, higher education, information technology, and media/advertising) emphasized at least three key points:

  • Universities must address the skills gap in the current generation of workers
  • CUNY must build stronger, more meaningful links with business and industry
  • Graduates must learn solid analytical and communication skills.

Finally, we must consider how we will finance higher education going forward.  Today, government support is declining, even as enrollment has increased, and the financial burden is increasingly placed on students, in the form of tuition and fees.  A recent Moody’s report suggests that revenue streams “will [probably] never flow as robustly as they did before 2008” and that universities will have to lower their cost structures by better utilizing technology, increasing operational efficiency, demonstrating value, reaching new markets, and prioritizing programs.  We must create new models for supporting higher education and maintaining access.  While this question goes to the very mission of public universities, it is a question for higher education in general, which is not educating enough low-income students.

Going forward, CUNY must be doggedly creative, looking at every idea to maximize revenue and keep costs manageable.  For example, Marc Shaw and Matt Sapienza are looking at the idea of enabling public universities to use revenue pledges—including philanthropic gifts, tuition revenue, fees, indirect cost recovery—in order to issue bonds that could be used to finance capital projects, particularly for research facilities.  These are the kind of ideas that will enable us to continue to advance, even as government is restrained. 

Whether it’s in financial models, instructional models, or governance models, higher education is changing quickly and dramatically.  Every institution must either innovate or calcify.  At CUNY, it will take the creative energy of each and every one of us in this room to embrace this time of change and ensure that the University will produce a new generation of graduates prepared to lead a new and very different 21st-century world. Thank you.