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The Higher Education Bubble in the United States

Expert Witness: MJ Dennis Consulting
Author makes the case for why higher education in the United States is not inelastic and why enrollments in the future face significant, and different, challenges from those in the past.

Some higher education administrators in the United States are still in denial that the higher education landscape has changed and what worked in the past will no longer be sufficient to meet the needs of future generations of students.

Increasing costs, stagnant revenues, market shifts, changing demographics, technology, increased international competition
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for students, and a decline in the public trust in the “value” of a college degree, have forever changed the educational landscape in the U.S.

Several colleges and universities with low enrollment, negligible endowment and revolving presidential doors, may be forced to close or merge with other schools.

Other schools may attempt to move forward with new educational alliances, both national and international. And they may try to get creative and instead of slashing budgets, look for creative ways to balance budgets, like sharing costs with nearby schools, even competitors.

Demand for higher education is not inelastic. New sources of revenue are unlikely to come from federal or state sources. Technology has already changed the way digital “natives” will learn in the future even as the debate rages about the value of a lecture in a classroom and one delivered remotely. Nearly one-third of all college and university students in the U.S. enroll in one or more courses online. Last year the American Council on Education approved awarding credits for four MOOC courses. Is hybrid delivery of knowledge such a bad idea?
The average tuition in the U.S. is about 38% of a median family’s earnings; this clearly represents a disconnection between what many families can afford and what many schools charge.

But year after year the cycle of rising tuition costs is matched by increased discount rates and less net tuition for many schools.

There are more students enrolled in higher education in the U.S. than ever before. But the new college students aren’t unpacking for their new residence hall or pledging for a sorority or fraternity. The “new” college student in the U.S. is over the age of 24 and never heard of a “view book.” They want to get to class, and enroll in courses that will help them to get a job after graduation.

There is an estimated 4 million Americans with at least two years of college. They represent one of the largest cohorts of potential students. How many strategic enrollment plans include specific marketing and recruitment activities for adult learners?

Last year more Latino Americans enrolled in U.S. colleges and universities than white students? According to the U.S. Census Bureau 2010 census, by 2018 the majority of students under the age of 18 will be minority. That means in a few short years enrollment managers will be faced with revising current strategic enrollment plans to accommodate the new “majority.”

Academic and administrative discussions are taking place all across the country to re-structure the academic year, change semester lengths, and move away from seat- time as the prevailing model for earning credits. Last year the Department of Education gave the “green light” to two schools to award credits and federal financial aid to students who successfully pass an examination based on prior knowledge and experience.

Academics and administrators who dismissed the relevance of MOOCs should be prepared for the “disruption” competency-based degrees will bring to the academy.


ABOUT THE AUTHOR: Marguerite J. Dennis
Marguerite J. Dennis is a national and international exert on college recruitment, admission, financing and graduation. She has written six books on higher education ,two books on trends in international education and more than 200 articles on higher education in the United States. She has served as a consultant to colleges and universities in Asia, Europe, and the United States and is a member of the Board of Trustees of Regent's University London and is a member of the Advisory Board for the Observatory on Borderless Education.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.For specific technical or legal advice on the information provided and related topics, please contact the author.

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