By Daryl Auguste
Our higher education system is at the tail end of an ominous bubble. The United States has a whopping 3,026 four-year degree-granting universities, with another 1,700 two-year universities. Within the next few decades, a sizeable portion of these institutions will have shuttered their doors for the last time.
Much of it relates to the steady accumulation of debt throughout higher education. Like the housing bubble of 2011, colleges have been provoked into a borrowing frenzy by federal subsidies and tax benefits. Americans have run up $1 trillion in college loans, despite an inability to pay them off with the skills acquired through their respective institutions. Forbes Magazine reported that well-regarded institutions like New York’s New School owe over $440 million in tax exempt bonds, over twice their current endowment.
This money often goes towards construction aimed at bolstering institutional brandpower. Institutions will spend $10’s of millions on an “Olympic-Caliber” sports complex, despite a non-existent correlation between these projects and the ultimate quality of education at said institution. Simply put, institutions are spending money on items that may attract students during the admissions process, but fail to better position them for the outside world.
Innovation is also responsible for the higher ed industries inevitable crash. New, disruptive models of education are being created by organizations in a fashion that has dire implications for the higher ed business model.
Heavyweight institutions like MIT, Harvard, and Stanford all offer a number of college-level courses at no charge. Furthermore, students who pass these courses receive a certificate from their professors certifying their understanding of the subject.
These represent the tip of the iceberg. Educational companies fully dedicated to this non-collegiate form of higher education will ultimately break the monopoly these universities have on the accreditation process. Employers will start to look outside of traditional four year institutions for mid to high-level talent, diluting the value of those degrees. The biggest issues current online courses face are a lack of personalization and customization, something almost guaranteed to change with innovative new technology.
Perhaps the most damning sign for the future of traditional higher ed arises from the surprising lack of variation in net impacts on student growth from university to university. The best explanation of this phenomenon comes from New America’s Kevin Carey.
“The whole apparatus of selective college admissions is designed to deliberately confuse things that exist with things that don’t,” Carey said in an article for the New York Times. “Many of the most prestigious colleges are an order of magnitude wealthier and more selective than the typical university. These are the primary factors driving their annual rankings at or near the top of the U.S. News list of “best” colleges. The implication is that the differences in the quality of education they provide are of a similar size. There is no evidence to suggest that this is remotely true.”
In layman’s terms, a large number of college students spend exorbitant amounts of money on “prestigious institutions,” the majority of which show little to no difference in terms of the quality of education when compared with their less prestigious counterparts.
So where is Puget Sound positioned in relation to this bubble? From a fiscal position, fairly well. The 2014-2015 financial report shows an endowment of $321.7 million dollars and long term debt amounting to $76.4 million, a surplus of over $245 million. Puget Sound assets have gone up in value over 60% during the last decade, totalling $616 million.The greatest single contribution of the prior administration was the President’s business savvy, which all but assured Puget Sound’s continued financial stability into the future.
Still, Puget Sound’s curriculum is scant in regards to burgeoning industries like digital media. The school’s digital media lab stays largely uninhabited, and the photo / video equipment available to rent is threadbare and outdated. This has remained largely unchanged in the years since I’ve been here. Re-directing funds aimed at improving admissions / selectivity ratios to supplement these increasingly valuable disciplines would affirm UPS’s commitment to a quality education over more superficial appeals to status.
Having said all this, I feel compelled to mention that Puget Sound does have significant educational strengths. The quality and the intimacy of the instruction students receive is top-notch. The average Puget Sound professor has a genuine passion for classroom instruction. The ability to connect with professors outside of class provides students with opportunities many of their collegiate peers are denied.
If Puget Sound wishes to thrive while may of its higher ed counterparts go under, it must embrace an educational model that emphasises student growth and post-collegiate success over superficial increases in status due to admissions and selectivity.