Higher Ed is Coming Apart at the Seams – Or Not

By Julia Weede, Senior Vice President, Education, Dallas

The hyper-saturated media world of economic, political and technological news is proving to be a dangerous place for traditional ideas about education this fall.  The 2012-13 school year finds schools and educators facing changes at a speed perhaps never seen before.

Education analysts, commentators and media have echoed several “memes” in the global dialog on education this year. But like all fast-spreading words of common wisdom, the details often get left behind, and it is the details that tell the tale.

Here’s a closer look at four themes we have seen over the last several months:

1. Online classes spell the end of traditional universities.
The Details: Well, yes and no. The reality is a bit more complex. Online college students are, for now, still very different from traditional students. According to a 2012 study by Aslanian Market Research, the average online student in the U.S is 33, female and Caucasian. She has almost two years of college credit, and had to leave school because life got in the way. She has a job and wants a promotion or is worried about the economy. Her online program is from a school within 100 miles of her home. She would prefer to go to classes on campus, but just wants to complete her degree, so she is fitting the program to her reality.

Two-thirds of all online students are currently pursuing degrees from a traditional, non-profit college or university. The next five years will see more traditional universities building out their online offerings. So will traditional universities change? Absolutely. Will they disappear? Most will not – at least not those who can see the value of working with students across a spectrum of their lives and needs for learning.

2. The fact that college costs are rising shows that schools are insensitive to the needs of families.
The Details: The little-understood fact of college costs is that university scholarships are a primary driver of increased costs. Why? Institutional scholarships are simply a discount in tuition. So in order to offer big scholarships, most schools end up increasing tuition.

So why not just cut out scholarships and drastically lower tuition? Most college enrollment people will tell you this would be institutional suicide. Here’s why. Answer honestly: If it was your child and you had a choice between a $40,000 per year education with $15,000 in scholarships, or a $25,000 per year education with no scholarships, which would you choose?

It could be argued that as consumers we get the college pricing system we want. Even in higher education – or maybe especially in higher education – most families equate cost with quality and scholarships with sheer merit. 

3. Liberal arts degrees are a waste of money.
The Details:  A January 2012 study found that college graduates with skills traditionally related to broad liberal arts degrees – critical thinking, analytical reasoning and solid writing skills – were three times less likely to be unemployed than those who didn’t have these skills. This Social Science Research Council data is notable in an economic climate where higher education has been commoditized into a 1:1 investment-vs.-first-job-offer equation.

U.S. Dept. of Labor statistics now show that most college graduates will have 16 jobs over three distinctly different careers; many of these jobs haven’t been created yet. Which job does a student prepare for? There are many paths to success for college graduates, and with the focus on core reasoning, communication and analytical skills, the liberal arts continues to be one of them.

4. Student Debt is Crippling a Generation Burdened by Six-Figure Student Loan Amounts
The Details:  Student loan debt is a serious issue, especially in an economic cycle where graduates face fewer job prospects. Casual observers of recent news might be forgiven for assuming that the average college student is graduating with a calamitous amount of student debt.

But a recent study from FinAid.org shows that only 1.5 percent of all college students graduated with $100,000 or more in student debt. About 90 percent of them had been students in graduate or professional programs.

According to a 2012 College Board study on student debt in 2009-10, there has been a rapid rise in the amount of overall student debt being incurred each year. But as NPR reports, “it turns out that the rise in total student debt is not primarily the result of each student borrowing more money. It’s the result of more students going to college.”

In reality, the average bachelor’s degree debt for grads from public universities was $12,300 in 2009-10. Private school grads took on a total average of $18,300 in student loans.  Even the priciest private schools see total student loan averages equivalent to that of an average car loan – and one could argue that the depreciation is not nearly as steep.