Higher Ed Shakeout Coming

[Winston Smith]

One third of colleges and universities are "in real financial trouble." The Gold Standard is looking more like the Pyrite Standard every day.

September 3, 2013

Higher education is headed for a shakeout, analysts warn
By Jon Marcus

Facing skeptical customers, declining enrollment, an antiquated financial model that is hemorrhaging money, and new kinds of low-cost competition, some U.S. universities and colleges may be going the way of the music and journalism industries.

Their predicament has become so bad that financial analysts, regulators and bond-rating agencies are beginning to warn that many colleges and universities could close.

“A growing percentage of our colleges and universities are in real financial trouble,” the financial consulting firm Bain & Company concluded in a report—one-third of them, to be exact, according to Bain, which found that these institutions’ operating costs are rising faster than revenues and investment returns can cover them.

That’s because, as enrollments decline and families become more sensitive to price, colleges are cutting deeply into their revenue by giving discounts to attract students. The result is that, even though their sticker prices seem to be ballooning faster than the inflation rate, many of these schools are falling further and further behind.

“As the price keeps going up, within 10 years our price tag will be over $75,000,” said Julie Richardson, dean of admissions at Hampshire College in Amherst, Massachusetts. “That’s a number that begins to concern a lot of people.”

So does Hampshire’s discount rate—the proportion of its tuition revenue that goes back out the door in the form of financial aid—which Richardson said is 46 percent.

More than 150 colleges and universities got failing scores on an annual test of their financial stability by the U.S. Department of Education in results, released this year, that date from 2011. Several have closed, including Saint Paul’s College in Virginia, Lon Morris College in Texas, Atlantic Union College in Massachusetts, Chester College in New Hampshire, and for-profit Chancellor University in Ohio. A few are in bankruptcy.

This trend has been little noticed outside of higher education. And inside higher education, some critics contend, colleges are not reacting to it quickly enough.

“Change is needed, and it’s needed now,” the Bain report said. “Still, at the majority of institutions, the pace of change is slower than it needs to be. Plenty of hurdles exist, including the belief that things will return to the way they were. Note: They won’t.”

Robert Zemsky, chairman of the Learning Alliance for Higher Education and the author of a new book proposing educational reforms called Checklist for Change, said academic faculty are part of the problem. He said many hope things will just get better.

“The faculty aren’t convinced that change is necessary,” said Zemsky, who also teaches at Penn’s Graduate School of Education. “We faculty—and it is we faculty—are encamped north of Armageddon. We can sort of look over the horizon and see the chaos.

We’re on the sideline. And that’s terrible that the faculty, writ large, are on the sideline.”

Another dilemma is that the small colleges in the most trouble—the Saint Paul’ses, Lon Morrises and Atlantic Unions—don’t have the clout to reform the system.

“You have a problem, because the top of the industry is doing just fine, thank you,” Zemsky said. “And historically it’s the top of the industry that has led change. So the real question is, how do you get the top of the industry fully engaged in this? And you can’t say, well, you’re going to go out of business. Because, you know, I’m at the University of Pennsylvania. Let me tell you, the one thing I don’t worry about is, Penn isn’t going out of business. Don’t frighten me with that one. That’s not going to work.”

Meanwhile, though the likes of the University of Pennsylvania are also seeing plenty of applicants, college enrollment overall is dropping. It fell 1.8 percent last fall and another 2.3 percent in the spring, according to the National Student Clearinghouse. More than 300 campuses reported that they still had space in their freshman class or for transfer students as recently as July—two months after the close of the admissions season. Private colleges and universities are particularly vulnerable. The bond-rating company Moody’s reports that more than 40 percent of them are experiencing enrollment declines.

One institution, Hope College in Michigan, now pays for half the cost of a plane ticket, up to $300, plus transportation from the airport, housing, and meals for prospective applicants who live outside of driving distance just to come and visit.

But most colleges and universities are responding not with airfare, but with deeper and deeper discounts on tuition, which are cutting into their bottom lines. The national average discount rate has swelled to 45 percent, up from 37 percent in 2000, according to the National Association of College and University Business Officers.

This means that, even though tuition has been skyrocketing, families are actually spending 13 percent less on college than they did in 2009, the student-loan company Sallie Mae reports. This may be good news for students and their parents, but, for colleges, the trend is unsustainable, according to the Council of Independent Colleges.

“The old way of doing business is not going to sustain itself into the future,” said Zemsky. “You need somebody who stands up and says, ‘We can do better. Let’s get started.’ Absent that, we’re in for some really unpleasant times in higher education.”

[bigfoot]

"pyrite standard" ...lmao winston!

[jamesc1]

The cost and the time required for degrees is becoming so much of a burden that many just say NO to higher education. That's why it was and is important to give people the option of state sanctioned colleges. They weren't for everyone, BUT, they met the needs of many, especially adults long out of school.

When you squeeze out the competition you always make things costly and less adaptive to the requirements of many people.

It should always have been up to the people to choose between DETC/Regional/and state authorized schools. People vote with their money. If one form of education wins out so be it, but not the way this crap worked out, with people having a financial or ego interest trying to fix the outcome. They did, it worked out, and we have very high costs and little choice. Just how many older people want to spend 4-6 years to get a B.S. degree ONLINE. That's not DL that's the same as sitting in a class room for 6 years. Who does this remove from DL???? almost all older people. That's what the old model, as Bear defined it, yes, for once he got it right, was about. Many seniors will epend 5 to 10K and 6 to 12 months earning a base level/legal/moderately usable, degree program. They will not spend 30k and 6 years to earn a degree that is, in many cases, for self satisfaction/pride. A very good reason, in my view, to get any degree.

But we now have the gold-fish standard, and like this fish part, it often smells in 3 days of sun, and the damn things costs like the devil.

Oh well, I guess they won, but look at all the money the old folks would have paid for decent state approved degrees. Maybe, just maybe old man Bear might have got some of them bucks if he could have kept his damned mouth shut!!!!!!! Maybe the old crook just talked himself out of a lot of money. He should have remained a voice of moderation and reason, even if he was faking every word.

[Martin Eisenstadt]

Colleges and Universities Have Lost Sight of Their Fundamental Purpose
Written on Wednesday, September 18, 2013 by David L. Goetsch

A useful exercise for the leaders of any kind of organization is to periodically get away from the day-to-day pressures of their jobs for the purpose of gaining perspective. I often recommend that corporate CEOs arrange an off-site meeting for their leadership teams once a year with no cell phones, email, or other types of electronic devices allowed. The format of the off-site meeting I recommend is informal and has only one agenda item. That item is an open discussion centered on just three questions: 1) What is the purpose of our organization? 2) Are we fulfilling our purpose? and 3) What factors, if any, are distracting us from fulfilling our purpose? My rationale for recommending this exercise is an immutable law of organizational behavior: Organizations that lose sight of their purpose—their very reason for being—eventually flounder and fail. This is precisely what is happening in higher education today. Colleges and universities have lost sight of their fundamental purpose.

The fact that colleges and universities in America have lost sight of their fundamental purpose is making them: 1) irrelevant, 2) more expensive than they are worth, and 3) open to legitimate criticism from the taxpayers who support them. In all my years of working in higher education and the private sector—48 plus and counting—I have never known any kind of organization that needed to step back and gain a better perspective on its fundamental purpose than our nation’s colleges and universities.

College and university presidents all across America need to organize off-site meetings with their leadership teams like the one described at the beginning of this column. During this off-site meeting they need to openly and honestly answer the three questions posed earlier. If they are honest with themselves and each other—I know this is a stretch–they will not like the answers to these questions. In the reminder of this column, I assess the state of affairs in higher education according to these three fundamental questions.

The first question is: What is the purpose of our organization? In our book, Liberal Tyranny in Higher Education, my co-author Archie Jones and I quote David Horowitz concerning the purpose of higher education: “The central purposes…are the pursuit of truth, the discovery of new knowledge through scholarship and research, the study and reasoned criticism of intellectual and cultural traditions, the teaching and general development of students to help them become creative individuals and productive citizens of a pluralistic democracy, and the transmission of knowledge and learning to a society at large. Free inquiry and free speech within the academic community are indispensable to the achievement of these goals.” The last line in this quote summarizes where universities have strayed. Free inquiry and free speech have been replaced by indoctrination, thought control, and the suppression of opinions that do not comport with liberal orthodoxy. Therefore, from the perspective of purpose, colleges and universities have gone off the tracks.

The second question is: Are we fulfilling our purpose? Are universities promoting, encouraging, and protecting the pursuit of truth, the discovery of new knowledge, and the use of reasoned criticism? Are free speech and free inquiry being promoted, encouraged, and protected in our nation’s colleges and universities? The answer to both of these questions is the same: no. Indoctrination, thought control, and the suppression of opinions that do not comport with liberal orthodoxy are collectively the antithesis of the purpose of higher education. When there is only one side of a debate allowed, the pursuit of truth goes out the window. When certain topics are ruled off limits, the discovery of knew knowledge is impossible. When indoctrination is the norm, reasoned criticism cannot be allowed. Too many of our nation’s colleges and universities could be more accurately called “re-education camps” in the mold of the communist world than educational institutions.

The third question is: What factors are detracting us from fulfilling our purpose? It is hard for me to imagine college and university administrators honestly answering this question. However, if they were willing to be honest with themselves, here are a few of the factors they would identify: 1) Allowing left wing thinkers to take control of every aspect of the institution rather than ensuring a balanced faculty that represents a broad spectrum of opinions and philosophies; 2) Allowing faculty members to use their power over students to coerce them into accepting liberal orthodoxy rather than thinking critically and independently; 3) Allowing faculty to view their jobs as leftwing indoctrination rather than teaching students how to think, reason, and apply logic; 4) Using the institution for social engineering rather than education; 5) Promoting the myth that everyone should go to college rather than treating a college education as a privilege for high-performing students who earn their seats at the table; 6) Exploiting federal financial aid to continually raise prices and increase the overall cost of a college education; 7) Inventing nonsense degrees to compensate for the fact that many of the people entering college do not belong there and never will; 8) Allowing intercollegiate athletics to become the tail that wags the dog (see Number 7); 9) Promoting a college education as a social imperative—a box that must be checked to be considered socially acceptable—rather than a way to prepare for a productive career and life; and 10) Allowing colleges and universities to become too dependent on federal dollars that come with strings attached, strings that require the institution to accept and help advance a political agenda that is not necessarily good for students, the institution, or the country.

Organizations that lose sight of their fundamental purpose eventually fail. This applies to colleges and universities in the same way it applies to corporations, sports teams, and military units. Colleges and universities, by losing sight of their fundamental purpose, are quickly making themselves high cost, irrelevant institutions at odds with the very society they were established to improve. This is a formula for failure.

[bigfoot]

The cost and the time required for degrees is becoming so much of a burden that many just say NO to higher education. That's why it was and is important to give people the option of state sanctioned colleges. They weren't for everyone, BUT, they met the needs of many, especially adults long out of school.

When you squeeze out the competition you always make things costly and less adaptive to the requirements of many people.

It should always have been up to the people to choose between DETC/Regional/and state authorized schools. People vote with their money. If one form of education wins out so be it, but not the way this crap worked out, with people having a financial or ego interest trying to fix the outcome. They did, it worked out, and we have very high costs and little choice. Just how many older people want to spend 4-6 years to get a B.S. degree ONLINE. That's not DL that's the same as sitting in a class room for 6 years. Who does this remove from DL???? almost all older people. That's what the old model, as Bear defined it, yes, for once he got it right, was about. Many seniors will epend 5 to 10K and 6 to 12 months earning a base level/legal/moderately usable, degree program. They will not spend 30k and 6 years to earn a degree that is, in many cases, for self satisfaction/pride. A very good reason, in my view, to get any degree.

But we now have the gold-fish standard, and like this fish part, it often smells in 3 days of sun, and the damn things costs like the devil.

Oh well, I guess they won, but look at all the money the old folks would have paid for decent state approved degrees. Maybe, just maybe old man Bear might have got some of them bucks if he could have kept his damned mouth shut!!!!!!! Maybe the old crook just talked himself out of a lot of money. He should have remained a voice of moderation and reason, even if he was faking every word.

---

yep...that is really it in a nutshell james...bear hacked on these school's for one reason only...maybe two, but it stems from the same source..."JEALOUSY", pure and simple...if he couldn't make a bundle off these school's through co-ownership, or consulting, and steer it his way...he figured he would spitefully trash ALL state approved schools...these legal, valid schools, went from sound, alternative educational pursuits, to quackery and flim-flam overnight! Bear endorsed and championed PWU, CPU,Cal Coast and an assortment of other's...in fact, he had association's with these school's and the men who owned and operated them...Dr. Henteleff told me that "if Bear likes you he will say nice things about you in his books"...words to that effect...the implication was that if you were on "the out's" with Bear, he would trash you, just because he felt like it! For years he would detract Dr. Forte of PWU fame, an outstanding businessman and entrepeneur...by blithely stating how Dr. Forte opened the first topless bar in the city limits of San Fran...WHO CARES!...Bear is a "miserable old cocker". and the sycophant's he runs with are equally as pathetic...maybe moreso

[Virtual Bison]

The accreditation mafia is reaping what it had sown. They want to make access to higher education a privilige restricted to an elite and this is what they get.

[Armando Ramos]

“You need somebody who stands up and says, ‘We can do better. Let’s get started.’ Absent that, we’re in for some really unpleasant times in higher education.”

And when they do stand up they get called a diploma mill and sent to jail on trumped up charges. Anyone who dares compete with the wealthy higher ed cartel better have a warchest for lawyers and politicians.