Published on 2013/03/22

Looking at College Funding Models in 50 Years’ Time

Looking at College Funding Models in 50 Years’ Time
Just as institutions have evolved in the past to suit the market’s demands, colleges and universities will continue to adapt themselves to meet societal needs. It will be critical for many institutions to change their funding models to be able to continue offering required services.

The terms “college,” “university,” “higher education” and “tertiary education” are used almost synonymously these days. While what we think of as “postsecondary” education most likely had its start in Bologna, Italy — nearly 1,000 years ago — its breadth, depth and architecture have evolved in fits, starts and jumps over time. Major developments have taken place in the past 250 years and, in just the past 125 years, we have witnessed dramatic changes.

How Did We Get Here?

In the United States, the Oxbridge model of “college” intended for undergraduate teaching was in many cases coupled with the German model of the research institute. Public policy used the capacities of higher education to foster initiatives in population dispersal, scientific agriculture and mechanic arts, veterans’ readjustment from military service, and national defense, each with multiple unanticipated but beneficial consequences.

During the 20th century, new forms of institutions were created and the percentage of high school graduates continuing their formal education increased from about four percent to nearly 70 percent.  Formerly religiously-affiliated colleges became secular and the percentages of students in independently governed colleges and publicly -supported colleges switched over the last 50-plus years: from 80-20 to 20-80.

Two-year colleges were started and three-year, hospital-based nursing programs flourished and then declined in number.

In addition to private colleges of liberal arts and sciences, some institutions added graduate and professional programs in extension units separated from the central college of arts and sciences.  Some became major research institutions.

Early land-grant universities became large, nationally-recognized public research entities with undergraduate colleges, and former teacher education schools became colleges, and then developed into regional universities.

The funding of institutions and the financing of student enrollment changed over time, taking various forms:  government grants and loans, endowment income and tuition discounts, church and community scholarships and more.

In recent years, for-profit “colleges” have grown dramatically, taking shape over time from privately-owned, skills-based trade schools advertised on matchbook covers to regionally-accredited, publicly-traded stock companies with more than 100,000 students.

The forces of change were the need for particular professions, such as the clergy, medical doctors, lawyers and engineers; federal and state needs for expertise and economic development; immigrant and religious groups’ desire for upward mobility; and entrepreneurs seeing an opportunity to fill a niche.  In other words, the forces of demographics, economics, technology and politics all played a role in influencing the shape of higher education’s development.

These same forces that influenced the creation of new institutions, new types of institutions and online courses and programs, and helped increase opportunities for a larger part of the population to participate in higher learning beyond high school, are at work today and continue to be major influences for change.

Looking to the Future

In the coming decades, expect increased political and public demands for accountability, especially relating to student learning and improved graduation rates, which are likely to affect the governance of institutions and grant more authority to trustees who must understand the delicate balance between governance and management.

In the public sector, this is likely to mean greater centralization of authority and increased governing control of the numerous regional two-year and four-year campuses, as exists in New York.

Such centralization is not likely to make the goal of increased college participation and success any easier. Whereas early 20th-century institutional expansion and enrollment growth accompanied increased immigration from Western European countries, which were host to the university models adopted by the United States, some current immigration patterns are different in terms of the laws governing immigration, cultural priorities for education, the need for learning English as a Second Language and the level of native language literacy.

A trend toward consolidation of institutions is likely to be accompanied by a streamlining of the number of institutions with a mission for research, and a concomitant focus on teaching and student attainment.  The nation needs a robust research agenda — and big questions in science and technology require institutions of sufficient size, not numerous, inadequately-funded research departments.

The increasing use of technology for information management in teaching, research and administration may lead to an increased attention to efficiencies as well as effectiveness in campus and neighboring libraries as well as increased access to instruction. Again, consolidation for improved and more cost-effective services could result. Just think of the numerous campus and community libraries in big cities which may have inter-library loan programs but not much else to combat redundancies in collections and services.

Every institution will have to develop an online strategy, whether it is only to establish criteria for accepting credits earned from online courses; or to provide courses in a “blended” format; or to provide online courses and programs of its own to alumni (who represent a natural affinity group); or to be a partner with an organization or other university to offer online programs beyond the usual reach of the sponsoring institution. In any case, the online strategy will affect institutional policies and facilities planning regarding the use of space.

These days, there is much talk about Massive Open Online Courses (MOOCs) offered for free to tens of thousands of students by prestigious institutions. The financial model will have to change, but even when it does, this “sage on the stage” approach will not totally replace the “guide on the side” most students need.

To discuss the future of higher education is not to ignore the shape and status of K-12 schooling. In fact, some of the forces for change in post-secondary education will result from changes in the youth population. One change, of course, is in terms of demographics and related cultural values toward further education. Another is in terms of the wealth of families. The long-term effects of the housing “crisis” and the loss of equity in homes — a major source of wealth for many Americans — as well as the results of tax policies, will likely reduce disposable income and push the trend for vocational and professional undergraduate degrees and certifications.

Another change is in the relationship of young people to technology. Just as the changes in communications demonstrated by the evolution of television from a source of information and entertainment offered by three companies to the current situation, in which it is an interactive electronic tool for content provided by hundreds of sources in addition to those downloaded from the internet, so too has technology changed the role of student from being primarily a consumer to being a content producer as well.

This change, as well as the imperative to adopt more interdisciplinary approaches to courses and programs — as we do in solving problems — has dramatic implications for high school and undergraduate curricula and the preparation of teachers and professors. It also has great implications for lifelong learning and the ongoing relationship of a student to a source of authoritative information.

There are other changes to be considered. It is entirely possible intercollegiate athletics will be separated from the campus, with some teams joining with community leagues and others forming a partnership with professional leagues. There are several reasons for these possible changes, including distraction from the institution’s primary mission, both operating and capital costs, and, for big-time college teams, a threat to tax status due to big television contracts and the sale of sky-boxes on the one hand and the theoretical conflict with the sale of tax-exempt bonds on the other.

The many forms of postsecondary education, whether privately or publicly funded, will evolve in order to meet societal needs, as well as individual student needs to be prepared for an evolving innovation economy. An urgent concern for me is for high school and undergraduate curricula to focus as much on character development and the responsibilities of citizenship as on student preparation for careers and commerce. Our civilization depends on it — even 50 years out.

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Readers Comments

Zandra Thomas 2013/03/22 at 11:11 am

Scott brings up a good example of the need to introduce efficiencies in an area such as library services. Higher education institutions of the future will need to seek out partnerships to reduce redundancies and maximize their dwindling resources by consolidating them for certain projects, such as library services. This is an excellent article in terms of encouraging “outside the box” thinking on the key issues facing higher education institutions in 50 years’ time.

Stephen Gotti 2013/03/22 at 8:46 pm

I find it interesting that Scott discusses removing intercollegiate athletics from institutions while discussing how important it is for institutions to teach character development. While I agree with Scott that the emphasis on athletics has perhaps caused some institutions to focus less on their primary missions of teaching and research, I can see the value of athletics for campus life and the social development of which Scott speaks.

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