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Don’t Makes Cuts to Your Institution—Transform It Instead

Not known for being innovative, higher ed is at a turning point where it can transform its old models to accommodate the modern lifelong learner.

In a time of financial uncertainty, institutions are struggling to stay afloat, resulting in budget and even staff cuts in hopes they can survive. Making cuts isn’t the only answer—in fact, it might hurt the institution more than help it. This is a time when institutions have the opportunity to transform, which will not only keep their budgets intact but also put them in a better position for the future. In this interview, Melik Khoury discusses budget cuts, trends that have developed over the past year as a result of the pandemic, and shifts colleges and universities can make in their governance to create an environment that serves all learner demographics. 

The EvoLLLution (Evo): What challenges are institutions facing today that force them to make budget and, in some cases, staff cuts?

Melik Khoury (MK): This is an issue that has been going on for the last decade, and it’s just getting a lot of focus now. In 1965, the Higher Education Act came out as a way to provide education for all. And we based that on a model originally designed for only about 5% of the population. With the baby boomers, colleges started to sprout. 

As the demographic shifts have happened, as the world has changed, and as technology has come forward, what was considered innovative has become outdated. And education has never had to adapt before like it does now.

So, antiquated tradition and models have stopped us from adjusting to a changing demographic, one that needs different education methods and has different expectations. This year has only accelerated the inevitable and not really changed anything. It forced higher education to really think about what exactly higher education is versus what an experience is versus what its role in society is.

Evo: As you’ve observed some of the development over the past twelve months, what trends jumped out at you as being particularly accelerated? 

MK: In the past there’s been a real barrier for anyone to accept or even talk about the fact that an education can happen without a four-year residential model. For the longest time, 85% of the student population in this country did not fit that mold. They weren’t talked about, and most institutions treated them as an alternative group—non-traditional adults—rather than students. With COVID-19 removing the localized experience, it’s highlighting institutions, that over the last ten years, have invested in their local communities and differentiated audiences versus those just hoping to become the next Harvard.

A lot of institutions have misclassified technology, as if online is a different world instead of just a tool. There’s this idea that all the things that we needed in technology are somehow different online, instead of saying that the online space is a tool just like a classroom is a tool. We’ve been mischaracterizing a four-year residential program as the only legitimate education.

When this experiment in higher education started, most of students’ bills were paid through aid, and those who came from means didn’t need it. As that gap expanded, we’ve refrained from addressing it. So, you’ve got this perfect storm of issues—pandemic, funding, demographic, technology, tradition—all of a sudden coming into focus within the same year and within an industry stagnant in its evolution. Colleges that have evolved—Western Governors, Arizona State University, Southern New Hampshire, us—have always been looked down on as somehow not part of the inner circle, which isn’t right.

Evo: As you look at the demand for alternative credential formats, how do you see the supply of non-degree learning opportunities changing over the next twelve months? Are you concerned that schools are looking at these programs to buttress revenues potentially at the expense of quality?

MK: The schools looking at it that way are going to fail. It’s already happening. The same argument was made in the ’90s, when we started accepting transfer students. Some colleges didn’t even want transfer students. And we’re back to the same issue—the  perpetuation of another false narrative—you’re either educated or you are career-ready.

We need civic-minded and well-rounded human beings, who can think critically, communicate well, demonstrate cultural competence, have a clear understanding of the environment and its impact on society, and who are also ready for the workforce. The idea that it’s an either/or is part of the problem. It shouldn’t be one or the other; education is education. Our job is to figure out where industry, government, and society needs are and deliver multiple outlets with differentiated faculties, staff, tuition, calendars to serve the different needs. 

Evo: From your role as a senior administrator, what are the obstacles to executing that? 

MK: Some barriers would be tradition, hubris, and a lack of understanding that, in order to do something great, you have to have a mixture of competencies—both intellectual and practical. For years, I’ve seen institutions try to go from the four-year residential to, what we would call, alternative programs. We mix assumptions that everyone is good at everything. So, we take a college that already has a full workload and say, “Now, you have to add online.” Then everybody has to sit around the table and reach a consensus before we can make a decision.

We started to really get stuck on this idea of who gets to say no and who gets to say yes. So, at Unity, we looked at our four-year residential model and recognized that we’re good at it, so we should continue to do it. But we also recognized that we were going after a different audience, so those interested can jump at this opportunity, but we can’t have everyone play at the same time. Some people are overloaded. We also found that the support system, the pedagogy—just the very cadence to support the new audience—didn’t fit with the traditional mold. Asking those to meld meant compromise. 

So, we created the enterprise system, which is basically a matrix organization in which a few centralized functions oversee the entire institution and started to create separate arms that dealt with different audiences. Each had different faculty, different instructional designers, different subject matter experts. And we were able to support each and every audience differently without asking them all to compromise. As a result, we created a complex organization that has allowed us to serve adult students, place-bound students and residential students very differently.

When we initially created higher ed, we had that. It was called technical schools, community colleges, state schools, private schools, elite schools and the like. Over the last 25 years, all of that has become one big blur. So, the complex organization can be looked at from a macro perspective, and we really need to start to differentiate these institutions from one another. But institutions themselves have to be able to create differentiated pedagogical lines and trainings without having this idea that everybody has to agree before we can change.

Evo: How do we start to functionally change a university’s governance and operational model to allow for that kind of an environment? 

MK: The first thing you have to do is look at your governance structure. 

You have to start with understanding what kind of institution you are. Are you an endowed institution that is really a hedge fund, that gets to pick and choose who you want to come to your school? Are you a research institution, and as a result, getting some significant subsidies? Or, are you a revenue-generating institution? And if you, as an institution, can identify which of those three you are, then you run all of your governance, bylaws, and policies through that dominant lens. 

What you will realize is that most of us are designed as endowed institutions, so there isn’t room for innovation. Colleges aren’t in trouble because they don’t have good ideas—colleges are in trouble because they don’t have the mechanism to implement those ideas because the barriers are there to stop change, not influence it.

At Unity, we had to accept that we could not run like a subsidized institution. And that came with a lot of anger and loss because many folks go into higher ed so that they never have to deal with the realities of life. While we’ve been talking about access and affordability for 20 years, if you actually go deep down inside, we’ve been about exclusivity and privilege. 

Evo: As we look to the future of higher education and our post-secondary ecosystem, what’s your vision for where we’re going as an ecosystem?

MK: We need to look at the outcomes, competencies and skills that a human being needs in order to succeed in today’s world. We then need to figure out modality-agnostic ways to deliver those outcomes, so they’re not dependent on whether or not you’re residential, online or hybrid. We’ve got to look at synchronous, asynchronous, place-bound, and remote education. We’ve really got to break it down to what a student needs to know, how we teach it, how we measure it and how we prepare them.

We also have to really try to answer the question: does everybody have to have a residential experience, or can we meet people where they are? We then have to look at how we can use technology to lower costs instead of cutting them. How we can bring education to the communities, rather than taking it away from them?

We really must become location- and modality-agnostic, taking advantage of technology, underutilized resources, spaces, and the ecosystems that already exist and maximizing them.

Evo: What does it take to ensure that a particular investment is a better long-term strategy than an array of short-term cuts that address a short-term problem?

MK: I’ve always said that you cannot cut your way out of a problem. One of the reasons why many colleges are in trouble is because they’ve created a facade of success. They cut until there was nothing left. Ironically, those are most of the colleges that have gone out of business when not on probation. Cutting is what got us here instead of investing. 

It’s a basic understanding of value. Part of that is not higher education’s fault. When it started, it was heavily subsidized. And as subsidies waned, we found scapegoats. There was a lack of accountability, authority and responsibility. There was this notion that if you could just bring in more money and more students, this problem would go away. When things like this happen, because we don’t understand basic economics sometimes, or we want to run our schools like they’re in the Ivy League, or we want to run as if the resources are there—you start to cut across the board. There’s nothing worse than cutting across the board.

If you don’t really understand the return on investment, and any attempts to do so are considered attacks on credibility and rigor, you become afraid to make any changes. At that point, all you can do is wait until the market changes or your institution closes. COVID-19 has only exasperated the idea that all programs are created equal and a lack of financial literacy among institutions not heavily endowed or well-subsidized, are parts of the problem. 

Imagine that you own the best steakhouse in the world, and you’ve got the best chef to cook your food. But every time a party comes to eat, one or two people want a vegetarian meal, and the chef says, “I will not cook vegetarian. This is a steakhouse.” All of a sudden, you’re wondering why your business is in trouble, and you’re blaming the maître d and the waiters. That approach works well when you’re an institution that spends its endowment on choosing the perfect students for your school and teaching them in your way. I’m not knocking that. But for the rest of us, there is a way to cater to student demands—the working mother, the adult student, the student who wants a full-time job—and not hinder rigor. You just have to change the way you deliver education.

But when you try to have this conversation, it’s usually met with the response that you are cheapening education. But we’re not. You can deliver quality education differently—and that is the conversation we’ll be having over the next decade. We cannot continue to have a society that can’t afford to be educated or career-ready.


This interview was edited for length and clarity.

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