We sat down with Jeff Cohen, a Managing Director at FSG and leader of the firm’s Education and Youth practice. Jeff has extensive experience working with Higher Ed institutions; and we picked his brain on the institutional perspective and where there’s room for innovations.
What has your experience been working with higher education institutions?
1. Working with higher education institutions can be tricky for a few reasons:
▪The nature of decision making and governance is quite decentralized. The faculty has a lot of power and universities are theoretically run by faculty. There are a lot of people who can veto things and consequently it can take a bit longer to get things done. There are many independent nodes of power within the university so getting to decisions often means you have to spend more time getting buy in and engaging people.
▪Universities have a lot of demands on them and many constituencies asking for things so for a project to grab their attention there has to be strong alignment with their values and interests.
2. There are over 4,000 higher education institutions within the U.S and within that there is a spectrum which can be broadly divided into public and private institutons:
▪The vast majority of undergraduates in the US (about 80%) attend public institutions, which include:
▪Community Colleges, which have historically been two-year institutions that offer open access.
▪Regional four-year universities: these are both teaching and research institutions, but tend to draw student from their immediate region (an example would be the institutions in the California State University system).
▪Research Universities/Flagships: These are more research-focused and have significant graduate programs. They may have more grad students than undergrads (the University of California system, particularly UC Berkeley and UCLA are examples).
▪Private nonprofit institutions include:
▪Four-year Liberal Arts Colleges (e.g., Amherst, Williams)
▪Private Research Universities, such as Harvard or Stanford
▪Private for-profit institutions have been a rapidly growing, but controversial, type of institution. Recent tightening of oversight on these institutions may slow their growth, but, from an innovation standpoint, they are interesting because they are filling a need for more flexible models of delivery.
3. Digital courseware runs across all institution types, I would classify it as a distribution channel any institution may use.
What are the main costs for higher education institutions?
There are a few main buckets:
Instruction, research, student services, institutional support, and plant operation and maintenance. The Delta Cost Project has shown that institutional support (general administration, executive management, etc.) has been increasing most over the past 10 - 20 years. Universities are being expected by students, parents and governments to do more. There’s more compliance activity, more provision of student services including health and mental health, more support for athletics, and more resources spent on student life in general. There is also a tendency of administration to grow, but this isn’t necessarily the biggest driver in increasing costs.
We’ve hear a lot about regulation costs driving up tuition, is that true?
Regulation and compliance costs have been increasing greatly. In general, we’re a litigious society and on college campuses there are thousands of 18-25 year olds thrown together with no parents. Trying to keep college a completely safe environment, as people understandably want, as well as keep up with various government, athletic and accreditation compliance demands is really expensive. We know what 18-25 year olds get up to and managing that drives up costs. Universities don’t really have authority to police and regulate, but there’s an increasing expectation that universities will be on top of alcohol and drug violations.
There has been a lot of talk about athletics programs driving up costs. What are your thoughts?
Athletics cuts very differently according to the different types of institutions. It’s hard to say whether it’s always a cost and whether this cost is always borne by students. In the big public flagships, academics can compete with athletics for attention and that brings up questions. I can’t really say much more as I’m not that familiar with the ins and outs of the university athletics programs.
Where do you see room for innovation in higher education costs?
1. Within facilities:
▪To what extent can you offer classes that do not require students to be in the classroom? You’d never want to get rid of the physical campus, but how can you expand capacity without more building?
▪To what extent can universities have professors go out into the community and use unused commercial space?
2. Community colleges are leaders in moving classes out into the community. There is a lot of innovation going on at the community college and four year regional level.
3. Faculty can present a challenge. The term “innovation” has sometimes been used to describe a move to a lower-cost model that reduces the rolls of tenured faculty and replaces them with adjuncts and contract labor. That’s been an institutional and market response to having a surplus of academic labor. I think innovation thrives in areas where there are resource constraints (e.g., not enough labor or capital), not when there’s too much. There are too many un- and under-employed PhDs out there, so rather than innovate, you can just hire people for less and less money.
Some avenues for innovation within this system could be: How do we ensure that the contingent staff get professional development, have a community and have a way of connecting with each other? However not everyone would say we should accept this system as it currently stands.
4. Within administration the pieces that are driven by compliance are hard to innovate around.
You could look at, though it’s being done in many places, a shared services models where universities purchase in collaboratives.
Some other questions to look at would be:
▪Can certain schools specialize in certain areas (i.e., Russian or Engineering) so not everyone has to do everything? Some consortia have been doing these for many years (e.g., the Five Colleges in western Massachusetts, Bryn Mawr and Haverford in Pennsylvania), but it has generally been institutions in close physical proximity to each other. Could new technologies facilitate more of that sharing and differentiation between campuses?
What are colleges/universities paying for that might not be obvious?
▪College administrators contend that compliance has large indirect costs, as well as the obvious direct costs.
▪Health and mental health. Mental health in particular has been an increasing burden on Higher Ed in the past 10 to 15 years.
▪Athletics. Institutions feel they need to keep it up for alumni engagement so people keep giving to the university.
▪IT investment and IT support have also been a growing costs for higher ed institutions.
What are the most important things to keep in mind when designing for higher education affordability?
The faculty is a very important constituency. Faculty are focused on maintaining instructional quality. Faculty are very open to innovation but only if the level of instructional quality is maintained.
What stakeholder partnerships would you want to bring into the conversation around higher education affordability?
It’s hard to have this conversation without government. Affordability has gone down because of steady decline in state appropriations to institutions and support for student aid. There has been an increase in costs on the institutional side, but there has also been a reduction of support on the government side and an intentional shift of more of the cost burden to students and families.
You want to see people innovate and make Higher Ed more affordable, but if in response the government further reduces support to institutions and students it would negate any progress. You have to make sure the level of support from government at least remains stable.
Another important one is financial services and loan providers. They can increase students’ ability and access to loans.
What innovative solutions have inspired you?
Income-based loan repayment where loan providers are essentially investing in the person and take on some of the risk.
Another interesting one is the push to try to make community college free. There could be a lot of innovations to support that so it’s not just coming from states paying. Free community college means we can offer access to people who might not have had access before.
Also, institutions’ initiatives focused on getting students to complete their degree in 4 years. Some universities are rethinking how courses are offered so they are more student centered. It makes college more affordable indirectly because it’s cheaper if students graduate in four years than in five or six. Arizona State and Long Beach City College and California State University Long Beach have been very innovative across a lot of these issues.
What is your favorite story around college affordability?
My favorite story is about the early college high school model in Texas. They help make college affordable because the students graduate high school with 30 or more college credits. A lot of students are underserved and it makes college a reality for them, because they’ve already done some coursework and they graduate with credits, which reduces the financial burden of college. They feel ready. I think this is a really innovative model that could be used elsewhere for people who don’t have access or the cultural capital to get to college.
Are you reimagining Higher Ed? Post your idea now.