Redefining value in international higher education

At the beginning of 2013, I projected that the three trends influencing global higher education would be related to funding, the regulatory environment and technological innovations. I concluded that in 2013, the higher education sector would be under increasing pressure to justify its value, not only from funding and regulatory perspectives, but also due to the emergence of cost-effective technology-enabled learning alternatives.

Going forward in 2014, there will be increasing pressure on higher education to redefine its value to students.

Simply put, for the majority of students, the value of higher education is a function of its immediate employment prospects as opposed to long-term developmental and intangible benefits. This quest for value is especially prevalent in developed economies, where slow economic growth and scarcity of employment prospects fuel scepticism.

Here are three trends setting the future direction of higher education:

Towards efficient funding

While the economic environment in countries like the United Kingdom and the United States is improving, the new normal is lower public funding for universities. Universities are expected to be self-sufficient through increases in tuition fee revenue, which is becoming quite difficult in an environment of declining college enrolment.

In a recent survey, approximately four in 10 public universities in the US reported that tuition fee revenue is not keeping pace with inflation. There were negative trends like inability to raise prices, declining enrolment and heightened regulatory and political pressure to keep tuition fees down.

Likewise, private institutions are facing cost pressures and declining demand from the traditional college-bound population.

The call for accountability and affordability from the US government, which links the affordability rating with financial aid, further compounds this pressure.

In Europe, the discourse on ‘efficient funding’ is already picking up momentum, which may increase the emphasis on performance-based funding, mergers and cost transparency.

In the UK, the decline in funding from the government council is compensated by significant growth in fee income from home and European Union students.

For example, Higher Education Funding Council for England, or HEFCE, funding for teaching will decline by £891 million (US$1.46 billion) in 2013-14, as fee income from full-time home and EU undergraduates increases by £1.4 billion.

Towards technology-enabled learning innovations

The pressure for efficiency is meeting technology-enabled learning innovations to create a new value proposition for a segment of students who are more cost-conscious and seek flexibility to learn at their own pace. This segment is defining value differently to students who can afford to invest time or money in a traditional college education.

In November 2012, The New York Times story, "The Year of the MOOC", asked what a student wanted to get from the MOOC experience. A year later, as the “market takes off”, MOOCs are evolving, growing, adapting and collaborating in their attempt to fully answer this question.

For example the biggest player, Coursera, added nearly three million students in 2013 and is now innovating to build a global network in partnership with the US Department of State.

Concurrently, long-standing institutions that have been offering open and distance education are also facing the competitive heat and responding with innovative models. Even the largest academic institution in the UK in terms of student numbers, The Open University, had to launch its own version of MOOCs.

The learning innovations are continuing where competency-based education seems to be higher education’s ‘next big thing’ and stackable credentials are expected to be ‘game-changers’.

Towards new paradigms of quality and teaching

With mounting cost pressures and new models for delivering education, paradigms for quality assurance and teaching are also under scrutiny.

A recent report laments the current system of regional accreditation in the US and recommends separating eligibility for federal education funding from the accreditation process and using transparent performance metrics.

Likewise, accreditation agencies in the US are struggling to adapt and respond to emerging models of learning and at times seem to oppose change. For example Ivy Bridge College, which was offering an online, two-year associate degree programme, was shut down by an accreditor due to issues related to institutional control of the programme.

There is increasing pressure on accrediting bodies to be “flexible in response to educational innovation” and to let market forces decide innovations in online learning and MOOCs.

Although barriers to the recognition of MOOCs, such as transferable academic credits, still linger, Georgia Tech’s online masters holds promise for future MOOC-based credentials.

In fact, the optimism about credit transfers from MOOC learning experiences are expected to come from Europe due to its ECTS – European Credit Transfer and Accumulation System – framework.

In the UK, policy is geared towards support for universities that go abroad and engage ‘glocal’ students through transnational education as compared with recruiting more students for UK campuses. This in turn is raising challenges and the need for quality assurance in transnational education.

Another impact of the changing equation of cost, quality and technology is on the role and profile of faculty in higher education.

As The New York Times noted in its recent story: “The trend toward employing part-time contingent faculty members, combined with slow growth in the number of tenure-track university teaching positions, is continuing to sharpen the competition facing would-be academics in the United States [and] Europe.”

Towards redefining value

While higher education continues to be one of the best investments, increasing costs and low employment rates will be making students more demanding, impatient and utilitarian in assessing the value of their investment.

In addition, the confluence of cost and funding pressures, technology-enabled learning innovations and new paradigms of quality and teaching, will further force universities to reassert their value from the students’ perspectives.

In this context, The New York Times reports increasing interest among students for lists that rank colleges’ value, even though “there is no agreement on how to measure the value of a college, and there is no agreement or anything even close, on what value is in the first place”.

In sum, 2014 will be remembered for the increasing pressure on higher education institutions with regard to the value of their offerings, even though approaches to measuring the value remain contested.

Dr Rahul Choudaha is the co-founder and CEO a tDrEducation and http://interEDGE.org. He researches, speaks, writes, and consults on international student trends and its implications for institutional strategies and student success. Choudaha holds a doctorate in higher education from the University of Denver. He is reachable at info@DrEducation.com and @DrEducationBlog.