Do Universities Have a Plan?
This month, college students across the country are returning to campus eager to reconnect with friends and start their fall semester; their experience, in the first few days, will likely be similar regardless of what school they are attending; they will receive the royal treatment, the red carpet rolled out to excite them and seal their commitment to the school. This is vastly different from what it was like in the mid-80s; there was little effort given to helping students settle in. Regardless, I fondly remember the first few days of the fall semester, even though it was almost 40 years ago; in many ways it was the simplest time of my life. Acknowledging that the different approach to welcoming students is a new reality and not likely to change, there is something else new students can count on that wasn’t a part of my time at college; they will be greeted with new buildings and lots of construction.
Colleges and universities are spending massive amounts of money on capital projects to elevate their facilities and attract students. In fact, last year alone they spent over $14 billion dollars, as billion-dollar capital programs are now the norm; for example, Purdue recently launched a $1.4 billion dollar capital project. All of this is happening at a time when the average cost of attendance for a student living on campus at an in-state public 4-year institution is $27,146 per year or $108,584 over 4 years. Out-of-state students pay $45,708 per year or $182,832 over 4 years. Private, nonprofit university students pay $58,628 per year or $234,512 over 4 years.
It goes without saying the cost of college has reached a level where the average person and/or parent is questioning the return on investment; it is a good question. Today, college debt has topped $1.6 trillion dollars; students are borrowing money, at an alarming rate, to go to college, because they are convinced that the path to a better life begins with higher education. I think it is a fair assumption, but the costs borne by the students makes it open for debate.
The relationship between the students and the colleges has changed. Students know how much they are spending, their parents likely are there to remind them; with that data point, students want to be treated well, very well; they actually view themselves as a customer—I taught for eight semesters at my alma mater and was shocked the first time I heard a student say they were the customer; when I was a student, I was just happy to be there. You could certainly wonder if it is good for students, who are supposed to be learning, among other things, how to live on their own. For many, their lifestyle in college is better than their prior home life and sadly better than what it will be when they graduate. My sense is, it’s not good for students to spend four years living in an environment that doesn’t track with the real world. That’s my view, but I get why it is happening; students expect only the best, and universities are locked in a marketing battle with their peers to attract students. And frankly, they need to justify the out-of-control tuition they are charging.
The marketplace has a way of fixing the economic relationship between giver and taker and I believe higher education isn’t immune from this. I don’t pretend to know what will be the tipping point. Maybe it will be like going bankrupt; at first it is slow and then immediate. I may not know when it will happen, but I believe it is safe to say it will, the higher education business model is destined to change.
And that brings me to my point, it seems illogical to spend so much money on buildings that may or may not be central to the future of higher education. At what point will students seek an education that is more reflective of the technological capabilities that exist? I know, in person learning is critical and the centerpiece of the college experience; much like companies who would have never imagined employees working remotely. Covid tested that premise and showed that companies and employees can be effective without driving to the office; that new dynamic has changed everything.
I don’t think a shift from in person learning to remote learning will ultimately be a discussion about the effectiveness of the education received; it is now, but I don’t think it will last. In time this conversation will probably be about money. If a student can live at home and receive an undergraduate degree utilizing the power of AI, how will a land grant university with awesome, very expensive buildings compete?
You can get real pushback on this subject when you approach leadership at universities; after all academia hasn’t changed all that much over the years. They still fight to maintain tenure, and although it has its place in the academic world, it is amazing that tenure hasn’t materially changed in decades. I understand the resistance that comes from the conversation about the future of receiving a college education; I have been on the College of Business Administration Advisory Board at my alma mater for almost 25 years. In that time, I have seen the college build a new building for classes (it was needed; the prior building had asbestos, and that’s never good) and now recently approve another building at a cost of $227 million for more classrooms and office space for their faculty. I won’t challenge their need nor desire to be the best; I also want them to be the best. What I wonder is have they thought about what will happen the first time a peer university offers online teaching, using generative AI, at a fraction of the costs to attend in person? How can you justify building facilities to meet the business model from the past, when disruption is threatening and likely? Almost without exception, every business model is susceptible to disruptive forces intended to alter the status quo; it is naïve to believe higher education will avoid this reality.
I know it is blasphemous to suggest that universities will ever be displaced by a nimbler solution that markets a real return on investment; however, things happen. Could anyone have imagined, 20 years ago, that an offensive lineman on the football team would make more money annually than a tenured professor at the same university (I doubt it, but it is now happening), or that downtown San Fransisco’s commercial real estate would sit empty? The point is nothing is off the table.
Students today have a completely different view of the world than their counterparts did 40 years ago. Are universities meeting them where they are heading, or are they providing a five-star experience as though it is a nice restaurant with great reviews on Yelp?
I love college and the university setting; it changed my life, and I feel better every time I walk on a campus; it is a special place. If it were up to me, it would never change and college would be about teaching, research, and personal growth, and not marketing and rankings. But it’s not up to me, its up to a new breed of buyer. A buyer who is pushing a new business model. Right now, students/parents seem willing to accept the costs of tuition, if there is a Starbucks on the corner and workout facilities with the best equipment. What happens when they don’t feel the personalization and experience, they receive is adequate, what will they do when they realize they can get a degree in a personalized, customized way with scale and significant savings? I don’t know, but it seems silly for university leadership to ignore what will likely come; failing to consider the wisdom of dollars spent making the campus a resort; maybe the best use of resources would be to invest in figuring out how to deliver an education using the rapidly evolving AI capabilities, specifically generative AI. I am proud of my school, but I would feel better if they were targeting $227 million on embedding AI into their offering and not some building that represents a, “build it and they will come mindset.”
I think about this often and it bothers me. I don’t want college as I knew it and valued it to change, but I am afraid the ship has already left the harbor and administrations are focused on the wrong things. Maybe I am missing this; I hope I am, but I think it is fair to ask, do they have a plan?
