The pressure is on for higher education institutions as they continue to face constraints including falling enrollment and reduced funding. Now, as potential students increasingly question the value of a college education, universities are concerned that this crisis of confidence in higher education may affect their ability to attract students, secure state funding, and curry alumni support.
With rising tuition and the perception that universities and colleges are disconnected from the real demands of life and careers, many students wonder if a college education is really worth the cost. This comes as no surprise to admissions directors, 95% of whom agree that higher education needs to do a better job at explaining the value of a college education. With U.S. student loan debt currently exceeding $1.3 trillion, graduates nationwide are entering the workforce strapped down by student debt, exacerbating the public’s growing distrust of higher education.
Facing mounting pressure to quantify the value they create, universities have begun to address this issue by introducing performance-based funding models, alternative education options, and student college-shopping tools. By increasing educational value with these strategies, higher education institutions aim to ensure that when applicants and lawmakers ask, “Is this really worth the money?” the clear answer is “Yes.”
1. Implement More Outcomes-Based Funding
State funding for higher education is currently determined by the number of enrollments and prior-year funding levels a school has received. An alternative, performance-based funding, pivots away from quantifying funding based on the number of students that pass through a college’s doors, allocating money to institutions based on indicators like course completion and time-to-degree rates.
Reacting to the loss of confidence in the value of higher education, more states are implementing these models: In 2017, 14 states considered new or additional outcomes-based legislation, and 28 had already implemented some form of outcomes-based funding for four-year institutions. Performance funding has also received strong endorsements from federal and state elected official and educational foundations; a report by the National Governors Association states that the model “provides financial incentives for graduating students and meeting state needs.”
The overall effect of performance-based funding is still being determined, with states seeing mixed results from the model. One study found that performance funding led to an increase in the number of associate’s degrees and certificates granted by two-year colleges, with some literature reviews finding positive impacts on four-year university spending. However, other reviews evaluating the long-running performance-based funding models in Tennessee and Pennsylvania found no significant effects from the policy change.
2. Increase Alternative Education Options
Students have more freedom than ever before to pursue non-traditional post-secondary education options, which they see as convenient, flexible, and tightly linked to job market needs. Alternative education options can cost a fraction of tuition fees, reduce geographic barriers to learning, and allow students to progress through programs at their own pace. The current administration appears to support these alternative formats and is pursuing funding support through the new GI bill and the Perkins Act Reauthorization.
Alternative education providers fall into two broad categories: MOOCs and immersives. MOOCs provide open access to online learning through sites like edX and Coursera, which aim to provide the online equivalent of a university experience. Immersives give students short, intensive learning experiences to quickly acquire in-demand skills with coding bootcamps, in-person lectures, and peer learning. One computer programming immersive, HackReactor, boasts a 99% job placement rating with many “alumni” securing jobs at companies like Google and Facebook, demonstrating how the skills learned through these programs can aid students in securing jobs after graduation.
3. Encourage Use of Student College-Shopping Tools
Colleges are required to provide an online calculator to help students estimate their overall costs, factoring in scholarships and grants to determine the actual price. But these calculators can be difficult to find and use, leading many students to estimate a college’s value through alternative “institution-shopping tools”. Sites like College Abacus, Niche, and Payscale’s College Salary Report expand applicants’ abilities to compare and scrutinize perceptions of college value, and are seeing increased use from students considering college education.
Many college-shopping tools allow prospective students to simplify the process of researching colleges, giving side-by-side comparisons of several schools at once. Students can compare individual college tuition estimates with schools’ academic backgrounds to provide information directly to students, eliminating the need to visit each school’s website.