Trends in U.S. Higher Education Fanta Aw Assistant Vice President Campus Life American University Washington D.C.

Trends Converging Trends will shape U.S. higher education in the future Changing landscape of higher education is a hot topic for colleges and universities Issues are complex—from the role new technologies to changing demographics, to rising cost, completion rate, assessment , and globalization

Trends On the federal and state levels, serious questions are being asked about the role of higher education ( cost, ROI, quality) Graduation rates; Performance measures; Affordability and Access; Mode of educational delivery are being questioned

Trends Trends have significant implications for the future of U.S. higher education BUT ALSO Trends have implications for international higher education Globally

7 Major Trends Affordability and Access Demography- Changing population Educational Delivery Mode- Distance Education Performance assessment/Learning outcome Economic Downturn/Crisis Privatization of public education Effect of Globalization

Overview of Enrollment and Types of Institutions Massification and Diversity of Education Community Colleges and State Schools enroll the largest number of students Private/Liberal Arts Colleges constitute the largest number of institutions yet enroll small number of students Traditional model of college is changing- proliferation of for-profit institutions

Number of Institutions and Total Enrollments- Select Years Source: U.S. Department of Education 1993 2008 % Change Number of Institutions 3,632 4,339 +19.4% Enrollment 14,305,000 18,248,128 +27.5%

INSTITUTION TYPE 2007-08 source: U.S. Department of Education   Public Private Two-year Community Colleges 24% Junior/Career Colleges 15% Four-year State Colleges 13% Liberal Arts Colleges/University 44% University Research Universities 2% DIVERSITY OF INSTITUTIONS OF HIGHER EDUCATION by type and by program; resisting homogenization Liberal Arts Colleges constitute 44% percent of all institutions, followed by community colleges 24%, junior colleges 15%, and state colleges making up 2%. However if one looks at enrollment, community colleges enroll the largest number of students pointing to a continued trend on workforce preparation demand, followed by State colleges, liberal arts colleges, and research universities. The majority of students enroll in public institutions, community colleges, states colleges and research universities ( doctoral institutions). Yet there is a perception of private institution having dominance when in fact enrollment due not point to such dominance.

Enrollment By Institution Type 2007 Source: Department of Education   Public Private Two-year Community Colleges 35 % (6,324,111) Career Colleges 2% (293,811) Four-year State Colleges 25% (4,676,046) Liberal Arts Colleges 20% (3,604,938) University Research Universities 14% (2,490,615) 4%(858,599) Strong emphasis on public education. Public institutions enroll close to 75% of all students. Private school only make up only 24% percent of enrollment, yet receive much attention because of the number and types of private institutions. Number of liberal arts college is high yet enroll only a small percentage of students. Research universities enrollment number are sizable.

Issues of Affordability/Cost Parents and/or students are increasingly responsible for tuition and other fees Higher education has increasingly been seen as a private good largely benefiting individuals Surge in private higher education and the financing models have important implications Increasing gaps in access to education- government attempting to close gap with government aid – PELL Grants and others

Federal Support for Higher Education Source: Department of Education 1990 2008 Student Aid $27 billion $83 billion Research $12 billion $28 billion Tax Incentives < $1 billion $10 billion The notion that the government does not invest much in U.S. higher education is a myth, as the table indicates, federal support for higher education continues to be quite substantial and continues to expand. Student aid in the form of loan and grants has almost tripled in 17 years. FUNDS FOR RESEARCH HAS MORE THAN DOUBLED- however it has been a slow growth. The shift to student aid has somewhat changed the landscape of higher education quite a bit. With more money going to students and less “direct investment in higher education” has led many institutions to explore other sources of revenue (tuition, auxiliary services, endowment income).

Trends in College Pricing 1997-98 to 2007-08 Percentage increase Average increase per year Public 4 year 54% 4.4 % Public 2 years 17% 1.4% Private 4 years 33% 2.9% Affordability/Access Public Four-Year Institutions Over the past decade, from 1997-98 to 2007-08, published tuition and fees for full-time in-state students at public four-year colleges and universities rose 54 percent in inflation-adjusted dollars — an average of 4.4 percent per year. This increase compares to 49 percent for the preceding decade and 21 percent from 1977-78 to 1987-88. Public Two-Year Institutions Over the past decade, from 1997-98 to 2007-08, published tuition and fees for full-time students at public two-year colleges and universities rose 17 percent in inflation-adjusted dollars — an average of 1.5 percent per year. This increase compares to 51 percent for the preceding decade and 29 percent from 1977-78 to 1987-88. Private Four-Year Institutions Over the past decade, from 1997-98 to 2007-08, published tuition and fees for full-time students at private four-year colleges and universities rose 33 percent in inflation-adjusted dollars — an average of 2.9 percent per year. This increase compares to 39 percent for the preceding decade and 40 percent from 1977-78 to 1987-88. A thirty-year look at college pricing reveals that rapidly rising prices are not a new development, and in fact point to somewhat of a minimal slow down in rising prices. Pricing reflect increased operational cost to higher education along with a supply/demand relationship. It is expected that with the economic downturn, pricing for public may increase at a higher rate. For the 2009-2010 academic year, private, nonprofit colleges are keeping tuition increases to the lowest average rate in 37 years--4.3%--while increasing institutionally provided aid more than twice as fast--9%. This is nothing new. In the past 10 years, institutional grant aid at private colleges has increased more than twice the rate of tuition. Colleges, however, can not do it alone. Falling endowments, declining fundraising and growing student need have pressed many college budgets to the breaking point. Salary freezes and cuts, staff layoffs, and postponed or canceled campus construction and renovation projects have hit institutions nationwide. Over the last three years, Congress has begun to address the problem, making important investments in Pell grants, federal work study and student loans. And this year, the Obama administration is proposing to transfer some of the government's savings from reforms in the federal loan programs to further increasing Pell grants and Perkins loans. contrary to popular myth, federal student aid does not feed tuition increases at private colleges and universities. Two U.S. Department of Education studies have shown that there are "no associations between federal grants, state grants, and student loans and changes in tuition," and "there is little evidence that federal student aid increases have contributed to tuition inflation."

Affordability/Access Borrowing Culture for Education= Investment Tuition cost continue to increase at a rate higher than inflation or consumer price index Consumer not deterred- enrollment continues to be on the rise reflecting a high demand and a willingness to pay due to the perception that price=quality Financial aid system places financially needy students at a great disadvantage Stratification of students- African Americans attending college remain at 20 percentage points lower than whites A survey conducted by the CIRP in 2006-7 indicate that 52 percent of students indicated some concerns in affording post-secondary education. 36 percent indicated major concerns in affording higher education. The practice of tuition discounting or price discrimination—charging different students different prices for the same educational opportunities—is a long-standing feature of private higher education institutions.

Affordability Strategies Strategic use of non-need-based institutional aid to attract certain types of students to an institution is on the increase- “Bidding war for high profile students to increase ranking” Discounting of tuition- averaging 35%- use of institutional grants Pressure/scrutiny by Congress- Elite schools are asked to spend more of endowment on financial aid- proposed 5% Increase recruitment of full-paying international students

Affordability Strategies Elite school choosing to boost aid to middle, upper middle class families Harvard, Yale, Stanford, Dartmouth, U Penn boosting financial aid Creation of 3 year degree programs and increased enrollment in distance education

Demographic Trends 1996-2016 (in millions) Source: College Board 2006 2016 Undergrad Full-time 7,169,000 9,009,000 10,330,000 Grad & Professional 1,046,000 1,341,000 1,715,000 Enrollment is expected to increase in both public and private degree-granting institutions. the US Department of Education, National Center for Education Statistics predicts that college enrollment will grow 16% over the next ten years. Children of the baby boomers are coming of age in larger number and enrolling in college. Factors affecting the projections Changes in age-specific enrollment rates and college-age populations will affect enrollment levels The most important factor is the expected increase in the traditional college-age population of 18- to 24-year-olds. Total enrollment is expected to increase between 14 -17 percent. Approximately “42 percent of all students at both private and public institutions are age 25 or older” (Aslanian, 2001, p. 4). Not only are they numerous, adult learners are the fastest-growing population in higher education. While the number of 18-24-year-old students increased only 41% between 1970 and 2000, the number of adult students increased 170% (Aslanian, 2001; “Lifelong,” 2002). Some factors that might influence this phenomenon include “the growth of continuing education programs, economic necessity, the rapidly changing job market, changes in the economy, and the simple aging of student populations” (Bishop, 2003, p. 374). Like growth in adult learners, the percentage of women and minority learners is increasing. More women than men now enroll in college (57% of students are women), a trend supported by the fact that more women are entering the workforce (“Lifelong,” 2002). Among minorities, the proportion of women is even higher: “60% of Hispanic and two-thirds of African-American college students are women” (Cetron, 2003, p. 10). If enrollment follows population projections, higher education can expect this trend to continue—the Hispanic population in the U.S. is expected to increase 63% by 2020, reaching 55 million people

Changing Student Population More Latino, African-American, Veterans and disabled Students Retirement of baby boomers Changing pattern of attendance- more part-time or intermittent participation Community Colleges and for-profit institutions best at capturing the changing demographics Most elite colleges will continue to serve traditional college students ( whites , middle class, women)

Online/Distance Education Forefront of providing accessibility to students around the world In response to non-traditional students- Non traditional students expected to be the norm in the future technology as a means to break down geographic, ethnic/racial, economic barriers to education Challenging universities to rewire their way of thinking to begin to meet student needs – digital generation Expected growth of 33% in next decade Over $15 billion industry Key factors for growth include The current higher education infrastructure cannot accommodate the growing college-aged population and enrollments, making more distance education programs necessary. 2. Students are shopping for courses that meet their schedules and circumstances because of work and cost. 3. Higher-education learner profiles, including online, information-age, and adult learners, are changing. Online students are becoming an entirely new subpopulation of higher-education learners. They are “generally older, have completed more college credit hours and more degree programs, and have a higher all-college GPA than their traditional counterparts” Today’s adult learners differ still from traditional college-age students. They tend to be practical problem solvers. Their life experiences make them autonomous, self-directed, and goal- and relevancy-oriented. 4. The percentage of adult, female, and minority learners is increasing. Approximately “42 percent of all students at both private and public institutions are age 25 or older” (Aslanian, 2001, p. 4). Not only are they numerous, adult learners are the fastest-growing population in higher education. While the number of 18-24-year-old students increased only 41% between 1970 and 2000, the number of adult students increased 170% (Aslanian, 2001; “Lifelong,” 2002). Some factors that might influence this phenomenon include “the growth of continuing education programs, economic necessity, the rapidly changing job market, changes in the economy, and the simple aging of student populations. 5. The institutional landscape of higher education is changing: traditional campuses are declining, for-profit institutions are growing, and public and private institutions are merging. “The number of degree-granting institutions will continue to grow, while the number of traditional campuses will decline. By 2025, half of today’s existing independent colleges will be closed, merged, or significantly altered in mission” (p. 37). Another aspect changing in higher education is the blurring line between public and private universities, especially in the financial arena. Dunn also predicted that “the distinctions between and among public and private, for-profit and nonprofit institutions of higher education will largely disappear” 6. Instruction is becoming more learner-centered, non-linear, and self-directed. 7. Lifelong learning is becoming a competitive necessity. Some have estimated that people change careers, on average, every 10 years (Cetron, 2003). Labor Department officials estimate that approximately 40% of the workforce change jobs every year (De Alva, 2000). Undoubtedly, “the changing nature of the workforce in the Information Age … [will require] a continuous cycle of retraining and retooling” . To add to the demands for a dynamic workforce, retirement will be delayed until late in life. In such circumstances, “the opportunity for training is becoming one of the most desirable benefits any job can offer,”

Online/Distance Education Growth include efforts to expand access to more students, alleviate capacity constraints, capitalize on emerging market opportunities, and serve as a catalyst for institutional transformation Factor influencing growth is competition Universities offering online/distance education are often perceived as modern and [technologically] competent, thus creating a competitive advantage

Distance Education Mammoth University of Phoenix has 280,000 students around the world Largest private university in the United States with internet courses 163 campuses and learning centers in 33 states, Puerto Rico, Canada and Mexico

Accountability In Performance shift toward accountability- Learning Outcome- skills, knowledge, abilities Shift from “theoretical” and “seat-based time” to “outcomes-based” or “employer-based” competency With an emphasis on competency, course content will be dictated more “by what learners need, [than] by what has been traditionally done” Shift from enrollment rate to completion outcome What is a “Student Learning Outcome?” Student learning outcomes are properly defined in terms of the knowledge,skills, and abilities that a student has attained at the end (or as a result) of his or her engagement in a particular set of higher education experiences. Evidence of student learning outcomes can take many forms, but should involve direct examination of student performance-either for individual students or for representative samples of students. Examples of the types of evidence that might be used appropriately in accreditation settings include (but are not limited to): • Faculty-designed comprehensive or capstone examinations and assignments. • Performance on licensing or other external examinations. • Professionally judged performances or demonstrations of abilities in context. • Portfolios of student work compiled over time. • Samples of representative student work generated in response to typical course assignments.

Drivers for Accountability Students and Families as Consumers Government- State and Federal Access and Affordability Return on Investment Funding tied to new metrics Employers certification is becoming more preferable than a degree Diplomas are less meaningful to employers; knowledge, performance, and skills are what count to them integrating applied or on-the-job experience into academic programs” as a critical characteristic of universities in the 21st century

Economic Downturn Impact of Crisis on notable institutions Cornell, Brown, Darmouth, U Penn, Harvard The case for State Universities UC system- 20% budget cut for AY 2009 Others range from 10-20% Greater funding for community Colleges-Obama Administration “Trading Down” decision- moving from private to public and from 4 yr to 2yr institution

Implications for IHE? Globalization and trends in mobility of students-new players ( Malaysia, Saudi Arabia, South Africa, etc) Diversity argument may become harder to justify- given demographic shifts Key is integrating “multiculturalism” and “International Education” Need to focus on preparing “Global citizens” for the “global economy.” Issue is “How do we measure success and learning outcome ?

Implications for IHE? Cost of U.S. higher education will be an on-going challenge, thus expanding global mobility of students to other parts of the world. U.S. share of global market will continue to decline U.S. Higher Education must continue to successfully argue the “value added” dimension if it is to compete effectively Growth and opportunity mostly in S&E where supply of U.S. student are limited Research 1 Universities and Community Colleges to continue to experience growth

Implications for IHE? Technology capabilities will continue to encourage the rise of global universities There will be an increase in alternative delivery systems, including the creation of foreign campuses Emerging Economies will account for majority of global capacity and significantly define the Global HE profile ( China, India, Brazil, Chile, South Africa, Malaysia, etc)

Implications for IHE? HE to become of a globally traded commodity Protectionist barriers may arise due to security, differential pricing Competitiveness will require rapid innovation in subject matter AND pedagogy Private funding for HE will increase significantly

Conclusion Learning is not just about covering content, it's about developing competency- Competitive advantage of U.S. Higher Education Instruction is becoming more learner-centered, non- linear, and self-directed Students are consumers with a choice – and HEd must yield to demand Reform of quality and accreditation metrics to be expected ( value for money, employment outcomes) Must align technology with pedagogy

Conclusion Lifelong learning is becoming a competitive necessity- career changes on average every 10 years – need for retooling, retraining Traditional campuses are declining, for-profit institutions are growing, and public and private institutions are merging Number of degree-granting institutions will grow By 2025, half of today’s existing colleges will be significantly altered in mission

Conclusion Higher Ed must look beyond traditional and conventional boundaries so must IHE Universities must be adaptive to a changing environment- demographics How institutions approach changes will determine whether they remain competitive in the future, or if they will cease to exist Price and quality competition is likely to intensify The social, technological, ecological, economic, and information challenges of our time require a whole new approach to education." (Dickinson)

Resources Department of Education College Board Higher Education Landscape Council for Higher Education Accreditation Chea :www.chea.org Department of Education National Center for Education Statistics

Assistant Vice President 4400 Massachusetts Avenue, NW Contact Information Fanta Aw Assistant Vice President Campus Life American University Butler Room 401B 4400 Massachusetts Avenue, NW Washington D.C. 20016 202-885-3357 fanta@american.edu