1. A Response to Massification: Reaching New Students, Creating Capacity in the Market, and Building Educational Institutions Jonathan D. Mathis Provost Fellow University of Southern California Center for Higher Education Policy Analysis

2. Presentation Outline What is “massification”? Massification in Practice Students Market Capacity Institutions How do we support the development of a knowledge-based economy? Publicly-traded Institutions Role of Philanthropy Implications

3. What is “massification”? Majority of society is expected to participate in postsecondary education, including certificate, associate, baccalaureate, and graduate degree programs (Teichler, 1998) An increase in the number and diversity of institutions contributing to the development of active participants in a knowledge-based economy Seen as the result of accessible student financial aid, growth in college-aged student population, and increased corporate demands (Geiger, 2002)

4. Massification in Practice 1. Students Options and demographics 2. Market Capacity Matching new demands with existing structures 3. Institutions Rise of new, entrepreneurial institutions

5. Massification in Practice: Students “…[I]n the past, college attendance was reserved mostly for the children of upper-class, well-educated families, [but] increases in the number and variety of institutions and the availability of aid programs… now make the option to attend college available to an increasing number of different types of students” (Burleson, 2010)

6. Massification in Practice: Students Number of Bachelor’s Degree Recipients (per 100 persons) Country200420052006 Australia46.959.959.6 Brazil15.617.521.3 Denmark49.952.950.3 Finland54.753.857.3 Iceland50.556.362.8 United States33.234.235.5 OECD Average 34.336.337.8

7. Massification in Practice: Students Percentage of Population Enrolled in Secondary Education (2006) Country16 years old17 years old Australia94%80% Brazil86%82% Denmark91%84% Finland96% Iceland94%84% United States93%82%

8. Massification in Practice: Students Country18-21 Years Old22 to 25 Years Old26 to 29 Years Old Australia2005- 34% 2006- 33% 2005- 21% 2006- 21% 2005- 10% 2006- 10% Brazil2005- 10% 2006- 10% 2005- 9% 2006- 10% 2005- 5% 2006- 5% Denmark2005- 10% 2006- 11% 2005- 34% 2006- 34% 2005- 20% 2006- 20% Finland2005- 24% 2006- 24% 2005- 40% 2006- 40% 2005- 20% 2006- 21% Iceland2005- 12% 2006- 12% 2005- 28% 2006- 28% 2005- 16% 2006- 16% United States2005- 45% 2006- 46% 2005- 23% 2006- 22% 2005- 11% 2006- 11% Percentage of Population Enrolled in Postsecondary Education

9. Massification in Practice: Market Capacity Traditional universities cannot meet the demand of massification due to the following constraints: Physical space (campus capacity for growth) Logistics (time and scheduling) Instructional demands (faculty hires; tenure-tracks) Costs Capital Improvement Non-traditional students are now able to consider public, private, and for-profit postsecondary institutions Enrollment decisions might now include greater emphasis on desired collegiate experience, professional needs, and fit

10. Massification in Practice: Market Capacity United States Institution Type2006-2007 Revenue (in millions) Gifts, grants, contracts (in millions) Revenue per FTE Student (in dollars) Expenses per FTE Student (in dollars) Public Institutions (1,685 institutions) $268,556$5,5892005-2006: $27,889 2006-2007: $29,306 2005-2006: $25,667 2006-2007: $26,062 Private, Not-For-Profit, Institutions (1,624 institutions) $182,381$20,1932005-2006: $55,859 2006-2007: $63,868 2005-2006: $42,721 2006-2007: $43,619 For-Profit Institutions (1,043 institutions) $13,978$42005-2006: $14,870 2006-2007: $15,364 2005-2006: $12,061 2006-2007: $13,357

11. Massification in Practice: Institutions Laureate Education, Inc. 45 accredited campus- based/ online universities; over 130 programs; nearly 500,000 students The Open University 13 UK National and regional campus plus on-line options; 60 degree programs; over 250,000 students

12. Massification in Practice: Institutions Capella Education Company 22 undergraduate and graduate programs; 111 specializations; nearly 27,000 students from United States & 52 countries Revenue: $272.3 million (2008 Annual Report) 45% Ethnic Minority Students Apollo Group, Inc. Over 100 degree programs ranging from undergraduate to graduate; 443,000 students; increasing international presence Revenue: $4.0 Billion (2009 Annual Report) 48% Ethnic Minority Students

13. How do we support the development of a knowledge-based economy? Publicly Traded Institutions (Stock market values as of March 19, 2010) –Apollo Group (NASDAQ:APOL ): $64.37 –Capella Education Company (NASDAQ:CPLA): $ 90.10 Philanthropy Joint Ventures and Collaborative Efforts Government/National Policy

14. Implications In responding to massification, entrepreneurs and institutions consider the following interrelated factors informing the global postsecondary education market: –The rising middle class –Growing populations of school-aged youth –Human capital needs to service economies –Education as a lifelong pursuit –Governments unable to fully fund public universities (Laureate Education, Inc.) Entrepreneurial efforts become instrumental in developing funding streams and joint ventures/collaborative degree programs among institutions

15. Center for Higher Education Policy Analysis Rossier School of Education, WPH 701 University of Southern California Los Angeles, CA 90089-4037 (213) 740-7218 www.usc.edu/dept/chepa