CEO KEYS: The Value of Attending College
Higher Education continues to rapidly evolve as Universities adapt to the COVID pandemic and prepare for the emerging post-COVID world. Now more than maybe ever, students and employers are evaluating the real cost-benefit of a college degree.
One common theme widely debated is affordability. Nearly every higher ed related article and survey that I have read suggest that tuition rates are the number one concern of students and parents when evaluating an advanced degree. In all honesty, I find it remarkable that there is so much price differentiation between what are ostensibly very similar degree offerings (e.g., an MBA at University A vs. an MBA at University B).
What leads to these wide tuition gaps on nearly identical programs? In my view, it all comes down to perceived value. The university brand is still valuable, and in my opinion, is a primary driver in the tuition variance we see.
However, it might not be as influential as it has historically been. In an increasingly competitive landscape, universities today seem to have two choices to remain competitive in the longer run: they can lower their price to meet the market or enhance and differentiate their offerings to demonstrate increased ROI for their students.
I feel that many universities are charging too much for specific degree programs, and often the tuition outweighs the value of the education and the degree to the student, the economy, and the broader society. One reasonable answer is to cut tuition to remain, or become, competitive – and in many cases, this is an appropriate, necessary, and equitable action.
While some seem to have the impression that Online Program Management providers (OPMs) drive up the costs to students, OPMs steeped in market research and data related to supply and demand, push their University partners to lower their tuition and broaden their reach.
So, while lowering tuition is an option (and again, often a good one), perhaps a more intriguing course of action would be to examine how to build more dynamic program offerings that lead to demonstrably, superior outcomes. Undoubtedly, this is more complex than just cutting tuition – but, just maybe, this approach can lead to a win-win-win for Universities, the students and the employers who ultimately hire them.
This last idea – enhancing programs and delivering better outcomes – that I would like to explore further.
1. Universities need to build better connections to business and industry.
While learning and more excellent knowledge are indeed their rewards, the objective of almost every student is pretty simple – earn a degree as a gateway to a job (or a better job), to earn a living (or earn a better living) and to provide for themselves and their families. There is no great mystery here. Moreover, it would seem incumbent on Universities not only to impart knowledge on their students but also to help set their students up for career success. When we all talk about the value of an advanced degree, this is the right measuring stick. However, are Universities intentional enough about this undeniable fact? I speak with far too many students who have had a great learning experience, only to quickly sour on it when they do not get the (implied) promised ROI. If you take a close look at many University budgets in the career services area, it will quickly become evident that this critical area often does not get the necessary attention or resourcing. Graduates getting a job (or a better job) is the real value proposition here. Everyone knows it – but few meaningfully invest in it. So, what can universities do? Here are three ideas:
- Place a more serious focus on career services (and job outcomes) at the beginning of a student’s studies – rather than what is often an afterthought in the program’s waning months. Universities should develop long-term, mutually beneficial relationships with local and national employers and provide students with access to internships, career mentors, career readiness training, and in some cases, a direct pathway to employment at the end of the program.
- Universities should transition specific courses from knowledge-based to skill-based. There is undoubtedly a place for liberal arts and other more knowledge-based offerings (particularly at the undergraduate level). Still, schools need to get way more intentional about the skills that students need in their fields.
- Invest in and build a robust career placement function. Having one employee who spends their time on career services is not the answer. Have a team of recruiters whose sole purpose is to connect students to industry. While the ratio could undoubtedly vary depending on the university and the program, I would suggest starting with one recruiter for every 100 graduating students.
2. Bridge short embedded certificate courses (skill-based) within the degree offering.
Yes, earning a degree is essential. Wouldn’t it be additive if students learned particular skills and received verified certificates that demonstrate the specific skills attained?
3. Focus on in-demand career fields.
MBAs have their place, but as we move towards a skill-based economy, the demand for more narrowly tailored skill-based programs is rising. Circling back to tuition rates for a moment -- universities should implement differentiated tuition rates based on the likely (or top) career outcomes associated with their various programs. Programs that lead to jobs in high demand fields with relatively high starting salaries (e.g., computer science, healthcare, and social science) should rightly command higher tuition.
In sum, universities need to be more consumer-focused when it comes to setting their tuition. While I encourage the rightsizing of tuition in many situations, I would argue that the schools that have a sharper focus on building real-world value for their students will be the ones that thrive.