Many things will happen, but it can be summed into the following general statement “more challenging year ahead and beyond“, confirmed on 01/23/2018.

1. On the demand side: Less resources are available for degree seekers.
2. On the supply side: Accumulation of excess supply will continue & declining resources (01/25/2018).
3. For Higher Ed institutions: Declining (1/16/18) or tougher (1/18/18) state funding (01/25/2018) regulation (1/25/2018). Note the date added when our prediction is confirmed).

These two main market forces will clean the closet which has been so cluttered due to BAU/status-quo (SQ) attitude which has long characterized the whole system.  The clean up will lead to:

1. Stricter regulations on both federal and state funding.
2. More non state-owned college closures, restructures & mergers.
3. State will consolidate more state-owned colleges under a single roof, eliminating wasteful management and other redundant positions.
4. Risk of college employees lay-off (1/19/18) will increase.
5. Increase public monitoring & scrutiny on accreditation agencies’ quality work.
6. To some degree: tuition-reduction price war will intensify.
7. A bit late, but increasing use of IRI V.1.  However, the use of analytics alone (IRI V.1) no longer will produce best optimal results, unless move on to IRI V.2.
8. Excess demand for professionals with IRI expertise will increase tremendously.

Unfortunately, only a handful or none of the current institutions will change, for the SQ  culture has infected the whole system for so long to a point-of-no return.  None of the participants/players in the system will care, so long their interests (translate $$ and benefits) will not be touched.  The only way to stop these cancerous cells from spreading is by enforcing a combination of the invisible hand, further reduction or harsher on federal and state funding.  The institutions will not make any voluntary & significant efforts to transform themselves for there is no real incentive for them to do so.  The source of change should come from outside such as fed or state. As Hukill statement says, the change is necessary so that they (the colleges) are able to live up their mission.  Therefore, the students can take the right courses, reduce their debts and graduate on time”.  Her statement explicitly reflects and reaffirms US higher ed institutions’ failures and perhaps, implicitly say accreditations’ agency sub-par past quality work.  Sad! Very sad!

Happy New Year 2018!!

A couple of days ago, the Association has written a short article on the possible important higher ed policy changes in the state of FL.  Regardless of what will happen with the Bill, institutions under the System need to make important changes.  Analyzing what is happening and will happen in the US higher Ed, it seems to us that sooner or later the proposed changes will finally be approved by the state lawmakers.  Unless more revenue can be generated by the state from other sources which will ensure future funding will always be available for the state higher ed.  The impact of the proposed changes concerning former graduates’ performance at the 4-year institution where they have transferred to is worth noticing.  For their performance at the (new) 4 year institution will be capitalized as a determining metric in allocating individual institution’s rank under the state’s Performance Based Funding Model.  This aggressive form of institutional accountability new regulation will leave a pretty small room for the institutions to maneuver.  Consequently, more resources and training needs to be devoted into IRI.2.  The State Colleges may not have any other easy way-out, rather than to embrace the change, where current or future policy will be carving around customer’s satisfaction mindset as what we have previously discussed.

As currently as Community College Competitiveness Acts or Hukill’s bill, legislators and lawmakers alike have worked intensively to improve higher ed in the state of FL.  Ranging from funding formula to the Board’s name changes. The Association has discussed such a potential change in its November’s BLOG article.  Changes will not always bring everyone on board.  This article is not about presenting different views, rather to discuss how different institutions under the System will be able to navigate the policy roller coaster, and survive.  Unfortunately, to make a meaningful change, an institution needs to move fast, adaptable and has a rubber-band culture which will adjust to the new environment.  Only those that have such characteristics will survive.  Looking at the past ranking of the State Community Colleges listed under Performance Based Funding report card, it shows a pretty clear picture which institutions potentially may or may not survive the changes.  For those selected few organizations who can overcome the BAU, they still need a clear direction of strategic-path that enables them to move toward the right direction.  This strategic path can only be generated by IRI 2.0, and beyond IRI 1.0.  IRI 1.0 will supplies the strategic information which then can be used further in IRI 2.0.

The answer to the above title is not as easy as one thinks.  It depends on the level or where the restructuring is taken place.  Looking at the recent state-own institution, one can see the restructuring happened at the System Office.  Example: the state of CT and WI have done this, OK is considering to follow suit.  This is a fundamental change, which will impact many administrator positions such as the College president, perhaps potentially with all her or his cabinet members.  SIU in IL is a good example where the restructuring process occurs at the (individual) institutional level.  Most impacted will be Deans and Department Heads.  This morning we learned one of the state-owned institutions in MO is restructuring in a smaller scale i.e., at the program level, where several programs are combined.  The restructuring efforts have the main goal to reduce the administrative cost dues to redundancy, overlaps, and non-contributing value added positions created in the past for different reasons.  But now, the past is the past and embrace the future.  Perhaps, it is long overdue where US colleges have to be managed equally professional as other companies in other industries do.  This will bring a bigger shift in the hiring of the top person and also the Leadership program or major under the Graduate College of Education which traditionally produces such a leader in the past.  This shifting paradigm occurs because the changes in competitive environment and it may take years before one can see the whole US higher ed in better shape.  A new breed of professionals may not coming from the College of Education.  Rather, from a new created program which we will reveal in our next Blog.  Please keep on checking the site.

Under the new administration’s deregulation policy, the manufacturing and service industries seem to work great as shown by the DOW.  New regulation or deregulation are also introduced in the higher ed.  As previously known, any public policy changes will not satisfy everybody.  Both sides seem to have legitimate reasons to oppose or support the proposed new rule.  The focus on this article is not to argue which one is better.  Rather to frankly ask how higher ed institutions will be able to navigate around it?  There is time laps before newly approved policy changes take into effect.  Therefore, there is time for institutions to adjust or prepare themselves.  However, the direction of the adjustments need to be studied carefully, and based on the results of many, but finite options, institutions then make an optimal choice, given its conditions.  First generation of IRI which gained popularity after it was introduced to the public in 2013 by the Association may no longer be an appropriate approach under such uncertainty.  Therefore, we have introduced and shared to the American public the second generation of IRI championed by stochastic simulation.  If the Foxx and Guthrie’s Education Reform Act becomes the law of the land, it surely will have chain reaction effects to many players.

The answer of the above question is pretty straight forward.  Bumpy road ahead for most US higher ed.  Many years ago the Association has predicted and shared of what is coming to the public.  However, only a few take advantages of what we have forecasted based on publicly available data.  Less resources means:

1. Force Colleges to increase tuition.  This is the past sub-optimal and self- destructive policy which may not viable, given the consumers’ awareness,  change in their perceive value on higher ed, and current administration’s higher ed policy.
2. Cut cost and spending across the board, including administrators’ and professors’ fat earning.  Interestingly, some advices have been offered to college presidents’ when they have to let go.
3. Cut employees’ benefits.
4. Lay off, especially for duplicated units on campus that do not relate directly with students services.
5. More work for faculty and staff who are lucky to have a job.  Teaching faculty may teach more than 6 classes in a semester, and competing for research funding becomes a priority from the management.  As results, teaching may not be the first priority, and that quality may be compromised.

The bottom line is that financial stress will increase which may lead to more closures, merger and campus down-sizing.

Campus restructuring will end up with fewer, but stronger institutions.  Some of these institutions such as Brown University has made a great preparation by campaigning to create fund which will be used to replace students loans.  This has an important strategic implication, i.e., only the academically strongest students will be admitted to it’s program.

In the past several weeks, we have heard how the state has made a decision to restructuring its higher ed system into a more efficient and more align to the new reality.  It started with WI, followed by CT, and more recently OK.  Should higher ed administrators in other states be nervous?  It should not, because restructuring will create a new system which LEAN, efficient and more effective.   The Association has discussed this issue many years ago in its BLOG.  Therefore, one should not be surprise–it is all about resources.  When they decline, then one should expect lay off, early retirement and for some, create anxiety what is going to happen to their future.  One important thing that differentiates what has happened in the manufacturing/service industry and that of in the higher ed.  Higher ed is classified as a non-profit industry, except for the-profit higher ed.  Therefore, they are not subject to pay taxes.  If one needs to consider this exemption into the analyses, the inefficiency that has occurred in higher ed is even larger i.e., incredibly less efficient, where valuable resources, i.e., tax payers money has been flushed to the …kitchen sinks and produced less output from the spending.  The  higher ed industry has blown out any possible golden opportunities given to them to manage thing right.  However, that public’s trust has been tainted, and it will take a long-time to recover, if there is any chance at all.  This shows past decision making process on budget allocation was less effective.  There is no other way other than to fully implement the Performance Base Funding to deal with declining resources, Fed policy changes and consumers’ perception on higher ed, college administrators and general public’s/society’s perceive value on college education.

About three weeks ago, we have written in our Blog, and discussed that some US colleges are in a survival mode and possibly in a financial trouble situation due to significant drop on their student enrollment.  Common sense tells them to lower tuition may be a great strategy to reverse the situation, and therefore, may increase institutional revenue generated from Tuition & Fees.  Well, not too fast.  Common sense has to be supported by institutions’ data, research and analytical thought.  One needs more than a common sense to make a strategic decision.  After reducing the tuition, there are three possibilities which may happen to the campus revenue: decline, no impact or increase.  An institution needs to exercise the IRI Analytics generation I, or even generation II to know before making a final pricing strategy.  Need help?  Contact us.

Future US higher ed consolidation has well been predicted by the Association many years ago.  Currently we learned that the consolidation not only has occurred in among private colleges, but also within the state-owned higher learning organizations.  WI and CT have moved forward to consolidating its higher ed into one single-roof management.  Needless to say that all that are happening right now, are the results of their (colleges’ ) past policies.  With the new administration plan to reduce federal funding, financial challenges facing colleges will increase even more difficult in the near future where spending is uncontrollable, and source of revenues are getting limited, then surely the Adam Smith’s invisible hand will work to correct the inefficiency in the system.

Today we learned that one of the oldest Liberal Arts colleges in NC was the latest institution that make to the probation list.  Looking at 5 years old article in our Blog, we have learned that two institutions were listed as troubled colleges at that time, with a rank of BBB.  According to our IRI Analytics modeling research finding applied on publicly available data, the other institution that is also on probation has the rank of ABB. It does not surprise us at the Association to hear the news.  This is not the last organization that may potentially lost its accreditation.  There are many others as they have been listed in our research results.  What surprises us are:

1. How slow these institutions, and other higher ed organizations, in general took actions and to change their culture to reverse the situation.
2. How difficult it is to change the campus culture.
3. How challenges it is to change the BAU mindset, using IRI paradigm.
4. How strong colleges leaders have the will to change they way their manage their organization.
5. How slow the Southern Association to make actions.  Though a bit too late, it has made important steps and progresses in recent years.

Perhaps, the time has arrived for each regional conference to publish those troubled institutions, so that the public can make a sound decision.