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.

The new mindset on Institutional Research Intelligence (IRI-Analytics) was developed in 2010, and it was first introduced to the public a little over 5 years ago on October 7, 2012 by the Association.  The new paradigm or concept of managing higher ed did not come out-of nowhere.  Rather, it was developed based both qualitative and quantitative analyses applying real world and publicly available data & observations, test hypotheses and statistical analyses.  We are glad that we can:

1. See what is coming.
2. Develop and share what we know with the American public.
3. Make US Colleges and Universities aware of what are coming their ways.
4. Have created a new and applicable mindset and, as a result a new industry/profession.
5. Have introduced this concept such that many higher ed institutions start setting up their store and offer this program years later.
6. Have helped private industry to mine the new business.

Needless to say that since it was first introduced, the world of institutional research has moved to the next level, and younger and new breed of professionals have moved forward and left behind the old way of doing business i.e., from reporting to analyses.  However, some old school boys are still working BAU, and it may take awhile until demand for IRI-Analytics are saturated.  While many institutions are scrambling to fill the gap, and try to take advantage of the opportunity, the new IRI paradigm has moved to the next level.

Given the increasing uncertainty in higher ed, due to ever changing public policies in higher ed, the first generation of IRI will no longer produce/generate the optimal results.  Therefore, a little over one week ago, the Association have introduced the second generation of IRI-Analytics where stochastic simulation will be the backbone of it.

As the IRI (Institutional Research Intelligence) paradigm evolves overtime, it is important to note several changes to those who are planning to enter the profession.  Certain new skill sets are required even to move from traditional IR to first generation of IRI which is Education Analytics.  Among over 6000 higher education institutions in the US, only a handful have adopted and adapted their cultures to the new reality.  However, majority of them are still operating with the old reporting/BAU mindset.  Perhaps, the following are the reasons why:

1. The top guys (administrators) may not have a clear understanding of the new competitive environment and how to deal with it strategically.
2. Safety first and yes-man attitude, lack of initiative, and choose to be a follower.
3. Campus culture, self-interest & status quo.  Making decision based on majority votes, instead of data-driven.
4. Cannot find the professionals who have the skills sets to run the shop.
5. Cannot afford to pay the right price for the right person.
6. Making changes are too difficult and cumbersome, and maintaining the status quo is much easier.
7. Relied on piecemeal canned software which may not be able to facilitate integration of the entire system.
8. Incomplete data problems.  Employees are not trained properly to enter/input information correctly.  Afraid to enforce such important aspect of data integrity.
9. Instead of teaming-up, power struggle between the IT and Analytics Unit.
10. Lack of statistical background for those who run the shop, but they want to grip the position despite lack of training, experience, knowledge and skills.

On November 13th, 2017 we wrote an article on our Blog which further analyzed the possibility of what had happened in CT, will occur in other states too.  We all are aware what has happened in the State of IL.  Budget problem, among other factors has made the institutions’ risk to go under to accelerate.  This morning we learned that IL’s legislators were taking steps to lower the rate of students’ fleeing to attend out-of-state institutions.  One of the reasons why prospects attended neighboring institutions is because of cheaper tuition and fees, which we have stated in point#2 and point#5 in our Nov 13th and past articles.

If things do not change quick enough, perhaps there will be a possibility that the State will follow the what has happened in the neighboring state.

As we have discussed before, offering a cheaper tuition is a game changer strategy.  It boils down to efficiency, and this strategic issue can only be solved using the second generation of IRI as we have mentioned yesterday.  Inefficiency will be the best strategy to adopt if institutions plan to accelerate its end-day.  This dynamic shows that competitions have shifted from I-to-I (among institutions) to S-to-S (among states).  Our prediction shown that the state of TN has the comparative advantages especially near Nashville (middle TN) areas, and may attract more out-of-state students to study and to stay in the state after their graduation.  Three reasons support this testable hypothesis (1).  State’s financial aid programs; (2). Plenty job opportunities and (3). No state income tax.  Go Vols.

Uncertainty clouds higher education institutions in many ways that never been happened before. For examples, reduction on federal student loans and aids along with treating any scholarships received by students as income have brought multiple forces which will, at least theoretically reduce demand for higher education services. The new administration’s policy in higher ed can be summarized into one sentence which is reducing student loans debt by controlling/affecting buyers’ purchasing power i.e., the ability to acquire higher education services. Controlling the ability to finance one’s education is an effective way to control the student loans debts.

College and universities have to understand that the current new administration policy is caused by their (Higher Eds) actions and past policy which took advantage of cheap Loan (money) policy to the extreme level by increasing college tuition uncontrollably and reckless spending which have caused the national student loans to reach a new high level (reported in Sept, 2017) of $1.45 trillion or higher. Recent changes were just reactions to past colleges’ policy. During the “golden era”, most decision makers’ report card will be based on how many new buildings are built or planned to be built. But, now, instead of tangible assets their performance will be based on something that are more intangible such as retention, completion and student loans default rates.  And now they, the Colleges will be judged on how bad is their waste function, how high their customers’ satisfactions is or/and how low their tuition is and how efficient they are?

In line with this new reality, US higher education organizations cannot just use the old approach to navigate the sea of competition. Even, applying the first generation of IRI–Education Analytics will no longer yield the optimal results. There are many institutions which may not at the second stage of the evolution map yet. Some have tried to move to second stage through data visualization (not data analytics–applying software such as Tableau and other canned softwares). It requires at least five to 8 years to move from one stage to the next.

Given increasing uncertainties, we have suggested institutions to move to the second stage of the IRI. This stage will be championed by applying stochastic simulations on every aspects of institutional’ s metrics such as cost, pricing, HR, promotion, tenure practice, enrollments and others. It required the institutions to change their culture.

The Association has completed and reported research results on the survival of US Colleges and Universities back in 2013.  As shown, this institution has 2 Bs in its report card.  Three years later, the DOE followed what the Association has done by announcing financially troubled higher ed institutions, including this institution.  Therefore, we are not surprise to read the report today on college restructuring and reorg.  This news was not surprise us.  However, we were surprised by (1). How slow troubled colleges make urgent changes and (2). How ignorance these colleges are on making strategic decisions based on data-driven research results.  Our research results have pointed out the possible of college closures.  In the past few weeks, we have discussed the wave of college mergers, and reorg in our Blog which we have mentioned, predicted, and shared many years ago.  If state-owned higher education institutions are facing tremendous challenges to be around, what would one expect the survival rate for tuition dependent institutions?  One important lesson which can be learned is that if your college’s rank not in triple As, it means the risk is going under is high.  So, why not take advantage of our free research results for your own good?

A couple of weeks ago, the Association has written in its blog of the first-type of possible merger among the state owned higher ed institutions which rarely has been happened in the past.  Well, WI set the example how declining resources have directed state’s policy on higher ed.  This morning we learned the first case of a-larger merger within state owned higher ed organizations.  This merger policy has never been imagined will ever be adopted by a state.

It takes a great wisdom to be able to see what is coming, and some of the elements of this wisdom are coming from data analytics, and may not come from data visualization.  After WI, which states will be next?  Practically any other states are likely to start adopting this policy, in particular where:

1. State-wide student enrollment is declining.
2. Sate budget deficit (i.e., IL).
3. Dropping international student enrollment.
4. Too many higher ed institutions offer the same type of services (CA, FL, NY, TX just to name a few of them with the exception in MA)
5. State-wide average tuition is higher than what schools in other states are charging.