How to redefine the value proposition and ROI for higher education
Despite the growing cost of higher education, data continues to demonstrate that the benefits of a university degree outweigh its disadvantages.
For example, in the U.S., bachelor’s degree holders are half as likely to be unemployed and make $1.2 million more over their lifetime than those with just a high school degree. Additionally, the employment rate of 25 to 34-year-olds was higher for those with greater levels of educational attainment (86% for those with a bachelor’s or higher degree compared to 68% for high school graduates and 75% for those with some college but no degree).
Yet, higher education institutions are still facing evolving student sentiment. To address this, institutions need to consider rethinking the way they measure and market the value of their academic offerings to prospective learners.
"The only strategy more expensive than college is not going to college.”
Why has the perceived ROI (return on investment) of higher education declined?
Over time, the value and perceived benefits of post-secondary education have undergone many changes – and especially over the past few years. The number of Americans who believe that obtaining well-paying employment only requires a high school diploma or equivalent has jumped from 50% to 64% since 2018.
Moreover, with a globally unstable economy, people all over the world are feeling the burden of financial responsibility, and that very much includes taking on and/or paying off student loans.
The price for four-year colleges and universities have increased substantially over the past decade. In the U.S., the average cost of college has more than doubled in the 21st century, with the current amount sitting at $35,551 per student per year. In Australia, university fees have hiked up 6.3% in the first quarter of 2022 alone, with the average student debt sitting at $23,685 per year in 2021, up from $8,500 in 2005.
It’s no wonder that, given rising costs, students have begun to report a drop in their likelihood of attending higher education.
Instead, many students are choosing to pursue vocational education (trades) that require less education, less cost and less debt than traditional higher education degrees. For some fields, a certificate or associate’s degree is enough to earn a good living; in the U.S., a student who holds a one-year computer certificate can earn up to $72,000 a year, while the average bachelor of arts degree holder may only net $54,000 a year.
These global financial doubts mean that all institutions need to ensure they are proving, communicating and updating the value and ROI of their offerings to students year-on-year.
"An enrollment problem is an existential problem. Institutions that understand how to use data to dynamically address, and even proactively avoid, enrollment issues will become more resilient.”
What are students looking for in higher education?
One of the key attributes students are looking for in higher education is a degree that leads to employment success.
Nearly three-quarters of Australians say a university education improves career prospects and nine out of 10 want tertiary education to be constantly updated to meet changing workforce needs.
Employers echo this desire to see university graduates with more precise and valuable skills. Globally, 58% of employers say that closing skills gaps in their companies’ workforces have become a higher priority since the pandemic began. Yet, business leaders have doubts that higher education institutions in the U.S. are graduating students who meet their particular businesses' needs – only 11% strongly agreed that college graduates have the skills – such as applicable knowledge and applied skills in the field – that their businesses require.
Students want an education that meets them where they are. Even with most universities resuming in-person learning, many are still continuing and/or expanding their remote learning options. According to Cengage’s Digital Learning Pulse Survey, 68% of students say they would prefer a hybrid learning option.
The “traditional higher education student” – one that attends a multi-year degree in-person and on-campus – now describes only one segment of the university population. The number of students accessing and enrolling in online courses have increased exponentially since the onset of the pandemic. Online learning platform Coursera recorded 20 million new student registrations in 2021 – the highest growth of new online learners ever. The Australian Bureau of Statistics reported an increase in Australians aged 15-74 years of age completing their work-related training online. The proportion of those undertaking their work-related training online rose from 19% in 2016-17 to 55% in 2020-21. During this time, work-related training in a classroom dropped from 69% to 37%.
How are institutions demonstrating value to learners?
Institutions are rethinking the way they measure and market the value of their academic offerings.
“In 2020, we released a paper about a new way of evaluating institutions of higher education,” says Michael Itzkowitz, senior fellow in higher education at the center-left think tank Third Way on a recent episode of The Key podcast. “We were looking at the cost students pay out of pocket to obtain a specific credential, relative to the earnings boost or premium they obtained by attending a specific college.”
According to Itkowitz, learners are using this information to determine the actual ROI of their degree; that is, what is the cost they’re paying relative to the earnings boost they’re obtaining?
This information can also be incredibly useful to colleges and universities, as well. “We’ve also heard from institutions starting to understand that the data is there and showing an interest in the program-level data in terms of how they improve their programs and all of their offerings writ large,” says Itkowitz.
When considering closing any potential skills gaps that may exist within its full curricular offerings, institutions are adding more skills-based competencies, such as competency-based education (CBE) and micro-credentialing programs. A recent survey found that 86% of institutions are interested in or have CBE programs in place.
To demonstrate the value of their programs – whether micro or macro – many institutions are including more alumni profiles on their websites and in their marketing materials. These kinds of storytelling pieces offer the ability to go beyond outcome facts like placement rates or average salaries, instead showing how a person’s degree and experience has impacted their whole life in positive ways.
Another smart way institutions are appealing to the career question from learners is by aligning their program offerings with employer and labor needs. According to McKinsey & Company, some of the largest anticipated skills gaps over the next several years include:
- Advanced data-analysis and mathematical skills
- Complex information processing and interpretation
- Advanced IT skills and programming
- Leadership and managing others
- Critical thinking and decision making
- Adaptability and continuous learning
Institutions can get their share in this marketplace by considering their existing strengths and their key markets – demographically and geographically – to see how they can help prospective students gain the skills they need to embark on their career pathway of choice. “Institutions need to think about where they will play and how they will win,” said Julie Mercer, university consultant and principal at Nous Group (UK), during our recent micro-credential webinar.
For added flexibility, many institutions are recognizing the importance of more digital offerings. The bottom line? Institutions must get on board with digital transformation to support and expand their remote learning options.
How curriculum management systems supports innovation and student success
As a part of adding these digital programs, “administrators shared that their institutions are taking steps to build long-term flexibility into course design, facility design, student support, and remote work due to their experiences during the pandemic,” says the 2022 Online Education Trends Report.
A powerful part of creating and managing programs to stay in front of student demand is a robust curriculum management system, which supports curriculum innovation by streamlining the process for creating and governing new courses and programs.
Because a curriculum management system offers an easier, more efficient way to design and manage curriculum, academic staff in turn have more freedom to create more relevant offerings based on current research and employer and student demand.
By adopting and leveraging a robust curriculum management system, institutions can not only add skills-based courses and micro-credentials to fill current needs, but also balance these offerings with their longer, traditional degree programs.
Curriculum management platforms with advanced curriculum mapping functionality enable whole-of-program visibility, allowing faculty and administrators to visualize the relationships between curriculum elements and highlight any gaps and/or redundancies.
By incorporating more skills-based courses and programs and reacting to post-secondary learners’ desire for career outcomes and flexibility, institutions can continue to make a valid case for the value of their academic programs.
CourseLoop is an end-to-end curriculum management software built to create better solutions for today’s students, administrators, and academics.