The Future of Higher Education - 8

Part 2: Changes Within Academia
Now we shift our exploration of higher
education's future to developments within our
sector.
CAMPUS ECONOMICS
Generally speaking, American higher education
is becoming more privatized. Roughly one-third
of our institutions are private, and hence are
entirely dependent on a mix of student tuition
and fees with alumni and donor support to be
sustainable. About two-thirds are technically
public universities, which is to say financially
supported by state governments, but the amount
of state funding has fallen steadily over the past
40 years, typically amounting to only a minority
of a campuses' revenue stream. This has led
" public " institutions to turn to private solutions:
increasing tuition, donor gifts, and various
partnerships with businesses. Additionally, a
volatile number of American schools are forprofits,
and therefore private as well.
One side effect of privatization has been the
boom in student debt. As public dollars fell
and prices rose, students have increasingly had
to take out loans in order to pay for classes.
The total amount of student debt now stands
around $1.7 trillion, larger than any other source
of American debt beyond home mortgages.
Obviously this impacts how colleges and
universities work, starting with encouraging
students to see post-secondary learning as more
of a financial transaction, as well as to seek out
degrees in higher paying fields.
A second aspect of campus finances is not so
well-known as the notorious student debt issue.
We mentioned rising prices to attend college,
but those are published, " sticker prices. " In
reality colleges and universities often discount
that full price through grants, scholarships,
work-study, and other programs. They do this
in order to attract students for various reasons:
demographic identity, star athletes, geographical
representation, etc. The amount of that discount
has soared since 2000. Indeed, the median
amount people actually pay for college (as
opposed to the sticker price) is now below 50
percent of the total. There are questions as to the
sustainability of this unusual financial structure,
but it remains widespread and the discount rate
seems likely to continue rising.
ENROLLMENT
While the privatization trends occurred, the
total number of American college and university
students rose steadily, starting in the 1980s,
rising through the 1990s and 2000s. American
culture seemed to share a common belief in
" college for all, " that everyone would be better
off if everyone obtained more college experience.
That long boom then peaked around 2012.
5
Part 2: Changes Within Academia
Part 1: The Global Context
The Future of Higher Education

Table of Contents for the Digital Edition of The Future of Higher Education
