Do Elite Universities' New Credentials Threaten Regional Colleges?

Nondegree programs, university business models and the imperative to create a different sort of master’s degree.

August 8, 2018
 

The higher ed business model is actually pretty terrible.

Unfavorable demographic trends are causing enrollments to drop, particularly in the Midwest and the Northeast. To entice students, schools must discount tuition by an average of 50 percent.

Productivity gains are hard to come by in a people-centric business that is more craft than platform. The cost disease is real, and it hurts.

The one higher ed bright spot has been the master’s degree. Particularly professional master’s degrees.

Should colleges and universities be worried that alternative credentials, including professional certificates, are set to crack the golden master’s degree egg?

Will platforms that offer low-cost alternative credentials, such as Coursera and edX, end up cannibalizing the master’s programs that so many schools depend on to balance the books? Are we going to see a movement away from demand from entry into master’s programs from regional institutions, and toward enrollment in nondegree online programs from institutions with the most recognizable brands?

First, some background:

In my lifetime (I was born in 1969), the number of master’s degrees conferred every year by U.S. institutions has gone from just over 200,000 to almost 800,000 today. The most popular master’s degrees are in business (24 percent), followed by education (19 percent), health professions (14 percent), engineering (7 percent) and public administration/social services (6 percent).

As Jon Marcus details in an article for the excellent Hechinger Report, master’s degrees have "become a cash cow for struggling colleges." The amount of tuition discounting and financial aid that schools offer for master’s programs is much less than for undergraduates. Only about four in 10 master's students receive any institutional financial aid, half that of undergraduates.

So master’s degrees matter a good deal for both tuition-dependent private institutions and state schools that are navigating public disinvestment.

We are also witnessing the acceleration of the transition from residential to online/low-residency master’s degrees. Graduate students are more than twice as likely to be enrolled in fully online programs (26 percent) as undergraduates (12 percent). While total enrollments have declined since 2012, from about 21 million to 20 million, graduate enrollments have remained more stable. (At least up until 2016.) The number of graduate students -- mostly master’s students -- whose program includes at least some online learning has increased from 865,000 to 1.1 million.

A few top 20 name-brand master’s programs will persist in being able to stay residential. The rest will move toward online. This is not a question of if, but when.

What is going to happen to all those business, education, health, engineering and public service master’s programs when a prospective student can get a professional certificate from an elite university? Are we headed toward a time when employers value the signal of an alternative credential from a top school as much as they do a master’s from a regional institution?

Does this mean that the master’s programs from schools without a fancy brand name are doomed? Will elite institutions be able to offer a compelling nondegree learning experience, as these schools begin to achieve mass customization through new AI-driven adaptive learning platforms?

Will the entry into the nondegree space of deep-pocketed OPM companies such as 2U, after their acquisition of GetSmarter last year for $103 million, accelerate the move of top institutions toward the nondegree space?

The answer is that if colleges and universities wish to keep relying on master’s programs to fund everything else (meaning undergraduates), then they will need to change how they think about graduate education.

The best road map that I’ve read recently about making that change comes from Chris Dellarocas, associate provost for digital learning and innovation at Boston University, in his piece on this site entitled "Higher Education in a World Where Students Never Graduate."

Chris's piece is so well written that it is worth extensively quoting:

There is one fundamental difference between news and education. Whereas news is based on content, education is fundamentally a complex set of relationships that encompass content/knowledge, mentoring and community. Whereas content can be commoditized, good relationships tend to be sticky and hard to replace.

A university’s strongest asset is the deep bond that we form with our students -- through our faculty, guidance counselors, student activities organizations, corporate partners, career counseling consultants and alumni organizations. These relationships are built around course work, of course, but also include a substantial amount of mentoring and life coaching, as well as immersion in campus activities and peer networks. We do a reasonably good job of offering such a multifaceted life-changing experience to our undergraduate students.

At the graduate professional education level, however, many universities seem to forget that we are in the relationship business and behave as if we are simple content/knowledge providers. We charge students for course credits. We advertise our graduate programs essentially as if they were products. When our students graduate, we bid them farewell and subsequently contact them primarily for donations. This transactional way of thinking and acting leaves universities vulnerable to disruption.

Relationships will be the one thing that even the best adaptive learning platforms (personalization and scale), from the most well-known institutions, will not be able to scale. The future of a master’s degree will be more like a lifetime passport than an a one-time credential. Master’s graduates will need to have access to educational opportunities, mentoring and career coaching throughout their working lives.

Colleges and universities can no longer think of a master’s student as someone who comes for one or two years online or in person to get the degree. They will be more like offspring. Chris calls them foster children, which is what the Latin “alumnus” means. Who knew?

The challenge will be evolving our schools so that they are about relationships rather than content, and then communicating that new value proposition to potential students.

Relationships will be the most important idea, concept and challenge for higher education in the 21st century. Forget big data. Forget analytics. Forget AR and VR. Think about relationships.

Is your school or program moving toward a lifetime education model for your master’s students?

What does a shift to thinking about providing access to relevant educational, networking and community opportunities for graduates actually look like in practice?

Read more by

Back to Top