That college you have your eye on for your teenager? It may be going out of business. Your alma mater, too.
Here’s why: we keep seeing reports that the financial model undergirding much of higher education is weak and getting weaker. The way colleges are financed is out of date with the demands of a much larger student population. Few people outside higher education are aware of this, but college and university leaders are deeply concerned.
As director of the Postsecondary Success Strategy at the Bill & Melinda Gates Foundation, I have spent the last year talking with chancellors, provosts, faculty, policy makers, and education technologists. Pretty much all of them recognize that higher education is at a tipping point, and that it will soon look nothing like it does today, except perhaps at a few ivy-covered, well-endowed institutions.
This is not hyperbole.
Bain & Co. looked at hundreds of colleges and universities  and found that about one in three is on an unsustainable financial track. “A growing percentage of our colleges and universities are in real financial trouble. And if the current trends continue, we will see a higher education system that will no longer be able to meet the diverse needs of the U.S. student population in 20 years.”
The report found that, at a time when college revenues and cash reserves are down, too many institutions face bigger debt service bills and ever-increasing expenses. Colleges were once able to make ends meet with annual tuition hikes, new fees and by securing more government support. Those days, though, are gone. Too many students now must borrow heavily just to keep pace with tuition increases, and government coffers are bare.
Last summer Inside Higher Ed and Gallup surveyed campus chief financial officers on their thoughts on the sustainability  of their higher education institutions. Only 27 percent of them expressed strong confidence in their institution's financial model over the next five years. When asked to consider a 10-year window, the number expressing strong confidence in the financial health of their institutions dropped to 13 percent.
Improvement is needed on the academic side, as well. Data shows that our higher education system currently serves only about a third of students well, any most of those come from generally well-off families. Institutions of all types–two-year, four-year, public, private and online–need to adapt to the realities of today’s students even as they grapple with shrinking resources and increasing demand.
Only one student in four graduates from high school ready to succeed in a postsecondary program. Too many of the rest end up stuck in remedial programs that drain their resources and don’t prepare them to successfully complete postsecondary coursework.
Many of these students are from low-income families, or they are older, juggling life, jobs, and family as they pursue their educations. They are often first-generation college-goers who lack the support and guidance crucial to navigating the thicket that is higher education. As a result, too many students end up leaving college with a lot of debt but no degree.
We used to call these students “nontraditional.” Now they are the “new majority.” And their struggles were highlighted recently in data released by the Organization for Economic Cooperation and Development  that showed U.S. adults have below average literacy, math and problem solving skills when compared to their peers in the world’s richest countries. We have to make the system better for these students — but how?
Technology is often looked at as an answer. Yet, it has to be more than just bolting new technology on an antiquated platform. Technology-driven innovation has the potential to help colleges and universities address some of these challenges while helping faculty do their jobs by helping them offer students more personalized instruction and academic support. Done thoughtfully and well, technology can help faculty provide a more personalized learning experience for their students and ease some of the financial pressure on colleges and universities.
Today’s students need highly personalized coaching, mentoring, and other supports tailored to their individual needs and goals. Technology holds huge promise for making this kind of personalization possible by enabling colleges to effectively target the most costly and most important aspect of any education – the interactions with instructors and advisors.
Too often, we are debating the wrong things about technology and higher education. For example, we can’t just compare online or in-person classes. We need new business models that include technology and allow colleges and universities to put scarce dollars where they matter most. For today’s student, what can make a big, positive difference is access to an education tailored to their needs, their learning styles, and their goals, with appropriate coaching and advising.
Look at the State University of New York, which plans to add 100,000 new students over the next three years through its Open SUNY initiative. It will make online classes at each of its 64 campuses available to all of the system’s 468,000 students. Personalization will be an important part of the initiative, combining on-site and online academic support. Arizona State University, for its part, combines face-to-face learning, hybrid classes, and online instruction to increase enrollments, even as it faces severe physical space limits.
The cause is urgent. For higher education to fulfill its historic role as an engine of social mobility and economic growth, we must continue to seek big technology breakthroughs. This means thinking creatively about how to serve students as individuals, while also ensuring that many more students get the learning opportunities they deserve.
This might sound paradoxical, but investments in education technology will be increasingly crucial to humanizing and improving the student experience. And it might just keep your alma mater – or your child’s future alma mater – in business, and more purposeful and student-centered than ever.