Colleges and universities have had the same business model for centuries and it is no longer sustainable.
In the prevailing business model, revenue is derived primarily from student tuition. The model is highly labor and human capital intensive while the degrees and services rendered are much the same as they were a century ago.
Costs are rising and funding sources are eroding. The sector can no longer justify to students or their parents increases in tuition at rates that far outstrip inflation. In addition, job prospects for new graduates, many of whom leave their alma mater with crushing student loan debt, are no longer bright and the value of education is increasingly called into question.
Many factors drive the spiraling costs of higher education:
While virtually every other institution in our society has embraced change, higher education has been reluctant to examine and refresh its business model. While some institutions have started to shift at the margins, the sector as a whole has been reluctant to create real change, geared to the needs of a new millennium. If higher education is to survive it must fundamentally reconsider its business model and begin to make necessary changes. This begins with changes in leadership.
Leaders, including presidents and boards, must be willing to: