Nexus

Drake University

A Note
From Dean Joe Alber

Competitive Forces in Higher Education

During the golden age of radio, there was a show called the "Halls of Ivy" starring Ronald Coleman. The show was about a small college in which everyone lived in harmony with each other and with the world around them. Every student could afford school. All the athletes were scholars. The world beyond campus was immaterial and frozen in time.

Some elements of the show still ring true. Many students can afford school, but for some this is only possible because of generous and caring donors. But the world beyond campus is not frozen in time. It is rapidly changing.These changes bring with them significant challenges to higher education.

These challenges come from many quarters. More minorities are attending college and they often have different needs and expectations. Upwards of 50 percent of the senior faculty teaching in colleges and universities will retire within 10 years. A recent study found that almost every institution spends more to educate an undergraduate than it charges for tuition. Maintaining a technological infrastructure to support students and prepare them for the world of work is a constant battle. There are many other challenges confronting higher education, but the one that surprises many alumni is the new set of competitors after the same students.

Principal among these competitors are the corporate universities, Internet-based programs with quasi-institutional standing, and for-profit schools with multiple sites. Corporate universities are educational programs operated as an arm of an existing business. General Electric, Motorola and Disney are three examples of businesses with programs. Corporate universities have been around since the 1950s, but the number has increased dramatically in the last 10 years. Many of these programs are pursuing formal accreditation from standards-setting bodies.

In the last five years a new competitor has arrived on the scene. This is the Internet-based program delivered by other colleges or universities and by a set of questionable entities. Geography used to be a wonderful barrier to competition. In order for another institution to compete directly, it was usually necessary to physically establish a local market presence. That is no longer true. There are excellent institutions who deliver degree programs, but there are also entities who are able to sell their services through the anonymity of the Internet and provide a low quality experience.

The third major competitor is the for-profit organization.There are thought to be about 650 for-profit institutions operating today. These are aggressive competitors who usually operate out of rented space and do not establish a traditional campus with its attendant costs.This model keeps costs low. The quality of the education provided varies tremendously and the learning environment lacks many of the educational amenities found on a traditional college campus.

Higher education is not immune from the same changes you see happening in your personal and professional life. Like you, we are working hard to prepare for the future. The University went through a thorough program review last year resulting in numerous changes throughout campus and the College has made significant curricular revisions to many of its programs. Other steps are being taken, but one of the most crucial factors in the future success of the college is the continued involvement and financial support of our loyal alumni. I hope we can continue to count on you.

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