September 8, 2023

Revolutionizing Higher Education: Adapting to the New Era of Learning


Jose Flores

Deloitte's report by Clark, Cluver, and Selingo suggests the traditional higher education model is outdated. Historically centered around faculty needs, this approach doesn't align with today's economic and social demands. Key flaws include misaligned tuition costs and over-reliance on middle-class high school graduates. To stay relevant, institutions should adopt student-centric models, focusing on diverse learners and innovative delivery methods, such as market-aligned certifications. The report urges institutions to evolve and adapt for a sustainable future in education.

In a recent report by Cole Clark, Megan Cluver, and Jeffrey J. Selingo, published by Deloitte, a pressing concern was brought to the forefront: the traditional business model of higher education is no longer sustainable. The insights provided in the report are both enlightening and a call to action for institutions worldwide.

The Outdated Paradigm

Historically, colleges and universities were structured around the needs and desires of the faculty. Academic majors mirrored departments, faculty set the curriculum, and the success of students was largely left to their own devices. This model worked for decades, catering to a specific audience. But times have changed. While top-tier institutions might still find demand, many colleges need to realign their business model to match the current economic and social realities.

The Two Fundamental Flaws

The Deloitte report pinpoints two primary flaws in the current model:

1. Misaligned Cost-Value Equation: Institutions often set tuition fees based on previous charges, inflation, and competitor rates. Rarely do they consider the actual cost of offering their education, especially at the academic-program level. Without understanding the cost and net revenue, institutions might miss opportunities for strategic cuts or fail to identify shifting demand.

2. Over-reliance on a Specific Demographic: The business model has been largely driven by middle-class and affluent high school graduates. While this demographic won't disappear, they won't spur growth either. Adult learners, who often juggle work, caregiving, and other responsibilities, present a different set of challenges. Many institutions lack the structures to support and retain these adult learners.

The Silver Lining: Opportunities Abound

Despite these challenges, there's a silver lining. By shifting to a more student-centric model, institutions can cater to a diverse range of learners at various life stages. With the economy needing skilled workers and higher education institutions needing students, there's a symbiotic relationship waiting to be tapped into. The key? Institutions must rethink their mission and structure. Many weren't designed for workforce development, and many faculty members don't see it as their role to ensure students land jobs. Yet, if some institutions can successfully navigate this shift, they might not only meet current demands but also improve the overall perception of higher education.

Innovative Delivery: The Way Forward

Outside of elite institutions, there's a pressing need for innovative delivery methods. This might mean challenging long-held beliefs in higher education, like investments in athletics or the assumption of 120 credits for a degree. There's an opportunity for institutions to offer competitive certifications and lifelong learning opportunities that align with market needs. Success in this area will require collaboration with faculty to redefine "workforce development." This includes both immediate technical skills and long-term "human skills" essential for a dynamic skill environment.

A Call to Action

The insights provided by Clark, Cluver, and Selingo in the Deloitte report are a call for higher education institutions. The traditional model is broken, but with innovation, collaboration, and a willingness to adapt, there's a promising future ahead. Institutions that rise to the challenge will not only survive but thrive in this new era of education.

Special credit to Clark, Cluver, and Selingo for shedding light on this important topic. Their dedication to bringing such issues to the forefront is commendable. To read the original report, visit Deloitte Insights.