News & Commentary

This Challenging Time is the Right Time to Innovate in Higher Education

A new business model for higher education is inevitable. Let’s take advantage of this moment to transform our system for the better—for sustainability, equity, and student success.

The COVID-19 pandemic has upended colleges and universities across the country, but this crisis may also be a catalyst for positive change. The need to convert to almost entirely virtual course offerings, respond to students’ needs and changing college plans, and adjust to budget shortfalls, all at a frenetic pace, placed enormous burdens on California’s public postsecondary institutions, but also led to a growing acknowledgment by system leaders and the public that higher education’s basic business model needs to evolve. This concerns education (teaching and learning), delivery, and financials.

Higher education institutions have faced external challenges before, including the lasting effects of the Great Recession of 2008, but the disruptions brought on by the pandemic and subsequent economic crisis are unparalleled in scope and depth.

Consider the challenges

Reduced revenue: At a time when California’s public and private postsecondary institutions are confronting major revenue declines, they must also redirect massive resources to support freshly urgent priorities, such as professional development, health, and safety.

Technological changes: The proliferation of new tools for teaching and learning beyond the traditional classroom carry with them a learning curve for faculty, administrators, and even students who are otherwise digital natives. Students with less access to tech tools and high-speed internet are often further disadvantaged by these shifts. Still, new tools present opportunities for all involved alongside these challenges, including the potential to enable business model alternatives.

Students’ shifting college plans: In response to the recession, virtual learning, health crises, and the pressures of home and work responsibilities, many students are shifting their college plans. Low-income students are most exposed to the pressures of difficult tradeoffs, as the need to work to cover living costs such as rent or childcare crowds out educational and career prep plans. Many are choosing to delay their education, enroll in educational institutions other than those they initially planned to attend, or consider short-term certificate programs offered by private providers. As students experience the convenience and flexibility of online instruction, some are questioning the value proposition of a residential college experience. The enrollment patterns of this year reflect the deep, persistent inequities in our society.

Competition: More institutions based outside of California have increased their marketing here with the promise of more accessible and affordable options for students learning remotely. Meanwhile, employer-based academic programs are filling a desirable market niche for those seeking to accelerate upskilling and credentialing.

Now consider the opportunity

Disruptive innovations are well understood by California’s business and technology leaders. Markets change and new models replace the old. If higher education leaders, stakeholders, and policymakers meet this moment thoughtfully, we can make the most of the pressures and changes accelerated by the pandemic and transform our higher education system to be truly sustainable, equitable, and student-serving.

At College Futures Foundation, we think the time is ripe to explore ideas for a new business model for public higher education—one that reimagines how educational methods and experiences, delivery, and financing can deliver students to their goals in an accessible, affordable, and timely way. Indeed, system leaders and policymakers mobilized quickly to continue providing education and services during this unprecedented time. Given the scope and duration of some of these changes, this sector may be ready to embrace innovations in the basic business model so that every student regardless of race, gender, age, income level, location, or educational aspiration has access to a more affordable and effective educational pathway.

We enter this exploration of business model alternatives with openness, rather than a preconceived expectation for where it may take us. As always, we are guided by our core principles and values, which are to align ourselves with what is in the best interest of students—especially the low-income students and students of color who are underrepresented in higher education and higher opportunity careers—and to approach our work with a commitment to equity, courage, community, and curiosity. We are energized by the new thinking and creative approaches being advanced by higher education leaders and champions, and we further welcome your ideas, passion, and partnership.

As California strives to move forward from the pandemic-induced recession, business and public sector leaders are increasingly recognizing connections between education, equity, socioeconomic mobility, and the economy. Higher education is vital to our economic recovery and a more inclusive future. As a state, we must plan now and provide for the innovations necessary to realize the potential and responsibility of that role. This is our window of opportunity to rethink how higher education is organized—and for whom. We must act while it is open.

We look forward to taking up this important conversation with our partners and grantees in the year to come. In the meantime, we wish you health, happiness, and hope.

Monica C. Lozano
President & CEO
College Futures Foundation
Russell Gould
Chair of the Board
College Futures Foundation