What Do We Mean by Higher Education?

January 21, 2020

The Love Boat. Walmart. The electric company. They have nothing in common except they were the thread that tied together a week’s worth of engaging conversations.  

I started last week in Southern California at the College Board Colloquium, an annual meeting of admissions deans, financial-aid directors, and educators. On the way back from dinner with other speakers one night, the conversation among us GenXer’s somehow turned to cheesy television shows from the late 1970s and early 1980s.

What struck me was how we were all able to talk about a small set of TV shows no matter the geographic, gender, and racial diversity of our small group. Compare that to another conversation I had recently with friends about the shows we’re watching these days: there was little overlap, and when there was, we weren’t even watching the same season of a show. 

What’s happening: Fractured audiences are in large part the result of technology. Television. Movies. Music. Publishing. News media.

Why it matters: Higher education has largely avoided the fragmentation we witness in other sectors of the economy. For the most part, when Americans think of higher ed, they picture a big State U, a bucolic small college campus, or the community college down the street. Sure, they’re not the same, but in essence they’re like different flavors of ice cream to the general public.

But that mindset is beginning to change. The public is losing confidence in its monolithic view of higher ed. Half of Democrats and three-quarters of Republicans say higher education is “going in the wrong direction,” according to polling by the Pew Research Center.

What’s next: The splintering of higher ed is already happening. Remember, colleges and universities tend to lag trends in the broader economy by a decade or two.

• The “shadow learning economy,” which operates outside of the traditional norms of higher ed is increasingly taking hold across a spectrum of learners—who in the past might have gone to a community college or graduate school. 
• Think LinkedIn Learning, General Assembly, Coursera, and edX as players in this new learning economy. They have set the pace for continual learning, a trend I discussed in the last edition of this newsletter. 

Walmart

The latest crack in traditional higher ed is happening in the workplace. Employers have long offered tuition-assistance programs. But most of the programs are old and tired. 

? One big number: 60 percent of employers offer tuition benefits to their workers and spend nearly $28 billion on the benefit annually.

How it’s changing: Employers have long controlled how their tuition dollars are used. Now, they want more oversight in where dollars are used. It’s one reason we’re seeing big companies like Starbucks, Disney, and JetBlue partner with a select group of universities. But unlike under traditional tuition reimbursement programs where nearly every college got something from someone, under this scenario, there will be a small group of winners taking a bulk of the new business.

?Another big number: $1 billion-plus. That’s the valuation of Colorado-based Guild Education. It brokers deals between big companies and colleges for education benefits. That gives you a sense of how investors are thinking about this market.

Consider this: Even as companies partner with traditional higher ed on some facets of employee education, they’re also bypassing colleges and universities by establishing their own training schools. The dual investment in traditional, in-house job training and broader education with traditional colleges shows just how tight the labor market is right now and how quickly the world of work is changing.

Back to the future: Remember when higher ed complained that Corporate America abandoned training and wanted colleges to produce job-ready graduates. Now, employer training programs are making a comeback.

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Take Walmart, with 1.2 million employees, as an example.

• In addition to paying employees to go back to school for a degree, Walmart has opened more than 200 academies to train newly promoted workers and managers over several weeks.
• The academies are spread geographically throughout the U.S. and are connected to some of the best-run stores.
• Graduates of the Academy can turn their experience into college credits.
• Each Walmart Academy is certified through an extensive audit process, with more than 1,700 questions.
• Once certified, the academies get audited every quarter.

Consider this: In higher ed, once a college or university is accredited, it’s typically reviewed only once every decade.  

Experiential learning: Last week, I had a chance to visit a Walmart Academy in Arizona. The academy’s pedodogy is focused on “tell, show, do.”

• The Academy uses virtual-reality (VR) headsets to simulate real-world situations.
• I tried one, playing a customer picking up an online order at a store. While the experience was immersive—I felt like I was in a car and talking to a Walmart associate through my window—I’m still skeptical that the learning experience is any better for students.
• But Walmart officials say employers retain more that they learn with VR and test scores are 10% higher than with traditional training.

About that picture, above: It may look like a commencement ceremony at any college, but it’s actually the ceremony from a Walmart Academy in Las Vegas.

• Originally, Walmart planned to have a graduation ceremony only for the Academy’s first class. But many workers who completed the Academy never went to college. They hadn’t experienced the milestone of completing education since high school. The ceremony meant so much to them and their families. So now Walmart has a ceremony for every Academy session.

The electric company

Late last week, I interviewed the parents of a college sophomore about their daughter’s financial-aid package for a New York Times story I’m working on about “gapping.” I asked about their plans for their younger son.

“We don’t know where he’s going,” the father told me. “But there are so many job-training opportunities beyond college these days.”

He pointed out that the power company he works for ends up hiring many non-college graduates, trains them, and eventually gets them a college degree on their own terms.

The bottom line: Basically every economic study tells us college is worth it, yet increasingly the public seems skeptical about the value of a four-year college degree.

• Higher education as we traditionally think of it works for those students who complete a credential and take on reasonable debt to do so. But that's not the case for too many Americans these days: they don't go to college at all or they don't complete a degree even as they take out loans to attempt college.
• The fragmentation of higher ed may present more options for more students to get a quality education after high school—a necessity in today’s economy.

SUPPLEMENTS

In the latest episode of the FutureU podcast, Michael and I interview the co-founders of Edmit, a start-up advising company, about a financial modeling tool they created that projected how long hundreds of private colleges might stay in business.

Last year, on average, 41,856 fans went to games. That’s the lowest turnout since 1996. During bowl season, as games moved to neutral sites, the stands were so empty it looked more like spring football. Even athletic directors will openly admit it: College football is facing an attendance crisis.

In 2011, Lorain Community College in Ohio had a three-year graduation rate of just 8%. Now, it's 23%. How did they do it? 

Until next time. Cheers — Jeff

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