The Looming Crisis In American Higher Education

Clayton Christensen and Michael Horn, writing in the latest issue of Harvard Magazine, discuss the current and looming crisis in higher education

For much of the past century or so, higher education in the United States has been considered the best in the world.  But is this still true?  And if not, what are the challenges our nation will face going forward?  Who better to grapple with these important questions than Clayton Christensen and Michael Horn.  Dr. Christensen is a professor of business administration at Harvard, and Mr. Horn runs a nonprofit education think-tank.  The two of them co-wrote this recent article in the July-August issue of Harvard Magazine.

America’s colleges and universities, for years the envy of the world and still a comfort to citizens concerned with the performance of the country’s public elementary and secondary schools, are beginning to lose their relative luster. Surveys of the American public and of more than 1,000 college and university presidents, conducted this past spring by the Pew Research Center in association with the Chronicle of Higher Education, revealed significant concerns not only about the costs of such education, but also about its direction and goals.

The quality of America’s colleges and universities has been judged historically not by the numbers of people the institutions have been able to educate well, but by their own selectivity.  This is most readily observed in the quality and preparedness of the students they have admitted. Those institutions that educated the smartest students, as measured by standardized tests, also moved up in the race for money, graduate students, and significant research projects, which in turn fueled their prestige still further, as faculty members at such schools are rewarded for the quality of research, not for their teaching.

More fundamentally, the business model that has characterized American higher education is at—or even past—its breaking point. Many institutions are increasingly beset by financial difficulties, and the meltdown since 2008 is but a shadow of what is to come. Undergraduate tuition has risen dramatically: at a 6.3 percent annual clip for nearly the last three decades—even faster than the much-decried 4.9 percent annual cost increases plaguing the healthcare industry.

The full increase in the price of higher education has actually been hidden from many students and families over the years because gifts from alumni, earnings from private university endowments, subsidies from state tax revenues for public universities, and federal subsidies for students have been used to mitigate some costs. But, Christensen and Horn argue, universities are exhausting these mechanisms.

The emerging online universities fit the pattern of a disruptive innovation for higher education. Not only did they get their start as simple products and services, they started by serving those who were overlooked by or could not access the typical colleges and universities.  This was done, in large part, by making education far more convenient. Now online learning is beginning to improve and serve more demanding customers. But, the writers state, this transition is still early.  The country’s higher education policies have given little incentive for this transformational behavior.  Instead, government policies have continued to emphasize access to a higher education regardless of quality and true cost, which they believe has held back the evolution.

Read the full article by Christensen and Horn here.