The results of the annual survey of college freshmen, released this week by researchers at UCLA, confirm that the fragile economy continues to weigh heavily on the minds of today’s students. Since 2006, freshmen have listed getting a better job as the most important reason to go to college, and this year, 88 percent of them said so, an all time high.
Previously, first-year students had said that learning about things that interest them was the number one reason to go to college. Nearly 3 in 4 students now say that making more money is a very important reason to go to college.
It’s no wonder that economic concerns now dominate the discussion about the value of college. List prices for colleges continue to rise as the incomes of Americans lag. The median net worth of American families hasn’t been this low since 1992, so tuition is eating up a greater share of income, now nearly 38 percent of median income, up from 23 percent in 2001.
Sure, more financial aid lowers the list price for many students, but the current model of tuition discounting does not seem sustainable for a large swath of institutions. Six in ten colleges report flat or declining net-tuition revenue, meaning that they are giving away just as much or more in financial aid than they have in the past despite raising their tuition prices.
For those that don’t play that game, they often report lower enrollments because students decided to go to a college that did play the game. As one admissions officer at a small private college told me recently, the news reports about rising financial-aid packages in tough times have persuaded even the wealthy that they are needy. “Everyone is asking for more money,” she said.
What to do is the question college leaders are asking in many places. Beyond cutting costs and paring back programs (which some colleges are trying to do), others continue to take on debt while they figure out ways of bringing in new revenue streams. But Moody’s, the ratings agency, is skeptical that colleges have figured out a solution. It recently issued a negative outlook for the entire sector, including big research universities (which had been saved from such negative outlooks in the past).
Some will continue to hope that the good old days will return. But many others are beginning to think of different ways to structure their degrees and academic programs or communicate their value to students in a crowded marketplace. Three universities, Northern Arizona, the Wisconsin system, and Southern New Hampshire, are unveiling degrees this year based on competencies rather than time spent in a seat. The idea is that if a student already knows something they should be allowed to move on to learn what they don’t know. The self-paced programs are, for now, focused on time-pressed adults.
Other colleges are looking for ways to prove their value to families, by adding programs or initiatives that further tie their education to skills needed to succeed in a job or by being more transparent about student outcomes.
Westminster College in Utah now requires all students to build an electronic portfolio of their work to show to prospective employees. St. Olaf College has created a rich database of what its recent graduating class is doing. Wake Forest University makes career planning part of the curriculum from day one on campus. Several institutions, led by the College of Wooster in Ohio, have now made undergraduate research a required component for a degree with the idea that such projects teach students the critical thinking, synthesis, and communications skills needed in today’s job market.
Such efforts to improve the “product” seem a better path forward than simply hoping the good days will return. The price of tuition is too high these days for institutions to simply tell prospective students and parents to put their trust in the value of that college’s degree.
Photo Credit: Forbes