The end of the master’s degree as we’ve known it?
2U’s stock plunged last week after its executives announced some business changes in response to shifts they were seeing in the market. Lots of higher-education leaders and faculty members should be paying attention to that, even if they don’t care about the future of OPMs, or even know what those initials mean.
I say this not because of the stock — frankly, I don’t understand why the price of this online-program manager dropped from about $36 to under $14 in a matter of hours. After it spent more than $850-million over the past two years to buy companies that offer professional education and run coding boot camps in conjunction with colleges, 2U investors could hardly have been shocked over the company’s moves to diversify from a reliance on contracts with universities for master’s degrees. (Certainly, 2U’s intentions were clear in the interview I did earlier this year with its chief executive, Chip Paucek.) If the investors were surprised, that’s their problem.
Colleges face a more challenging one, especially those banking on their non-undergraduate programs to buck up their bottom lines: 2U’s moves are one reflection that interest in the traditional master’s degree is dwindling. That means, as several experts I spoke with last week noted, institutions need to get busy developing programs that take on a different shape — and that cost less.
“The rate of growth in master’s degrees is starting to slow,” Carla Hickman, an executive director at the consultancy EAB told me. While master’s degrees still retain their primacy in “the big four” fields of health sciences, engineering, business, and education, Hickman says that in many other fields, and even corners of those four, students seem more interested in shorter-format programs. That requires institutions to figure out how they could modularize their offerings and offer them to students in varied combinations over a longer period.
In the future, Hickman said, “We don’t think graduate education is going to be this point in time” that students pursue a few years after their undergraduate years.
Some of this is grounded in EAB research. Conferrals of graduate certificates have been growing faster than master’s degree conferrals (six times as fast, in the 2007-12 period, according to a report for EAB’s Continuing and Online Education Forum), and that doesn’t even count the non-credit certificates.
What’s more, as EAB describes in that same report, millennials, and especially those it calls “the lost class” who graduated college during the height of the great recession, aren’t as willing (or financially able) to invest as readily in a costly and time-consuming degree program as were earlier generations of students.
Howard Lurie, an analyst at Eduventures, offered similar predictions. “It goes back to what the learner is willing to spend money on,” he told me. For colleges that have been thinking about their graduate-degree offerings “in a one-dimensional way,” he said, this should be as much of a wake-up call as it was for 2U investors and the 30 or so other OPMs in the higher-ed market.
EAB’s Hickman says it’s too early to say exactly how millennials will reshape continuing and professional education, but she’s confident “it clearly will not be like Gen X before them.”
The uncertainty won’t be a picnic for colleges. Offering a menu of master’s degrees is one thing; offering a portfolio of options of varying lengths, prices, and formats is quite another. Not only will it put pressure on institutions for more flexible instructional models and administrative processes, it could also stretch their capability for staying connected with students who might be enrolling on and off for a module here and another there over many years, instead of once for a one- or two-year degree. As Hickman asked: “How well-suited are universities at re-recruiting those students?”
I suspect, not very. At least not yet. Nor are many probably ready to adjust to the more-erratic flows of revenues inherent in this model, never mind the implicit pricing pressure on tuition, which is part of this new bargain.
Quote of the week.
“These efforts mean more accreditors are taking seriously their responsibility to ensure a college provides a minimum return on investment to students — and that more colleges will focus on that responsibility as a result. All that could be undone in a heartbeat, though.”
—Simon Boehme, departing student member of the National Advisory Committee on Institutional Quality and Integrity and an entrepreneur based in San Francisco.
From a commentary in Education Dive, in which he argues that improvements to the accreditation process instituted by Naciqi over the past six years are being put at risk by changes proposed by the U.S. Department of Education.
Following up on Pell Grants for the incarcerated.
In July I shared perspectives from a long-ago source of mine — an expert on prison education — on the groundswell for reversing the ban on Pell Grants for incarcerated people. Two developments from last week related to the topic seem worth sharing.
First: The National District Attorneys Association, the nation’s largest prosecutor organization, joined a host of civil-rights, corrections, and education groups and endorsed the REAL Act, which would allow incarcerated people to apply for Pell Grants, saying it would “continue ongoing efforts to reduce recidivism while improving outcomes for individuals released from prison.”
Also: I heard from folks at the Vera Institute of Justice, who shared their new report outlining the ways that state policies do — but in some cases don’t — discourage incarcerated people to pursue higher education. As the report notes, 17 states and the District of Columbia “have no statutory, regulatory, or policy or practice barriers explicitly precluding incarcerated students from applying for state financial aid.” Another 14 states have policies that can temporarily or permanently bar people from receiving state financial aid even after their incarceration ends.
I continue to doubt whether Congress will renew the entire Higher Education Act before the 2020 election. But when it comes to addressing this particular issue, yeah, I’d say the groundwell continues to build.