Signaling Job Readiness: Degrees Decline in Value, Alternatives Emerge
"In the new world the learner will be in the driver's seat, with a keen eye trained on value." That was the conclusion of Pearson's senior academic team who said an avalanche is coming to higher education. Chief Education Advisor Sir Michael Barber and his colleagues Katelyn Donnelly and Saad Rizvi released a report last year that outlined the problem statement for higher education:
- The cost of higher education has compounded much more rapidly than inflation for thirty years;
- The value of degrees is diminishing--rapidly since the Great Recession;
- Learning content is ubiquitous; and
Competition is heating up
My colleague Michael Staton recently wrote in HBR that The Degree is Doomed. He concluded, "The value of paper degrees will inevitably decline when employers or other evaluators avail themselves of more efficient and holistic ways for applicants to demonstrate aptitude and skill." The combination of inflated costs, mounting student debt, and crushing young adult unemployment during the Great Recession have caused many to question the value of degrees.
Decline of the degree? Barber's Avalanche report notes that universities were conceived as local or regional institutions and are now competing globally--their protected ability to confer a degree is rapidly eroding. The availability of online courses and open resources has changed the equation. "As a result," notes Barber and team, "universities will have to look at what they offer - the curriculum, the teaching, the mentorship and the wider experience - and seek to ensure it has real value both intrinsically and as a preparation for work, life and citizenship."
"The MBA experience and resulting credential is valuable and will remain so," said Susan Cates who runs executive education at the UNC business school. Not surprisingly, she thinks "an MBA from an outstanding school is a great way for students at various points in their career to add knowledge, networks and new opportunity to their undergraduate experiences at a time when they can more fully integrate and leverage it."
Last year there were 78 accredited schools offering an online MBA, now there are 116. After years of rapid growth, the market for online MBAs may be reaching saturation without specialization and differentiation. The flexible approaches UNC offers with partner 2U are more engaging and learner-friendly compared to traditional programs.
Enrollment at public universities remained stable last year but Clay Christensen thinks half of higher education institutions could be bankrupt in 15 years. The elites should be able to coast for a decade (despite new competition from the likes of Minerva) but third tier colleges are likely to face significant cost and enrollment pressure. Barber and team suggest, "The warped logic that has locked price and quality together needs to be broken. Universities need to find ways to reduce cost while increasing quality, and crucially they must ensure that this is understood by present and future customers."
As the global population grows from 7 to 9 billion, developing economy demand for degrees is likely to more than offset declining demand for degrees in the West--but that won't mean business as usual.
Students are increasingly accumulating college credits starting in high school and taking advantage of online learning opportunities. Low cost general education alternatives--powered by providers like Pearson, UniversityNow and American Honors-- continue to gain popularity.
Competency-based education (CBE) "has the potential to both provide new affordable, high-quality pathways to students and to challenge our incumbent delivery models to better identify the claims they make for learning and how they know," according to Paul LeBlanc, president of Southern New Hampshire University. He adds that CBE can function like the industry's R&D lab and outlines 7 design issues . Enrollment at competency-based WGU Teachers College has expanded to 11,000 and it is now the largest provider of STEM teachers in the country.
"Based on what we are seeing, the story is less around universities becoming irrelevant but rather, it is more about the willingness to evolve," said Todd Hitchcock of Pearson Embanet. "It is all about new degree offerings versus putting old degrees online (e.g., Cyber Security and Analytics); it is also all about professional degrees versus academic degrees (i.e., Energy Management versus Anthropology)."
Alternatives. "There is also an increasing acceptance of non-degree credentials that don't rely on traditional universities," said Barber and team. Case in point is MOOC breakout Coursera which serves 6.4 million students with 601 courses from 108 Partners.
General Assembly is raising the bar for startup management, tech, and design. The leading online learning marketplace Udemy--with short courses ranging from SEO, to Statistics, and Spanish--boosts 2 million learners and 8,000 instructors. Other learning anything site likeLynda.com, Skillshare, and LearnBig continue to scale pushed by open resource sites including Khan Academy.
Degreed is an online flexible portfolio offering users a place to record the learning they have completed beyond the traditional classroom, like online courses and MOOCs, creating a living resume of lifelong learning. (Read Jailbreaking the College Degree).
Stanton noted that designers show their work on Dribbble and software engineers store their code on GitHub where other software engineers evaluate the product of their labor. Supercharged job boards like HireArt allow applicants to compete in work challenges relevant to job openings.
Gaining secondary and postsecondary traction, portfolios Pathbrite and eduClipper help students collect and display personal bests. SparkWorks is a cloud-based software aimed to make competency-based learning shine on any device
Beyond the degree. " To be successful, you can't stop learning once you finish the degree," said Cates. "Our entire program of executive development at UNC is built on this premise - that folks from mid-career managers to C-suite executives need new scaffolding to build on in the form of learning new approaches at various points in their careers."
As degrees diminish in importance and new more dynamic marketing signaling strategies gain acceptance, Powering Lifelong Learning Relationships will become big business.
As Cates suggests, professional schools are beginning to see a degree as just the initial milestone in a long term professional development relationship.
There is an expanding portion of an expanding population that is seeking knowledge and skills. In most fields, they will continue to seek degrees but they will have access to a growing range of flexible affordable alternatives. It will also become easier for job seekers to signal to prospective employers and customers.
"Bottom line," said Todd Hitchcock, "I have a lot of hope for the university--more than I did a year ago--but, the change is going to come from a number of early adopters who are willing to embrace entirely new models of delivery and launch new programs beyond what they traditionally have."Pearson is a Getting Smart Advocacy Partner. Bloc, Coursera, CodeHS, eduClipper, General Assembly, Hire Art, and Udemy are portfolio companies of Learn Capital where Tom is a partner.