⚡️ Breaking: The Biden administration yesterday released a letter and Q&A for colleges to clarify what’s still legal in using race and ethnicity in admissions after the U.S. Supreme Court struck down affirmative action in June. (The Washington Post)

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“Nothing seems the same anymore,” a former president of a Big Ten university texted me last week. He was talking, of course, about the hurried conference realignment a few days earlier that swept the Universities of Oregon and Washington into the Big 10 as the storied Pac-12 conference collapsed almost overnight.

But as we continued to text back and forth about what else was happening in higher ed, his statement could have described so much of the upheaval across the sector right now.

First, there was the news out of West Virginia on Thursday night that its state flagship plans to eliminate 32 academic programs, including the department of world languages, literatures, and linguistics as well as two graduate programs in math. The cuts are needed to close a projected $75 million deficit by 2028, exacerbated by way-too optimistic enrollment goals over the last decade that weren’t met.

Second, the announcement in West Virginia came on the heels of an extensive Wall Street Journal analysis last week that outlined in detail the spending habits of public flagships over the last 20 years. It found that the top public universities often saddled the costs of new amenities and staff on the backs of students in the form of higher tuition prices. It’s also an argument my podcast partner Michael Horn made on Future U. earlier this year when economist Sue Dynarski blamed state budget cuts for rising tuition—and not spending decisions by university officials that often has them trying to keep up with the Joneses.

“It’s going to be like selling candy bars for little league or Girl Scout cookies.” 

—Robert Robbins, president of the University of Arizona, on the Pac-12 universities helping to sell Apple TV+ subscriptions. 

Beyond those stories, however, there is growing evidence—both anecdotal and in surveys—that a more seismic shift is happening in higher ed post-pandemic. Yes, it’s easy to overstate the potential of change in the moment it’s happening. But as I devoured the news coverage of the most recent shifts in the athletic conferences, I couldn’t help but think about how the financial structure of big universities are built not only on the labor of athletes but also graduate students—and how both groups are flexing their muscle at a time when the economics of higher ed are in a pretty precarious state.

Let’s start with the athletic conferences: It was a pure money grab by universities that need the dollars to sustain spending on coaches and facilities. Whether it’s a $31.7 million annual payout per school (in the Big 12) or $60 million (in the Big Ten), it’s important to remember that those dollars are furnished by traditional linear television, which is quickly dying.

So, not only is that money not going to athletes—who within the lifetime of these TV contracts are likely to be classified as employees in one of several cases working their way through the judicial system—but I wonder how many university presidents really think those dollars will be there the next time, after Disney sells off ESPN or cable subscribers cut out Fox Sports?

Sure, the University of Arizona’s president pooh-poohed the media deal that the Pac-12 had negotiated with Apple to stream games; he likened the incentives for the universities to promote subscriptions to “selling candy bars for Little League.”

But Apple and other streaming services will probably be a lifeline for university presidents by the end of the decade when the networks can’t pay top dollar anymore. And by then, universities with big-time athletic programs will also likely be paying their players on top of their coaching staffs.

It’s not only student athletes looking for a payday. So, too, are graduate students. Like athletes, graduate students have long provided labor at a significantly reduced cost to universities. Earlier this year, a strike by graduate students at the University of California ended when university officials agreed to salary, benefits, and tuition demands totaling between $500 and $750 million over the life of the contract—a number Berkeley’s CFO called a “financial shock.”

Now presidents and provosts at other universities that depend on graduate labor are worried similar demands are coming their way. (The graduate-student union at the University of Michigan at Ann Arbor has been on strike since late March and university officials have said they’ll be replaced if the work stoppage continues into the fall semester.)

The big picture: How colleges and universities make and spend money has never been clear to even those who run the operations.

• It was noted on social media by several West Virginia academics, for instance, that many of the departments that are slated for elimination bring more in tuition than they spend. But cross subsidies have long existed in higher ed, whereby large English lecture classes help pay for small biology labs or cash-cow professional programs pay taxes to fuel elite undergraduate majors.
• Historically, higher ed never designed P&L’s by “product line,” like in most sectors of the economy. But increasingly there is a mindset shift on campuses as budget models make individual schools within universities more responsible for what they bring in and what they spend. This now allows institutions like West Virginia to make more financially strategic decisions about what to keep—and what to cut.
• Given the coming demographic cliff, along with the financial realities on the horizon for higher ed, it’s clear what’s happening in West Virginia is not a one-off story, but more of a sign of things to come.

The “Next Office Hour” for October will focus on using artificial intelligence and machine learning to improve student pathways through higher ed.

• In this webinar, we’ll examine the basics of AI/ML and their promise in streamlining administrative functions and look at case studies for how technology is already working to improve the student experience in higher ed.

🗓️ Mark your calendar for Tuesday, October 3 at 2 p.m. ET/11 a.m. PT.

• More details to come soon, but reserve your spot now to join in an interactive discussion and get an on-demand recording.
• Register for free. (Support from Amazon Web Services

⚠️ High Point U. placed on warning by accreditor

High Point University gets plenty of media attention for its Disney-esque campus amenities and its operating margins (i.e. profit) that are the envy of many other private colleges. But when its accreditor, the Southern Association of Colleges and Schools Commission on Colleges (SACS) put the North Carolina campus on “warning” in June, I didn’t see any mention of it anywhere beyond the SACS website.

What’s happening: A warning doesn’t mean the university is at immediate risk of losing their accreditation, but “it’s a bit of a shock,” Jeffrey M. Adams, High Point’s vice president for research and planning, told me.

• The university failed to meet three of the accreditor’s standards, including “Core Requirement 12.1 (Student support services) and Standard 8.2.a (Student outcome: educational programs).”
• SACS found that High Point neglected to highlight how the university extends student support services to online students specifically. Similarly, on student outcomes, the university discussed how it assesses academic programs in its report to SACS, but wasn’t clear enough how it makes improvements when they’re needed in specific programs.
• “A lot of their concerns were addressed in our report but weren’t pulled out for them to easily see,” Adams told me.

What’s next: The university will present a monitoring report to the accreditor on these standards and the SACS board will consider the university’s response in June 2024.

More background: Accreditation is meant to protect consumers and taxpayer dollars, but often prospective students and the public have zero insight into what the accreditors find.

• As Barbara Brittingham, the former head of New England’s accreditor told us on a Future U. episode this spring, “transparency is not a standard” accreditors must meet. Rather, their reviews are designed to help institutions improve and often that happens behind the scenes.

Bottom line: While a “warning” might sound serious to students, it’s the most basic action SACS can take if it finds fault with what the institution has submitted. So while a warning can can lead to more serious action down the road, for the most part, a warning is flagging an issue for the institution.

• As a result, such actions are not really useful to the public since the only document the accreditor posts on its website seems like it was written in a foreign language to most people.
• More details about what the accreditor found are sent to the institution in the form of action letters “and we don’t post those,” Patricia Donat of SACS told me.
• What would be more useful to consumers is if accreditors followed how products are recalled by the government and manufacturers. In those cases, the issue with the product is clearly explained along with details on how remedy the situation.

A MESSAGE FROM GROWN & FLOWN

🔨 Here’s an example of real hands-on learning

When Michael Horn and I visited Bowie State University last year for the Future U. Campus Tour, President Aminta Breaux told us about a Saxbys coffee cafe on campus that was fully run by students. It is one of 18 such cafes across campus in five states, as I reported recently for Fast Company.

Why it matters: “Experiential learning” is all the rage in higher ed with co-ops and internships.

• But fewer students have internships in college than work part-time jobs to help pay for school. Nearly 40% of full-time traditional undergraduates younger than 24 work while going to college.

The backstory: The student-run Saxbys started eight years ago. Founder Nick Bayer connected with Drexel University’s president, John Fry, who saw it as an extension of the university’s well-known co-op but with a twist.

• “A co-op is important, but you’re learning to work for someone,” Fry told me. “This felt like a new dimension, where you’re learning to resolve your own challenges and disputes.”

By the numbers: Each Saxbys “experiential learning café” has a student CEO who manages a million-dollar business with anywhere between 40-60 employees.

• During a six-month rotation, the student CEO takes a break from classes but earns credits and gets paid for the job.
• Students can earn as much as $20,000 for the work, with bonuses possible as well.

What’s next: Before Covid, campus cafés made up a 25% of business for Saxbys. Now the company is going all in on the concept.

• In 2021, it hired a former La Salle University administrator to start tracking outcomes of student workers and develop badges to award undergraduates in specialties such as supply chain management and strategic marketing that go along with their college degrees.

The big picture: Many of the students I met who manage the Saxbys campus-based cafés don’t plan to pursue a career in the coffee business. Rather, they see the job as providing skills that can be applied to a range of entrepreneurial pursuits.

• There are lots of efforts now at making campus jobs less menial and more meaningful. The Saxbys student-run cafés are just one, but an interesting concept I wish other vendors who work with campuses would follow. 

SUPPLEMENTS

💰Too much grad debt? The Education Department has released the first in a series of reports on graduate borrowing. The authors from the department’s Office of the Chief Economist write that their findings “suggest cause for concern”—adding that “there is generally very little correspondence between the amount students borrower to finance their advanced degrees and their labor market outcomes.” (U.S. Department of Education)

🤝 U. of Chicago agrees to $13.5 milllion settlement in financial aid case. The University of Chicago is the first of 17 universities to reach an agreement in the antitrust price-fixing case brought by current and former students. In addition to the payment, the University of Chicago agrees to cooperate with plaintiffs’ lawyers on certain matters, including the collection of documents and other evidence. (Wall Street Journal)

🎖️ Why did SCOTUS carve out on affirmative action for the academies? Each year, about 3,500 students graduate from the military academies. Officer demographics don’t come close to mirroring the racial makeup of the enlisted corps: about 32% of the enlisted corps are racial minorities compared to 24% of the officer corps. In the military, you can’t get to the top without starting at the bottom, said Lawrence M. Hanser, senior behavioral scientist at the Rand Corporation, a nonpartisan think tank. “So if you want representation at the senior ranks, you’ve got to bring them in at the bottom in order for that to happen.” (The Hechinger Report)

⛔️ An advocate for ‘trigger warnings’ says she was wrong. The way progressive communities in the U.S. talk about trauma may be undermining the very goals they’re trying to achieve. Jill Filipovic, an early advocate of trigger warnings now commonplace throughout higher ed, writes that the “way we often talk about trauma and adversity now seems like we’re setting ourselves up to crumble.” (The Atlantic)

Until next time, Cheers — Jeff