Colleges either change course or falter

Greg Charleston is a senior managing director at Conway Mackenzie Inc., where he leads the Atlanta regional office. He is a Certified Turnaround Professional, Certified Public Accountant and a Chartered Financial Analyst.

When I think about the current state of higher education, it causes me to fondly recall my own college days. I enjoyed my freshman literature class and reading Arthur Miller’s play “Death of a Salesman” — a tragic tale of denial and the inability of the main character, Willy Loman, to accept and adapt to change.

As colleges and universities have welcomed students back for another academic year, the story of Willy Loman remains a mainstay of college literature. And it may be even more relevant in higher education than ever before.

The traditional higher-education model of on-campus instruction and living — once rather immune from economic shifts due to consistent demand and the ready availability of student loans — now faces a sea change. Some components of that fundamental shift: Reduced government financial support, flattening or decreasing availability and appetite for student loans, an increase in competitive online offerings, changing consumer attitudes, and adjustments to the costs and benefits of a college degree.

The cost of a college education continues to rise. According to the College Board, tuition, fees and other expenses average $25,544 at a four-year public university and $50,289 at a four-year private college. Experts predict these costs will continue to rise at 2.5 times the rate of inflation.

As a result, potential students and parents alike are scrutinizing how much bang they get for their higher-education buck. My son, now a senior in high school, is not sure he wants to go to college. We would like him to, and we are looking at where and how he can get a degree that will give him an edge in the job market without it costing an arm and a leg.

It’s not just us; more parents and potential students are weighing the cost of the education and asking themselves if it is worth it. These consumers are really beginning to question the value of incurring high student loan debt.

One thing is clear: Now is the time for college and university administrators to develop and implement plans that will enable them to survive the inevitable changes on the horizon for the next two decades. Some administrators will embrace change and lead, while others will fixate on their institution’s perceived self-importance and may be unable to deal with the disparity between that illusion and reality.

For leaders who are willing to confront change and lead courageously, here are three specific, critical actions they can take.

• Manage costs to temper the coming tuition competition crunch. Many institutions already offer significant tuition discounts to lure students. As this practice ramps up, combined with increases in student loans to deal with rising costs, tuition revenues will continue to decrease.

• Adapt to the trends. Online degrees are not going away. Just as public and private institutions have needed to upgrade their technological infrastructure in recent years to remain competitive, so will they need to consider offering online or hybrid programs to maintain their relevance.

• Look at alternatives. Mergers and alliances among universities are trends that will continue. Smaller private universities will need to find ways to scale their cost structures while providing educational offerings that appeal to potential students.

The challenges ahead in higher education are manageable, with the right strategy. Institutional leaders unwilling to make tough decisions and necessary changes may find themselves in a Willy Loman-esque funk resulting from the failure of self-realization and true wisdom.