The Future of Higher Education

Strategic Partnerships and Funding Models

• George Washington University (GWU) and the Milken Institute announced an $80 million combined investment to establish the Milken Institute School of Public Health.
  • Funding sources include direct contributions from Mike Milken, the Milken Institute, and Sumner Redstone.
  • $15 million of the total investment is designated specifically for student scholarships and fellowships.
  • The partnership aims to address the national crisis of chronic disease caused by obesity and related public health burdens.
  • GWU faculty in the School of Public Health grew from 60 to 100 members over the past three years.
• Universities are described as having a "tripartite mission" of teaching, research, and service, which drives high operational costs despite their societal necessity.
• The classroom instructional model remains largely unchanged compared to 100 years ago, lacking the productivity gains seen in other industries like manufacturing.

Institutional Leadership and Operational Shifts

• Janet Napolitano transitioned from Secretary of Homeland Security to President of the University of California (UC) system.
  • The UC system accounts for 10% of all research dollars expended in the United States (excluding national labs).
  • The system serves 250,000 students across ten campuses, with 42% receiving Pell Grants and nearly 42% being first-generation college students.
  • Napolitano noted that state support for higher education dropped to less than 3% of the total California state budget for the first time in history.
  • A "reverse shift" has occurred where tuition revenue now exceeds state support for the UC system.
• José A. Vargas (Joe) became President of Northeastern University, emphasizing a shift from input-based exclusivity to output-based success.
  • Northeastern expanded its co-op (cooperative education) program to 114 countries with 3,000 global employers.
  • The university launched online professional master's programs in 11 cities (e.g., Charlotte, Seattle) targeting working professionals rather than mass-market undergraduates.
  • Northeastern is moving from a "vertically integrated" model to a "horizontal integration" model where research, teaching, assessment, and credentialing are decoupled.
• Rob (president of Strayer University) highlighted a focus on non-traditional adult learners and the limitations of current technology in replicating face-to-face pedagogy.
  • Strayer maintains lower professor-to-student ratios online than in classrooms to ensure learning outcomes are met.
  • The university implemented diagnostic tests for math and English for undergraduate entrants; students scoring below a threshold are not allowed to take student loans due to a statistical graduation probability below 20%.

Challenges in Workforce Development and Pedagogy

• Don Randall (University of Chicago) noted that 80% of instruction at colleges is delivered by graduate students and adjuncts rather than tenure-track faculty.
• The higher education sector faces a student success crisis:
  • Only 50% of students entering four-year institutions graduate.
  • Only 20% of students entering two-year institutions graduate.
  • Highest-achieving low-income students graduate at the same rate (29%) as lowest-achieving high-income students.
• Current ranking systems (e.g., U.S. News) rely on input measures (selectivity), which distort behavior and drive costs, rather than output measures (graduation rates, employment outcomes).
• There is a "reverse digital divide" concern where low-income students may receive online-only degrees while wealthier students access high-touch, in-person networking and laboratory opportunities.

Policy, Regulation, and Economic Impact

• The Department of Education has proposed new output-based metrics and regulations, primarily targeting the for-profit sector, which the panelists view as ideologically driven and overly complex (an 845-page rule to define two words).
• Rob suggests a risk-sharing model where institutions share the cost of student loan defaults to align incentives with student success, rather than regulating capital sources.
• The federal government's share of the research funding pie is stagnating or declining despite the US being the top recipient of NIH grants.
• Janet Napolitano cited a "1:5 economic multiplier," where every dollar invested in the UC system yields $5 in immediate economic impact.
• China is projected to surpass the US as the number one economy globally, a trend the panel attributes in part to underinvestment in US higher education and basic research.

Future Outlook and Systemic Risks

• Panelists expressed deep skepticism about the viability of public higher education as a universal public good due to sustained state funding cuts.
  • Public universities are increasingly "privatized" through reliance on tuition and international student fees (full-pay).
  • There is a risk that the diversity of the higher education system will be lost as public institutions struggle to survive without state support.
• The sector faces a "horizontal integration" disruption where independent entities handle specific functions:
  • Third-party organizations (like the American Council on Education) may assess courses independently of the institution.
  • Employers may increasingly credential skills directly, bypassing traditional degree bundling.
• The panelists warned that if higher education institutions do not position themselves as the "disruptor" rather than the "disrupted," they risk obsolescence.
• A call was made for a unified higher education response to federal regulatory changes and the need to redefine the value proposition of a degree beyond mere credentialing.