Apr 2, 2015

Predicting the Future by Reading the Past


It is often said that the best predictor of future behavior is past behavior.  When it comes to understanding current trends in primary and secondary independent education, understanding the past history of higher education proves quite helpful.  In fact, some of the current trends in independent education management are strikingly similar to trends experienced by higher education over a decade ago.  Here are just a few.

Tuition Discounting – Using financial aid as a net tuition revenue generatior and moving to a leveraged or optimized financial aid model has roots in the past two decades in higher education.  Small, private, tuition-driven colleges have been doing this successfully for nearly twenty years.  The concept of merit-based aid (in concert with need-based aid) also has roots in the higher education camp.  In fact, you will be hard-pressed to find such a college today without a very sophisticated NTR (net tuition revenue) model in place in their enrollment management program.   

Online and Extended Learning – Higher education found extended learning, or learning beyond the walls of a traditional classroom, was a “blue ocean strategy” just shy of two decades ago.  As the number of traditional high school graduates dwindled in the late 1990’s and early part of the first decade of our new Millenium, adult degree completion programs and online learning efforts proliferated the market in an effort to grab new customers.  

Auxilliary Revenue Drivers – Repurposing unutilized capacity , such as classrooms, residence halls, and athletic facilities for other uses, such as a public interface or rental income, has been a key element of the higher education budgeting process.  Most colleges still operate on a eight or nine month academic calendar, with excess capacity available on the weekends and throughout the summer.  Over the years, they have become increasingly competitive and sophisticated into how to build public facing programs that utilize their unused capacity and generate additional revenue, as well as build their brand.

Understanding Different Learning Experiences – Higher education might have been a pioneer in understanding and honoring different learning experiences through credit on a transcript.  Portfolio-based learning, where inbound college credit is assigned based upon life and professional experiences, has been common in some college degree completion programs.  While this may be different than looking at the incoming credentials of a sixth grader, it may not be as different as we think.  Higher education has long assumed that the learner of today may be very different than the person next to them in the classroom just a generation ago.

If we were to look further, we would find even more parallels between the two industries.  The reality is that most major trends that we see in the independent school primary and secondary world often have their roots in the higher education industry.  Some of these trends have been well-managed at the college and university level, while others have not. And, each trend and its collective impact on the industry is worthy of debate.  But, we have often believed that it is both informative and predictive to examine where higher education is going to detemine the later impact on primary and secondary private education.  

The reality is that most of the management-related innovations and financial management issues either have their roots in higher education, or interestingly, in the boarding school industry, each which have had significant distruptions in their competitive environment.  These major shifts provided the urgency for innovation in their management and delivery of education.  The question I like to consider is where will be the next major set of innovations in private education management, specifically when it comes to funding and delivery, and which industry will arrive at solutions first?

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