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Business Officer Magazine
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A New Normal—Sew What?

A basic design change by the inventor of the first commercially successful sewing machine is food for thought for leaders looking for a more sustainable business model for higher education.

By Dan Angel

"Paradigms may have shifted while in flight."—Virgin American Airlines billboard, San Francisco

Brian Kelly, editor of U.S. News and World Report, has asked, "Why should colleges be immune to the change sweeping just about every other industry in the country?" The answer is, of course, they are not. And, although the collision course with reality has been coming for some time, the higher education establishment has only recently begun to understand the centrifugal, converging storm demanding structural change.

The bald truth is that it is the end of an era. Higher education finally has to deal with the "third rail" issues. That label comes from the Bay Area Transit System (BART) in San Francisco that warns riders not to touch the electrified third rail. Institutions of all types, including political parties and higher education, have taken that warning to heart and left the prickly, difficult issues lying on the table. Consequently, now comes the day of reckoning. A change in the structure of our enterprise must deal with third-rail issues in three major arenas: cost, technology, and design.

Cost Hits the Wall

Recently, the New York Times reported that tuition and fees have gone up 560 percent since 1985. Money magazine projects that, at the current rate of increase, my granddaughter McKenzie, born this year, will have to pay a four-year sticker price of $240,000 at a private university or $155,000 at a public university, when she enrolls in college in 2020. Since debt for student loans already totals more than $1 trillion-including $67 billion in default-clearly something has got to give. And it is no longer going to be the taxpayers, the parents, or the student.

Our institutions will need to curb their tuition feeding ferocity. How? By dealing with long-unattended, out-of-control items such as pensions, health care, new construction, tenure, athletics, number of majors, and much more.

Technology Takeover

One of the good things to come from the for-profit segment is its use of online technology, which pushes the nonprofit and public sectors in that direction. The Chronicle of Higher Education research service notes: "Nothing is as likely to change the face of higher education over the next decade as the switch to online learning." (See sidebar on this page.) That same sentiment is echoed by Harvard business professor Clayton Christensen, who predicts that half of all higher education students will take at least one online course by 2014. To his point: According to GSV Advisors, 124 technology companies received investor backing for alternative models last year (as reported in "Education Innovators," the Chronicle of Higher Education, April 2012).

Design Revamp

The higher education model has not changed much in the past century. Access has improved, affordability has not, and the rate of degree completion is so lethargic that the federal government keeps its four-year degree attainment records on a scorecard with six-year numbers. To make the completion record look better, the Department of Education will soon start to include transfer and nontraditional students in the numbers.

That is the wrong way to cure the problem. Better we follow the lead of the European Higher Education Area and change our design to that of a three-year completion model. A host of advantages can result: no long breaks in student education, a 25 percent reduction in student debt, salaries that start a year earlier, and facilities that are better used.

Perhaps we ought to take a lesson from Isaac Singer, inventor of the first commercially successful sewing machine. Singer was not the first to invent such a device; several others were patented before his model. But, in 1851, Singer changed the design in a basic way: Instead of using a shuttle and needle that moved in a circle, his ran in a straight line, allowing for operation at 900 stitches per minute compared to the previously possible 40 to 50 by a skilled seamstress.

Singer was also the first to use installment purchasing, allow trade-ins, and extend to the home what had previously been an industry-only product. Isaac Singer scored the trifecta: changing the basic design, artfully adapting technology, and drastically cutting costs.

Institutional leaders might well reflect on Singer's success and ask themselves: "Will a stitch in time same mine?"

DAN ANGEL is president, Golden Gate University, San Francisco, and coauthor, with Terry Connelly, of Riptide: The New Normal in Higher Education (The Publishing Place, 2011).