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ACE Brief Highlights Higher Ed Market Risks and Stressors, Solutions

June 17, 2019

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​Current market trends in higher education show that troubled institutions have been plagued by declines in enrollment, increased market prices, and poor retention rates. Yet the data shows, as outlined in a new ACE brief, that less than 10 percent of just over 2,300 institutions nationwide are in serious risk of closing or merging.

However, the next 20 percent of the market, institutions that are genuinely struggling but not in immediate danger of closing, also face challenges, according to an analysis of eight years of the National Center for Education Statistics’ Integrated Postsecondary Education Data System (IPEDS) data reported in Too Important to Fail, Too Big to Be Complacent: An Analysis of Higher Education Market Risks and Stressors. The publication was produced with the generous support of the TIAA Institute and was co-authored by Robert Zemsky, professor of education at the University of Pennsylvania, and Philip Rogers, senior vice president at ACE.

“We need to move away from talking about predicting which colleges are on the brink of closure and toward a full and frank discussion rooted in the facts of the matter,” said Zemsky. “We hope this paper will spark a better, more nuanced understanding of how the market for an undergraduate education distributes enrollments.”

In the paper, Zemsky and Rogers outline several strategic options, particularly the reconsideration of price and costs, but also encourage a national conversation focused on affirming and strengthening higher education’s value proposition. Recent Gallup data shows that only 48 percent of Americans have strong confidence in higher education.

This report was funded by the TIAA Institute and was inspired, in part, by the desire to build the knowledge base to inform institutional strategic decisions about the what, when, and why of potential consolidations or closures and to more broadly support higher education leaders as they navigate an increasingly complex landscape. The report is part of a larger collaboration between ACE and the TIAA Institute, designed to surface and evaluate the implications of economic trends for college and university sustainability.

Colleges and universities – regardless of market position – are also being called upon to steer their institutions to be champions of equity, access, and completion, according to the paper. In a recent ACE publication, Race and Ethnicity in Higher Education: A Status Report, data confirm that “too many black students fare poorly in America’s postsecondary education system,” especially when considering persistence, dropout, and borrowing rates.

“A purposeful examination of higher education’s market challenges and value proposition is necessary for our country’s future,” said ACE President Ted Mitchell. “Higher education has never been more important to individuals, communities, our economy, and our democracy.”

The paper will be presented at ACE’s next regional summit in October in Kansas City, Missouri, as part of a panel.​

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