I was particularly intrigued by this weeks readings from the OECD regarding the state of higher education, the need for long term strategic planning and looking at various policy reforms in higher education institutions throughout the world and how they can be used as models to solve some common problems all colleges and universities face. I found the information on business models interesting because we have discussed this a few times in my other higher education classes at Baruch, should colleges/universities be treated as businesses? Should students be treated as customers? Students are increasingly looking for a return on their investment into education. Do the same rules apply when running a business or a higher education institution? I think all of these questions are ones I never have a confident clear cut answer when discussing. No, I don’t believe students should only be concerned about their ROI, nor do I believe faculty, staff and administrators should look at them as customers. However, there is something to be said about the model universities have followed for many years, that doesn’t seem to be sustainable in the long run. We continue to hear about small liberal arts colleges being forced to close their doors because they can no longer afford to operate – or city and state universities funding from the federal and state government being cut year after year, forces schools to make major changes in order to continue operating. Maybe this shift towards a more “business-type” model will be necessary and beneficial to secure a more stable and strategic plan for institutions.

Defining an institutions value proposition: while almost all universities have a mission statement (or should!) this brings up the point that colleges and universities must not forget they are in competition with one another.  Schools with similar missions are competing for the same students, funding opportunities, stakeholders, prestigious faculty and staff, notoriety, etc.   I hadn’t thought about how having a strong mission can also contribute to a more cost effective system, because you are focusing your resources on specific areas which can create higher quality output.  Cost structure of higher education: if there is more money to be spent, a HEI will spend more money.  It is hard to measure expenditures of a university because it varies every year, depending on funding from the government, stakeholders, donations, enrollment numbers, etc.  Higher Education Institutions are not like normal businesses, they can’t make cuts just to save money, while still preserving the quality of their education and still making it affordable and accessible.  The revenue side of higher education finance: while the goal of HEI’s is usually not to make a profit (except in the for-profit sector) public funding and student tuition and fees are the two main sources of income for colleges and universities. I personally believe this is the biggest issue facing higher education institutions, with public funding decreasing each year, and tuition prices sky high, how is the model sustainable for years to come.  Increasing tuition is not the answer, as this decreases affordability and access for many students.  I personally come from a generation of people who are graduating with large amount of student loan debt, in an economy where we are many times under paid or under employed, which is hindering an entire generations future success.  The OECD article points out alternate sources of funding as options including philanthropy, contracting with private partners, research initiatives, and commercialization of products and services.  Performance based funding schemes are also mentioned, but also explored is the array of potential negative effects and limitations these can have on HEI’s.  I think the article has done a great job of identifying possible business models and providing a framework for self-assessment which I believe many colleges and universities could greatly benefit from.