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The landscape of postbaccalaureate learning has never looked more complex. On one hand, demand for the master's degree has never been higher -- the share of the U.S. population with an advanced degree has increased from 5 percent in 1980 to 13 percent today, leading the most competitive sectors of the workforce to refer to the master's as “the new bachelor's.”
But while employers continue to demand master's-level credentials and the skills they endow, societal concerns surrounding debt and the value of degrees have led others to assert that the master's degree is no longer “worth it,” the return on investment too shaky to bet on. Throw in competition from less expensive and shorter-term alternative credentials, such as coding boot camps and microcredentials from for-profit companies such as Google and IBM, and where once there were only master's degrees, and at a tight range of prices, now a worker hoping to reskill has more choices in regard to price, admissions standards and instructional model.
The landscape for graduate degrees is moving quickly, and graduate school officials, many worried about maintaining their institutions’ financial viability and relevance in a new economy, are struggling to keep up. Thursday, about 200 graduate school administrators, faculty members and other interested parties gathered at Inside Higher Ed’s New Models of the Master's Degree event to try make sense of the complexity and decide their next move.
Declining Revenue?
Sean Gallagher, executive director of the Center for the Future of Higher Education and Talent Strategy at Northeastern University, who studies these trends, predicted that the future of how the master's degree is sold and consumed might mirror the how the recorded music industry moved through the first two decades of the 21st century.
Consumption of recorded music has only increased since 2001, as more and more people now have access to music at almost every moment. But with the decline in the sales of physical CDs and records, and the growth of streaming, where profit takes a different route, revenue for the entire industry decreased until slowly rising again in the last few years. But where revenue once went almost solely to labels and artists, now intermediaries, such as Apple and Spotify, have taken a greater portion. (See slide below.)
“We’re about here,” Gallagher said at Thursday's event, pointing at a bar representing the music industry’s revenue in 2003, not yet having undergone massive change. The master's space could see increased consumption and demand, but also a total decrease in revenue, as new online options offer lower prices. Just as streaming now brings more money to the music industry than CDs did, for-profit intermediaries (online program management companies, for instance) could stand to gain a greater slice of the postbac pie, diverting revenue from nonprofit and public institutions themselves.
But, Gallagher noted, the employer acceptance and awareness of microcredentials and potentially other degree alternatives is still relatively low.
“About half of employers are aware that [microcredentials] exist and are coming across them on résumés,” he said. “About 20 percent of HR leaders have hired someone that actually holds one of these various forms of microcredentials.”
Opportunities
As evolution is happening in the graduate sphere, opportunities and threats abound, Gallagher said. The technology now exists for universities to scale their graduate programs through online enrollment. Stackable credentials, small specializations or pieces of a master's degree offered by some universities have all shown some promise in bringing in revenue.
Fiona Hollands, associate director at the Center for Benefit-Cost Studies of Education at Teachers College of Columbia University, questioned whether revenue is going down for all programs. She noted that the stackable specializations offered by the University of Pennsylvania’s Wharton School of Business are likely creating revenue for the institution.
“They’ve had at this point several thousand [people] complete the overall specialization. Six thousand completed the entire series,” she said. “Their revenue has been $20 million. And this is new revenue.” The net gain to UPenn is about $10 million, she said, after the university pays Coursera, its program partner.
Threats
The threats to the master's degree, Gallagher said, include growing competition and pressures on pricing, among other changes. As universities are starting and terminating programs, it can become more and more difficult for prospective students to be able to differentiate between the quality of degrees. Universities that have partnered with online program management companies, often giving them a share of tuition to scale online degrees, might be threatened by growing pushback to those companies and whispers in Washington about regulation.
Some attendees questioned if they would need to change how they recruited and retained faculty amid the changing landscape, and if greater flexibility will be needed.
Jonathan Greenberg, chair of the English department at Montclair State University, noted that the change toward a flexible academic workforce is already well under way, with growing adjunctification and a phasing out of tenured and tenure-track faculty.
James Hilton, vice provost for academic innovation at the University of Michigan, emphasized that universities looking to innovate should do their best to not just take the degree programs they already have and put them online, but to think deeper about they could change instruction, and to offer a wider range of credentials to serve different groups of students.
“Part of the problem higher education faces right now is we think if we just tell our story better, people will change their opinions about us,” he said. “There’s an opportunity to fundamentally reimagine how we deliver education for this century, for this technology, this economy, this political environment.”
