• Huron Companies
    • Innosight
    • Studer Education
  • Submit RFP
  • Careers
  • Technology Partners
  • Contact Us
  • About Us
  • Favorites
Huron Logo Huron Logo
  • Expertise
    • Business Operations
    • Care Transformation
    • Consumer Transformation
    • Digital
    • Organizational Transformation
    • Research Enterprise
    • Strategy & Innovation
    • Upcoming Huron Events

      View Events
  • Industry
    • Education
    • Energy & Utilities
    • Financial Services
    • Healthcare
    • Industrials & Manufacturing
    • Life Sciences
    • Public Sector
    • See All
    • We collaborate with the best and brightest in technology.

      Learn More About Our Partners
  • Our Experts
    • View All Expert Bios
    • Find an expert specialized in your industry.

      Book a Speaker
  • Insights
    • Articles
    • Case Studies
    • Research
    • Get the latest insights and updates from our experts.

      View All Insights
  • Investor Relations
    • News
    • Events
    • Financial
    • Stock Info
    • Corporate Governance
    • See All
    • Learn more about Huron and our most recent financial results.

      Investor Presentation
  • Contact Us
  • Expertise
    Expertise
    Business OperationsCare TransformationConsumer TransformationDigitalOrganizational TransformationResearch EnterpriseStrategy & Innovation

    Upcoming Huron Events

    View Events
  • Industry
    Industry
    EducationEnergy & UtilitiesFinancial ServicesHealthcareIndustrials & ManufacturingLife SciencesPublic SectorSee All

    We collaborate with the best and brightest in technology.

    Learn More About Our Partners
  • Our Experts
    Our Experts
    View All Expert Bios

    Find an expert specialized in your industry.

    Book a Speaker
  • Insights
    Insights
    ArticlesCase StudiesResearch

    Get the latest insights and updates from our experts.

    View All Insights
  • Investor Relations
    Investor Relations
    NewsEventsFinancialStock InfoCorporate GovernanceSee All

    Learn more about Huron and our most recent financial results.

    Investor Presentation
  • Careers
    Careers
    Join Our Talent CommunitySearch Open PositionsBenefits
  • About Huron
    About Huron
    The Huron DifferenceOur People & ValuesMaking an ImpactOur ResultsInvestor RelationsLocations
  • Help & Support
    Help & Support
    Contact UsSubmit an RFPBook a Speaker
  • Privacy
    Privacy
    Privacy StatementTerms & ConditionsCookies PolicyFraudulent OffersLabor Condition Applications
  • Contact Us
  • Favorites
    Recent Favorites
    You have no saved content.

Building Higher Education's Future Business Model

Favorite Bookmark

Peter Stokes, Andrew Laws

Download Email Subscribe Print

The higher education industry is at an inflection point. Public and private institutions alike are tracking, if not yet being impacted by a tectonic shift in who they serve (and how they do it).

Overall enrollment has incrementally declined, forcing some colleges and universities to consider consolidation and closures. At the same time, higher education’s target market is no longer limited to new high school graduates. The pool of potential applicants is diversifying across race and ethnicity, age and socioeconomic factors. This changing audience is challenging institutions with new expectations that traditional academic offerings may not be equipped to meet.

As the higher education environment continues to transform, maintaining the status quo is the riskiest move leaders can make.”

As higher education’s audience evolves, questions about institutions’ cost structures become more pressing. Tuition at public and private institutions rose more than 100 percent over the last two decades. With government appropriations shrinking, many colleges and universities are more reliant on tuition dollars than ever before — reinforcing the affordability barrier that prevents schools from attracting and retaining bright minds.

Demand for higher education is diminishing and the offerings institutions supply are losing shelf life, rendering current financial and operational structures unsustainable. To thrive for decades to come, higher education leaders, even those at institutions succeeding today, should prepare to fundamentally adapt their business models.


Connecting the Dots for Student Success

Learn how to achieve student success and financial sustainability by using strategic planning and integration across your higher education campus. Read more. 

Laying the Groundwork for a Viable Future

Tactics such as tuition discounting are short-term fixes for higher education’s long-term challenges. Higher education leadership teams need a bold vision for innovating their operations and offerings to ensure their institutions’ longevity.

Four areas higher education leaders could explore when building future-proof business models include:

  • Academic portfolio optimization: Academic offerings account for approximately half of institutions’ total expenses, but few leadership teams have visibility into the efficacy of their programs. Similar to an investment portfolio, higher education executives should treat their academic offerings as a portfolio with balanced priorities (e.g., mission, prestige and profit), that has a regular cadence for review and reimagination. With a unified, data-driven approach to academic portfolio optimization, leadership teams can objectively measure each program’s performance, financial viability and alignment with the institution’s current and future strategy. Conducting this exercise on a constant cadence can reveal programs ripe for consolidation and areas worthy of additional investment.
  • Revenue-driving partnerships: Another private sector trend with potential for the future of higher education is the pursuit of partnerships. The right alliance can infuse your institution with the expertise and resources necessary for successful reinvention. For example, U.S. universities have historically used joint ventures to expand their global footprints. More recently, it has become common for institutions to establish partnerships for online programs. Forging similar partnerships in other operating and academic areas could be a fast-track to cost reduction and scalability. Mergers and acquisitions should also be up for consideration. Beyond minimizing expenses, M&A can unlock growth opportunities. Purdue University’s 2017 acquisition of Kaplan University, for instance, set the stage for the launch of Purdue Global, an online program with more than 100 offerings largely geared toward adult learners.
  • Education delivery innovation: Leaders’ most difficult step in building a new higher education business model is unlearning what you already know about your audience. Teams should commit to understanding the needs, challenges and goals of a new student body. With that detail, you can identify which capabilities you need—and those that are no longer relevant—to succeed. If your institution plans to increase the number of rural or working adult students, the main venue for learning may shift from the lecture hall to virtual platforms or more distributed microcampuses. For these emerging populations, two or four-year degrees may not be as feasible (or effective) as certificates, “stackable” credentials or interdisciplinary programs that can be enrolled in year-round.
  • Evolved pricing structures: As education delivery and student demographics transform, institutional pricing should adapt accordingly. While undergraduate tuition discounting has steadily increased for the last decade, awarding more aid alone isn't a long-term solution to enrollment and budget challenges. Just as the healthcare industry is moving from fee-for-service to value-based payment models, higher education could benefit from more closely tying costs to student outcomes. For example, some institutions are implementing differential tuition where costs vary depending on an academic program's internal costs or graduates' earning potential. Online learning and stackable credentials also present opportunities to pilot new structures, such as subscription payments or program-specific pricing.

As the higher education environment continues to transform, maintaining the status quo is the riskiest move leaders can make. Positioning your institution for long-term financial and operational success starts with more than near-term tactics; it demands a new, strategic business model.

By developing a plan for tomorrow’s changes today, higher education leaders can protect their institutions’ relevance and competitive edge.

KEY TAKEAWAYS

Building a future-proof business model for your institution requires higher education leaders to:

Think differently.

Take note of transformation strategies from industries outside of higher education that can guide your institution into its next chapter.

Plan differently.

Chart a course of action based not only on who you serve today, but the students you want and need to engage tomorrow.

Act differently.

Empower leaders to challenge tradition, develop bold visions and pursue creative partnerships that drive innovations across your institution.

Favorite Bookmark
JS Inject Download Email Subscribe Print
Business Operations Strategy and Innovation Education

Building Higher Education's Future Business Model

  • Peter-Stokes

    Peter Stokes

    Managing Director

    Contact This Expert Read My Bio
  • Andrew-Laws

    Andrew Laws

    Managing Director

    Contact This Expert Read My Bio

Related Work

  • Higher Education's Dual Challenge

    Read More

    Why the increasing importance of tuition as a funding stream will force institutions to position themselves for a future of opportunity in a market of uncertainty.

  • Assessing the True Costs of the Academic Portfolio

    Read More

    Knowledge of costs across the academic portfolio is essential in academic planning. Many universities have little or no visibility into profitability of individual courses.

  • Think Creatively to Ensure a Financially Viable Future in Higher Education

    Read More

    Joint ventures and shared services agreements are two ways higher education institutions can transform in order to offset enrollment and funding challenges.

View All

We use cookies on our website to provide you with a more personalized digital experience, enable website functionality and understand the performance of our site. You may review our Privacy Statement and our Cookies Policy. By using this site you agree to our use of cookies. I Accept

  • Expertise
    • Business Operations
    • Care Transformation
    • Consumer Transformation
    • Digital
    • Organizational Transformation
    • Research Enterprise
    • Strategy & Innovation
  • Industry
    • Education
    • Energy & Utilities
    • Financial Services
    • Healthcare
    • Industrials & Manufacturing
    • Life Sciences
    • Public Sector
  • About Huron
    • The Huron Difference
    • Our People & Values
    • Making an Impact
    • Our Results
    • Investor Relations
    • Locations
  • Help & Support
    • Contact Us
    • Submit an RFP
  • Careers
    • Search Open Positions
    • Join Our Talent Community
    • Our Commitment
  • Legal
    • Privacy Statement
    • Terms & Conditions
    • Studer Education: Subscription Product Terms of Use
    • Cookies
    • Fraudulent Offers
    • Labor Condition Applications
Huron Logo
  • LinkedIn Icon
  • Twitter Icon
  • Facebook Icon
  • Instagram
  • Youtube Icon

© 2022 Huron Consulting Group Inc. and affiliates. Huron is a global consultancy and not a CPA firm, and does not provide attest services, audits, or other engagements in accordance with standards established by the AICPA or auditing standards promulgated by the Public Company Accounting Oversight Board (“PCAOB”). Huron is not a law firm; it does not offer, and is not authorized to provide, legal advice or counseling in any jurisdiction.