2015 Predictions: Competency-Based Ed To Grow, Debt Could Topple Some Schools

• By Dian Schaffhauser
• 01/07/15

Online learning will grow this year, but only modestly; more colleges and universities will test out competency-based assessment; and education technology will continue expanding as an industry, driven by investment capital. Those are three of the predictions for the coming year from higher education research and advisory firm Eduventures.

"By nearly every measure, 2014 was a challenging year for higher education. Enrollments fell for the third consecutive year, funding to public institutions in 48 states remained flat or declined, operating costs rose, and we saw an unprecedented increase in federal oversight, with heightened attention paid to the issue of access and affordability," said President and CEO Tony Friscia. In the coming year, he added, "The rhetoric of 2014 will become the reality of 2015 with the proposed reauthorization of the Higher Education Act, the continued emergence of new and innovative learning models, the further expansion of the technology sector and the ongoing need to clearly demonstrate outcomes."

The company anticipates that more than a hundred competency-based programs will surface in 2015, the bulk of those in fully or partially online programs primarily designed for working adults. Although Eduventure suggested that a quarter of those programs "will be designed around the principles and practices of direct assessment," that won't become the norm. Most will try out the competency model proven by Western Governors University. There each degree program is designed by a "council" of experts who define what competencies graduates should possess. Students take tests, write papers and perform other assignments to prove mastery of the skills and knowledge for a given course.

Eduventures expects that campus spending on IT in the coming year will surpass $45 billion. The size of the purse has sparked the launch of numerous vendors pursuing their share of those technology dollars. This "boom" in spending, however, will also result in "notable failed investments" that bring "little to no return" to the schools that made them.

Online learning will grow in 2015, the company predicted, albeit "modestly." Eduventures expects a tiny two percent growth in online degree programs, dampened in part by the "uncertainty and indecision" of adult learners, for whom many of these programs are created. Simultaneously, the number of new colleges entering the online market is expected to grow "very little, if at all." In place of that, campus leaders should expect to see a heightened focus on blended learning and improving quality and access for "traditional age students."

We'll continue to see an emphasis on outcomes in conversations among parents and the government, according to the firm. To address continuing concerns regarding the value of higher education, Eduventures said that the education segment should expect to see schools becoming "more aggressive" in how they differentiate themselves in reporting their specific outcomes.

The company also touched on the topic of debt in its prophecies, forecasting "some notable defaults within academia." "With interest rates at an all-time low, colleges are borrowing more money and betting that projected revenue (tuition, endowment, etc.) will cover their increasing debt service, which is up 88 percent since 2001," Eduventures reported. "Rating agencies, however, are not being fooled. Between 2009 and 2013, the number of credit rating downgrades at colleges rated by Moody's Investment Services outpaced upgrades by nearly five to one."

Schools will also find themselves going increasingly outside of the circle of their alumni for philanthropic support in 2015. Whereas alumni giving made up about 70 percent of total giving in 2007 and 2008 for gifts of a million dollars or more, in 2012 and in 2013, that dropped to 60 percent. "Cultivating non-alumni donors has become more important than ever for philanthropic sustainability," the company insisted.