2016 Predictions: More Outside Management of Online Degrees, CRM Buying and Competition for Traditional Colleges

• By Dian Schaffhauser
• 01/05/16

The number of public-private partnerships between institutions of higher education and service providers that manage online degree programs and pathways for international students will increase by double digits in 2016, according to new predictions from advisory firm Eduventures. Likewise, the company is forecasting that online proctoring will go mainstream in the new year. And as many as one in 10 colleges will be acquiring a new constituent relationship management (CRM) system over the next 12 months.

Eduventures, which researches the forces that affect colleges and universities, expects the year to be a "challenging one for higher education," said Chief Research Officer Richard Garrett and Senior Fellow Kenneth Hartman in a press release. They noted that traditional-age enrollment is flat, adult numbers are down and online enrollment — a crowded market — is stuck in single digit growth.

The winners, they said, would be those colleges that are "well branded" and "willing to grow," as well as "niche players with a distinct message that the market values."

Eduventures anticipates seeing "increased merger activity" among nonprofit colleges and a 25 percent increase in the number of institutions that receive credit rating downgrades, especially among small private colleges that have enrollments below a thousand.

Partnerships with service providers will come in, Garrett and Hartman said, as a way to maximize school assets and raise capital.

The education segment can expect to see an increase in the number of programs that serve as alternatives or complements to traditional degree programs. These organizations promise "faster, cheaper" courses intended to enhance employability and will get support from the U.S. Department of Education, which is expected to kick off an experimental sites initiative to give these education innovators access to federal aid.

This is the year when online proctoring will gain momentum, according to Eduventures, which forecasts that the use of this type of service will double from 1,000 institutions in 2015 to about 2,000 in 2016, finding some level of adoption in about half of all American colleges and universities.

Open educational resources (OER) may also finally reach a tipping point in the coming year, the advisory firm suggested, as details unfold from the adoption undertaken at the University of Maryland University College. Last year the online college replaced 100 percent of its undergraduate textbooks with no-cost digital alternatives.

Eduventures research shows that pickup of new constituent relationship management systems is in the wings to help schools get closer to their advancement contacts, especially alumni. While the analysts estimated that 40 percent of large development offices have switched to a new CRM in the past five years, the count is closer to 8 percent for mid-sized development offices and 6 percent for small ones. The company identified this lack as a "great opportunity" for both schools and CRM vendors, forecasting that "as much as 10 percent of all colleges" will seek a new system in 2016. The tricky part will be how well vendors can address "the integration of different CRM systems across campus" with their solutions and help their customers make the best use of the software.

The firm's final prediction addresses teacher education. With the adoption of the Every Student Succeeds Act (ESSA), which gives states considerable leeway in how to prepare their teachers for the classroom, states will begin to "further favor alternative teacher preparation options," Eduventures noted, continuing a downward pattern in the number of degrees issued by colleges of education. That was 70 percent a decade ago; the company expects it to hit 60 percent this year. Calling the next few years a "matter of trial and error," the analysts anticipate schools of education doing more experimentation with "alternative models."