How the crisis might transform higher education: some scenarios Stéphan Vincent-Lancrin OECD Centre for Educational Research and Innovation
Mar 27, 2015
How the crisis might transform higher education: some scenarios
Stéphan Vincent-Lancrin
OECD Centre for Educational Research and Innovation
Outline
• Enrolments• Expenditure
– Levels– Possible impact on stakeholder
• Scenarios
Tertiary education enrolments
Evolution of the 18-24 population by 2025 (2005=100)
Source: United Nations, Population division (revision 2006)
Scenario 1: Projected tertiary enrolments in 2025 under current conditions (2005=100)
Source: OECD, Higher Education 2030, Vol. 1 Demography
Scenario 2: Projected tertiary enrolments in 2025 under recent trends (2005=100)
Source: OECD, Higher Education 2030, Vol. 1 Demography
Why the trend scenario is more likely…
• Supply will not be too limited– Knowledge economy– Crisis-related political reasons (better to
have students than unemployed people)
• Demand will increase– Individual returns remain high (compared
to high school returns)– Decrease of opportunity cost (crisis)– Demand of retraining from unemployed
workers– Less apprenticeship available (crisis)
…with limiting factors
• Rising cost to public authorities
• Rising cost to students and families in a context of unemployement and saving/capital losses
• Less ability to contribute of the business sector
Some qualitative changes in the student population
• More demand from mature students– More demand for short term programmes– More demand for vocational programmes
• More difficulties for students from lower working and lower middle classes– Where caps on student numbers– Where high tuition fees– Where insufficient student aid
Tertiary educational attainment (%) of 25-64 population
Impact on tertiary education expenditure
Projections of total expenditures for tertiary education institutions in 2025 (% of GDP):
pre-crisis scenario
Source: OECD, Higher Education 2030, Vol. 1 Demography
GDP set at 2% growth and educational costs per head projected linearly according to 1995-2005 growth rate (constant prices)
Change in student/staff ratio to stay at 2005 expenditure level
Possible Impact on stakeholders
Public funding for HE
Budget pressure• Unemployment and
social benefits• Consolidation of public
budgets• Ageing-related
expenditure• Continued expansion of
HE• Rise of eligible students
for student aid
Response (?)• Cuts on expenditures to
HEIs after relative protection under stimulus packages
• Slower growth of public expenditures in the longer run
• Rise in tuition fees• Inadequate student aid (?)• More competitive
allocation of funding and further segmentation of systems
Private funding for HEIs
Pressure• Less business:
– Cuts on R&D expenditures
– Cuts on corporate training
– Less endowments of foundations
– Less willingness to have interns and apprentices? (unless they can contribute to production)
Response (?)• Less ability to fund
university research, to fund their employees for training and and to participate in university programmes
• But this source of funding is marginal in most countries (except Canada and US)
Household funding for HEIs
Pressure• Decline in revenues of
parents• Less ability of
intergenerational transfer as older people are hit by budget consolidation
• Unemployment for parents and difficulty to work while studying
• Inadequate student aid for lower SES
Response (?)• Willingness to invest
more in HE where household cost has been low so far
• Difficulty to do so in countries where tuition have already rised significantly recently
Institutional response
Revenue• Raise tuition fee levels (if
they can)• Look for new revenues
(international students where differential fee, part-time students, further education, non-degree education, etc.)
• Compete more for research funding
• Efforts to raise more corporate funding where it is small (but slow process)
Cost• Postpone maintenance and
infrastructural costs, including library costs
• Look for further administrative efficiency
• Freeze hiring of new faculty • More differentiated status
of new faculty (teaching/research)
• Increase student/staff ratio or decrease face-to-face instructional time
Impact of the economic crisis
• Short term impact on access issues:– Increase in participation in tertiary education– Increase of the share of higher education expenditures in
public expenditures and GDP– Costs will be a limiting factor in countries where there is a
significant share of household funding– Possible rise in inequity
• Longer term impact:– Risk aversion of students and family: less confidence in
loans and financial products and less investment in higher education?
– Slowdown or acceleration of internationalisation?– Restructuring of higher education systems?
Intermediate conclusion
Before the crisis
• In most countries, the budgetary impact of the crisis was not significant
• Ageing could have affected priorities, but no strong evidence
After the crisis
• Budgetary impact could become more significant (under very conservative assumptions)
• Public consolidation after stimulus packages and crisis-related social benefits will make difficult for HE budget to grow
Scenarios in the light of the crisis
International
National
MarketDemand-driven
AdministrationSupply-driven
Scenarios for higher education systems
4 scenarios
• Open networking
• Serving local communities
• New public responsibility
• Higher education, Inc.
Scenario 1: Open Networking
Drivers
• International cooperation & harmonisation of systems
• Technology• Ideal of open knowledge
Related developments
• Bologna process, international academic partnerships and consortia,
• Increasing computing power and culture of openness challenging traditional intellectual property rights
Features
• Intensive networking among institutions, scholars, students (& industry)
• Modularisation of studies under academics’ control
• International collaborative research
• Strong hierarchy between networks but quick spillovers
• Lifelong learning outside the HE sector
Scenario 2: Serving local communities
Drivers
• Backlash against globalisation
• More geo-strategic sensitivity in research
• Cost efficiency
Related developments
• Anti-globalisation movements
• Crisis?
Features
• (Re)focus on national and local missions
• Public funding and control of the academic profession
• Convergence between universities and polytechnics
• Elite universities struggle to stay more internationalised
• Less research, mainly on humanities
• Big science relocated to government sector (more secretive and less internationalised)
Scenario 3: New public responsibility
Drivers
• Pressure on public budget (ageing, public debt, etc.)
• Diffusion of governance structures based on new public management
Related developments
• Autonomy given to HEIs (sometimes legally privatised)
• Debates on cost sharing• Encouragement of
competition between HEIs
Features
• Mainly public funding but autonomous institutions controlled at arm’s length (incentives + accountability)
• Mixed funding: new markets + more tuition fees (income contingent loans)
• Demand-driven system with more marked division of labour (specialisation but most HEIs continue to do some research)
• Research funds allocated through domestic competitive process (except for Europe)
Scenario 4: Higher education, Inc.
Drivers
• Trade liberalisation in education (GATS, bilateral)
Related developments
• Rise of trade in HE & inclusion of education in trade negotiations
• International competition for students
• Increase of cross-border funding of research
Features
• Global competition for education and research services
• Public funding for non-commercially viable disciplines exclusively
• Segmentation of the education and research market
• Vocational higher education: important share of the market
• Strong (international) division of labour according to competitive advantage
• Concentration of research and worldwide competition for funding
• English as main language of study
Serving Local Communities
International
National
MarketAdministration
Open Networking Higher Education Inc.
New Public Responsibility
Scenarios for higher education systems
New publication:Higher education to 2030
Forthcoming:
• Volume 2: technology• Volume 3:
Globalisation• Volume 4: Scenarios
THANK YOU
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