Consumption Patterns Disrupted: A ‘New Normal’ for Higher Education

Apr 22, 2020

Current crisis has a chilling note for education sector with a silver lining.


  • Colleges and universities will take record budgetary hits as they respond to the virus outbreak.
  • Online education, by sheer virtue of bringing together educators, students, and convenience of internet, holds immense potential. Students have expressed interest in taking online courses and certifications.
  • Recessionary period caused by coronavirus is not likely to show upward trends in college admissions as seen in previous recessions. Conversely, there may be an upswing in online enrolments.
  • Leaders and educators adept in alternative delivery models of learning and upskilling will be crucial for higher education.

Universities are due for what Joseph Schumpeter, an Austrian economist, called “creative destruction.” By the looks of it, the time has come for education leaders to carve out a new normal for higher education.

From Boston and London to Cape Town and Hong Kong, traditional track, in-person university programs are showing strains of broken revenue models, receding enrolment and pricing pressures.

As the sector braces for economic and logistical fallouts due to COVID-19, there is a sense that the crisis will prove the tipping point for higher education. Forcing it to adapt teaching practices and unearth new ways of learning and collaboration.

Fault Lines

Within a few days, campuses were closed, and every tutorial, seminar and class put online. A large number of students were catapulted into Zoom-meetings and video conference calls to attend lectures. As the institutions shifted online and vacated dormitories, the process rendered open the lesions, which in past were ignored by higher education.

Colleges and universities are on the tenterhooks of declining student enrolments, public support, and revenue sources. In recent years, they have come to rely on tuition fees and auxiliary areas of operations – housing, dining, parking, athletics – for majority of revenues. Both stand to face immediate declines.

There is a question about whether students will pay fees for a full-time course when they are getting education online. Additionally, those sent home may decide not to come back in the fall if threat remains. Some universities are already promising partial refunds for the room and other auxiliary expenses causing a dent in operations.

Colleges are getting calls from upset students demanding tuition fee refunds.

Perhaps a much bigger concern is, what will the crisis do to the future student enrolments? The rising cost of college tuition and debt has been putting a downward thrust on enrolments since a decade. In countries where student enrolments are growing, skill gap remains a challenge, bringing to light the questionable returns from education.

A student poll by Arts & Science Group LLC shows within the US, one in every six high school seniors is thinking of giving up the idea of attending 4-year college program. A few are more interested in taking online courses as part of their post-secondary education. Then there is falling demand from foreign students, who pay higher tuition. The Moody Investors Service lowered its credit outlook for higher education from ‘stable’ to ‘negative’ due to limited enrolments, and drop-off in research grants, philanthropy, and endowments. The uncertainty around enrolments has a wide-ranging impact. If a batch is not at its optimum in one year, it will remain empty in the following. It can lead to dismissals of tenured faculty and paring of non-teaching staff.

Of the international students who planned to study abroad, 10% would instead stay at home and another 37% would change the first choice of college due to COVID-19 - QS Survey

Can Online Tutoring Save Higher Education from Recession?

Education has a peculiar relation with the recession. When economy stalls, the demand for education typically rises. As the reality sinks in, there are no jobs, people go back to school to better their career prospects. The signs are there. Seniors graduating this year are uncertain about the future of job market. Student internships are either being deferred or shortened by cash strapped businesses.

College enrolments surged after 2008 financial crisis. Will the history repeat itself as coronavirus triggers global recession? No telling. The contexts leading up to present recession are different. It’s about health. The back-to-school rush may be limited in the short-run if the threat from virus continues. Moreover, in 2008, student enrolments were rising. The trend is absent today in the developed world.

If the unemployed do decide to return to school, online universities will be the big beneficiaries -The Hechinger Report

Presumably, what then can salvage colleges and universities in poor financial shape is a paradigm shift in education delivery models.

Retrofitting Higher Education

Traditional universities weren’t designed to change curricula and introduce new classes at a pace with ever-changing industry needs. The crisis has ideally positioned the institutions to experiment and mutate – with the use of technology. Ideas worth discussing:

Online Systems. Redefining educators.

A sizable number of students intend on obtaining education that’s less expensive and more convenient. Investing in alternative delivery models will prepare institutions not only for the rainy day; if done properly, they can gain a long-term competitive edge as well.

Diversify your offerings. Venture into non-degree certifications and vocational courses. Skills with longer shelf life become critical in crisis times. Politicians in many countries encourage vocational courses as a response to raise graduate unemployment. Dynamic pricing strategy can be utilized to balance supply and demand of courses more in vogue.

The key to successful integration is to understand that digital classrooms are less about imparting knowledge that’s a few clicks away, and more about offering experiences. It entails redefining the role of educators in online classrooms.

Build your own capacity.

There is no denying the merits of face to face connection: being able to walk up to the professor, debate with peers, sit in library with endless rows of books. Equally indisputably, the near future of higher education is linked with digital and it’s time the subject is given due emphasis.

While web conferencing platforms such as Zoom are available, to be best-in-class, it would be prudent to build your own capacity for online teaching and learning. It will bolster in-house capacity (dedicated capital, instructional designer, video educators and project managers) and allow you to control the content you do and do not decide to open-source. IESE Business School in Barcelona uses its own virtual teaching technology, in which up to 80 people can interact remotely at the same time. It’s like building your digital lecture halls.

Create standards. Change your metrics.

Alternative teaching and learning models also present risks. As new models proliferate and students forgo the traditional path for alternative programs, several critical questions will need to be answered. How do you stack up the skills acquired remotely with a degree program, sizing up the quality of material provided online, the role of novel programs in preparing students for gainful employment, and more. The process will essentially require developing best practices for EdTech.

Higher education is the ground zero for disruption. Traditionally, the education obtained in college served one for a lifetime. Its shelf life has declined today. At long last, educational leaders have the opportunity to reimagine higher education and bring it up to speed with the industry developments. Toward making education more relevant.

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