Across the United States and Canada, unemployment rates are hitting historic highs in the wake of the COVID-19 pandemic.
With the stay-at-home orders issued in an effort to mitigate the spread of the novel coronavirus, it’s not just higher education institutions who have had to recalibrate. Many businesses have had to lay off or furlough their employees to adapt.
As a result, over 30 million Americans filed unemployment claims in the six weeks following a state of emergency being declared. For context, the Great Recession in total led to 8.7 million job losses. The American unemployment rate in April 2020 hit 14.7%—more than three times the March rate of 4.4%.
By the same token, in March 2020, over 1 million Canadians lost their jobs. The previous high for single-month job losses was 124K in January 2009, at the height of the Great Recession. In April 2020, the Canadian unemployment rate soared to 13%.
With a fundamentally different recession underway, it’s essential that colleges and universities don’t rely on old playbooks to map out their next steps.
The Great Recession Playbook for Higher Ed
From 2007-2009, the “once-in-a-lifetime” Great Recession struck. Causing unprecedented joblessness and homelessness, higher education institutions were severely affected by slashed public funding and reduced household income.
There were two main “plays” colleges and universities ran to adapt at the time:
1) Wait for the Registrations to Roll In
Historically, higher education institutions have benefitted from a tendency for individuals to enroll in postsecondary offerings when the labor market sours. Between 1968-1988—a period that includes four US recessions—postsecondary enrollment increased 2% for every percentage point increase in national unemployment. In Canada, research found that laid-off workers are 2-4% more likely to enroll in postsecondary education within the year following job loss.
This trend remained in place during the 2007-2009 Great Recession for both countries.
2) Jack Up the Price
From 2007-2012, public college and university tuition and fees grew significantly to counteract the effect of reduced state funding. At universities, tuition and fees rose 27% after accounting for inflation, and at community colleges they rose 24%. In the states hit hardest by the Great Recession, prices increased between 30-40%.
This led to Pell Grant funding, financial aid and student loans rising astronomically through the same period.
In Canada, government funding for postsecondary education tailed off in the wake of the Great Recession, while institutional revenue generated from student fees has consistently grown by 6% annually since 2007.
3) Cast a Wider Net
Related to the last point, colleges and universities turned to non-local students—who pay higher tuition and fees—to make up for funding shortfalls during the Great Recession.
International student enrollments grew 112% from 2007-2012 at American public research universities. Across the entire US postsecondary landscape, international student numbers grew 30%. Broadly speaking, the uptick in international students accounted for 17% of the increase in tuition revenue industry-wide—and at some institutions, it accounted for as much as 40% of their revenue mix.
In Canada, international enrollments nearly doubled between 2009 and 2016, accounting for an industry-wide growth in revenue of $1.5 billion (CAD).
Why The Old Playbook Won’t Work
There are a few fundamental differences between the Pandemic and the Great Recession that will limit the effectiveness of higher education’s old recession playbook.
First, we’re unlikely to see folks rushing to degree programming like they did a decade ago. The majority of working adults today are Millennials, who graduated into the last recession and whose career and life progress stagnated as a result. These individuals still carry significant student loan debts, and won’t be likely to take out further loans for education that they believe offers poor ROI.
Instead, we’re seeing rising demand for career-oriented and non-degree education programming. 60% of Americans are looking for non-degree and skills-based education and training program in the wake of the coronavirus recession.
Second, travel is obviously severely limited, not just internationally but even within countries. Folks of all ages are uncomfortable leaving their local areas for any reason, much less to enroll in a postsecondary offering.
Instead, 46% of American adults report an interest in enrolling in online education. What’s more, 35% of high school seniors—the incoming traditional learner demographic—report that they’re re-assessing their fall college enrollment options as a result of COVID-19, looking more closely at schools closer to home.
Finally, the online skills-education marketplace is immensely competitive. There are MOOCs and bootcamps both in this marketplace, alongside private training providers and edupunk resources. So, unlike the Great Recession, colleges and universities will face still competition to enroll learners looking to educate themselves into a job.
Lean on Continuing and Workforce Education
Fortunately for most colleges and universities, they have divisions embedded on their campuses specifically designed to offer flexible, outcomes-oriented programming in a competitive environment to price-sensitive customers with high expectations.
Continuing and workforce education divisions make their bread-and-butter operating in this environment.
To continue supporting institutional success through this newest recession, it’s essential these divisions have the infrastructure and support mechanisms in place to drive their competitiveness. They need the right tools at their disposal to:
- Accelerate new offerings to market as quickly as possible
- Deliver a customer-centric experience that delivers eCommerce best practices
- Roll out flexibly-scheduled offerings to their learners and across the main campus.
With these capabilities in place, there’s no limit to the capacity for CE units to drive sustainable success for their main campus through the coming recession and into the future.
The EvoLLLution is publishing articles and interviews focused around higher education’s adaptation to the coronavirus pandemic. In addition, we’re developing whitepapers to help highlight some of the central trends we’re seeing rise across the board.
The newest paper, focused on how colleges and universities can adapt to the realities of the new recession, is available now to read.