Three Boxes of Challenges

I generally focus this blog on faculty culture, staffing, job duties, etc, but feel the need to write a broader piece regarding what I view as the main challenges facing boarding schools in the next five to seven years. As a policy guy and overall data geek, I will start there; with the numbers.

Most boarding schools have a blind spot when it comes to the greater goings on of economics and demographics. As such, schools are not prepared for when these areas converge on them. The current economic state appears to be good, but as Thomas Picketty states, it is a “mirage economy.” In this sense, GDP growth, low unemployment, and a soaring stock market are all papering over some significant structural issues that will surface at some point in the near future. Debt, both personal and national, is unsustainable. $22T plus national debt. $1.5T in student loan debt. 42% of American homes are worth less than the mortgage. All of this will be amplified when the stock market adjusts downwards and the true health of companies is revealed. In turn, boarding schools will feel the ripple effect as parents tighten their belts, students shift away from the “college for all” model due to an unwillingness to take on massive debt for a degree of dubious value, and the supply of international students become smaller and more diluted due to boarding options in Canada, the UK, and China that offer similar programs at a savings of money or distance. Schools that borrowed heavily to fund building projects could be faced with reduced revenue as the result of a shrinking student body. Schools that are heavily dependent on tuition for operating revenue (80% or more) will feel this most acutely.

Coexisting with this financial box is the shrinking supply of school-aged children. An issue in each and every aging post-post-industrial society, birthrates are declining sharply as economies shift, religion wanes, and couples put off having children, have fewer children, or decide against having children at all. The current birthrate in the United States is 1.76 and is now at a 30 year low. As it stands, we now have more deaths than births. As schools work hard to increase the number of full-pay domestic boarding students, this number should be at the forefront of everyone’s admissions plan. Analyst “project” a rebound in births by 2026, but this is based on assumptions and trends, not a surefire event by any means. Additionally, this decade of decline is something not all schools will have the ability to adjust for, or even weather. If a certain school relies on 90% of its operating budget from tuition, how long can they maintain their current structure if they lose 10% of their student population? Will this shift lead to schools downsizing? If yes, what will schools look like if they are leaner and more efficient? Athletics? Size of faculty? Redundant buildings and programs?

The final box has to do with the rising generation of workers. I have written about this before, but it is worth mentioning here. As Baby Boomers retire in increasing numbers through 2025, schools will be hiring workers that have very different views, needs, beliefs, values, and skills from the Boomer generation. Hyper-specialization in subjects and athletics will put pressure on the triple-threat model. High student debt loads will impact whether or not talented candidates can afford to teach. Attitudes whereby Gen Y and Z see work as a means to an end and not something that defines them as people will make it harder to find the kind of dedication schools value dearly. As well, a more transient view of employment means turnover at schools could be high, impacting culture and continuity.

So, what are the potential solutions to the potential boxes of challenges? Flexibility is key, as schools will need to adapt to new realities that may or may not be aligned with the way schools have operated in the past. If the definition of “higher education” becomes broader, what then does college prep mean? Can schools expand offerings to offer micro-credentials and dual-enrollment? Can schools fill the gaps in workforce training, sending graduates directly into the job force and bypassing college completely? Schools will need to explore scenarios where they are smaller or, at least, more efficient, thus reducing the revenue needed to operate. For schools with high debt loads, this may prove impossible. Schools will need to adapt to downwards trends within the market given how it will impact endowments, retirement funds, and the pool of families who derive their wealth from a robust bull market. Schools should review their staffing models and workload assignments with an eye towards aligning workplace culture with the beliefs and values of Gen Y and Z workers. This may mean modifying expectations for what defines FT employees working in a one size fits all model such as the Rule of 7 (Teach 4, Coach 2, Res Life 1). Boarding schools should be paying close attention to what is occurring to small liberal arts colleges, as they are seeing the changes up-close and, at times, finding themselves unable to adapt. (Green Mountain College, etc) Finally, schools need to be honest with themselves. Are they viable in their current iterations? Can they “rebrand” and evolve past the 9-12 college prep model? Should they “right size” to address admissions shortfalls? Schools have options and not everything is doom and gloom. Boarding schools offer an unparalleled transformational educational experience and should wear that badge proudly. However, they also need to move beyond “trying harder” or trying to do “the wrong things righter” as they approach programs, admissions, staffing, and funding. Innovation will be paramount to the success of boarding schools save a select few. Emerging technology and educational theories can be the drivers of both change and sustainability in boarding schools and this should be exciting. So, it is time to unpack the three boxes and get to work.