Management Consulting Firm, The MLC Group Responds to Moody’s Negative Short Term Outlook for Higher Education
On January 24th, The MLC Group, a strategic planning consultancy, responds to a recent article from Don Troop of The Chronicle of Higher Education, reporting that Moody’s had issued a negative short-term outlook for the entire Higher Education Sector.
Press Release – Charlotte, NC
The article states that pressures from reduced state-government appropriations, investment earnings, charitable gifts, research grants, and patient care reimbursements are negatively affecting the economic outlook for Higher Education. Normally thought to be safe due to their diverse sources of revenue, these institutions now face increased scrutiny and exposure to the lowered expectations in fundamental credit conditions of the industry.
The article goes on to state that the Moody’s Outlook Report, which is released annually at the beginning of the calendar year, bases its negative near-term outlook on five key drivers:
- Depressed family incomes and household net worth have suppressed net tuition growth.
- All revenue sources are strained; financial diversity no longer helps colleges.
- Rising student debt and default rates have hurt perceptions of the value of a diploma.
- Public and political scrutiny has increased the risk of more regulation.
- Colleges face a challenging future without strong leadership and better governance.
Lee Connellee, President of The MLC Group, responds to the article by saying that Higher Education is at tremendous risk. In addition to the above concerns, competition is coming from a variety of directions:
- Low cost competitors using technology and new models of education
- The high cost residential campus is at risk thru distance learning
- Corporate and For-Profit universities are developing out of a need to reduce learning/training costs of businesses
- Learning is becoming a strong “life-long” process for career security instead of a 4-year investment.
- The ongoing trend to increase the percentage of non-tenured faculty relative to that of tenured faculty is indicative of the changing cost and revenue structure
- The “Lecture” learning model is being replaced with experiential models of learning.
- The traditional roles of the University are being displaced by “Certification Programs” that offer more specific training and outcome based objectives.
“Colleges and Universities play a very important role in education, however, the rules of higher education are changing. The organization that is willing to respond to the marketplace and the changing needs of its stakeholders will have a strong competitive advantage over those that remain fixed in the past..”
Connellee adds, “Innovation is critical to the future of Higher Education. Colleges and Universities need to engage actively in strategically planning for a new future that responds to critical needs of its students/stakeholders, leverages technology, rethinks current staffing and education program models as well as collaborates with other organizations and embraces the life-long learning need of the workforce.”
The MLC Group – Because business needs clarity.
The MLC Group is a new breed of hybrid management consultants who bring innovative ideas and creative thinking strategies to organizations that want to improve the way they do business. The firm specializes in delivering world class strategic planning and facilitation services to executive teams using its proprietary VSE ProcessTM. Their services are designed to bring clarity to planning for the future as well as managing the day to day.
The MLC Group specializes in helping organizations solve complex issues, navigate change, plan for the future and develop strategic plans that include a clear execution strategy.