Eduventures’ 2016 Higher Ed Predictions:
A Year to Unite
Heading into the year with these broader trends in mind, here is what we expect for higher education in 2016:
The market for online proctoring is poised to go mainstream in 2016. Eduventures market analysis suggests that about 1,000 universities and colleges currently use some form of online proctoring, about a quarter of the total. A majority of institutions now offer at least a few online degrees, not to mention hybrid programs and online courses. Concerns about student cheating, closer scrutiny of student assessment, and the cost advantages over in-person solutions point to a bigger role for online proctoring. We expect the number of institutions using any form of online proctoring to increase from 1,000 in 2015 to 2,000 in 2016, hitting about 50% of the market. Testing centers without institutional relationships will account for another 1,000-2,000 sites. Providers will consolidate or collaborate to provide comprehensive menus of online proctoring options, including fully live, record-and-review, fully automated, and in-person options. Eduventures will publish more analysis on this market in 2016.
Enrollment & Institutions
Flat overall enrollments among traditional-age learners, an ongoing decline among adults, and online enrollment up only in the single digits signal another challenging year for many colleges and small, private institutions in particular. The number of high school graduates peaked back in 2009 and will be flat at best for the next decade. Adult demographics are positive, but enrollment is counter-cyclical. Short of another recession, colleges will have to work extra hard to grow adult student numbers. Online enrollment is still a bright spot, but the market is ever more crowded as colleges of all types turn to online to make up for poor performance elsewhere.
Overall, this enrollment environment favors well branded institutions that are willing to grow and niche players with a distinct message that the market values. Other institutions will need to increase financial aid allocations further yet to meet their enrollment goals and make renewed efforts in retention to make up for revenue shortfalls. We expect to see increased merger activity among non-profit colleges, if tempered by constituent resistance. Additionally, institutional credit rating downgrades will increase 25% year-over-year, particularly among private colleges with enrollments below 1,000 students. Look for double-digit growth in the number of public-private partnerships—such as with online program management firms or international student pathway companies—as colleges seek to monetize their assets and raise much needed capital.
We also expect alternatives and complements to traditional degree programs (e.g., boot camps, competency-based education), touting faster, cheaper programs and enhanced employability to accelerate. The U.S. Department of Education’s new experimental sites initiative, to kick off this year, will offer participating providers access to federal aid. Just possibly another major for-profit institution will go bankrupt, trapped by regulator scrutiny, crashing enrollment, and loss of investor confidence.