A Response to Massification: Reaching New Students, Creating Capacity in the

Market, and Building Educational Institutions

Jonathan D. MathisProvost Fellow

University of Southern CaliforniaCenter for Higher Education

Policy Analysis

Presentation Outline• What is “massification”?• Massification in Practice

• Students• Market Capacity• Institutions

• How do we support the development of a knowledge-based economy?

• Publicly-traded Institutions• Role of Philanthropy

• Implications

What is “massification”?• Majority of society is expected to participate in

postsecondary education, including certificate, associate, baccalaureate, and graduate degree programs (Teichler, 1998)

• An increase in the number and diversity of institutions contributing to the development of active participants in a knowledge-based economy

• Seen as the result of accessible student financial aid, growth in college-aged student population, and increased corporate demands (Geiger, 2002)

Massification in Practice

Massification in Practice: Students

“…[I]n the past, college attendance was reserved mostly for the children of upper-class, well-educated families, [but] increases in the number and variety of institutions and the availability of aid programs…now make the option to attend college available to an increasing number of different types of students” (Burleson, 2010)

Massification in Practice: Students

Number of Bachelor’s Degree Recipients (per 100 persons)

Country 2004 2005 2006

Australia 46.9 59.9 59.6

Brazil 15.6 17.5 21.3

Denmark 49.9 52.9 50.3

Finland 54.7 53.8 57.3

Iceland 50.5 56.3 62.8

United States 33.2 34.2 35.5

OECD Average 34.3 36.3 37.8

Massification in Practice: Students

Percentage of Population Enrolled in Secondary Education (2006)

Country 16 years old 17 years old

Australia 94% 80%

Brazil 86% 82%

Denmark 91% 84%

Finland 96% 96%

Iceland 94% 84%

United States 93% 82%

Massification in Practice: Students

Country 18-21 Years Old

22 to 25 Years Old

26 to 29 Years Old

Australia 2005- 34%2006- 33%

2005- 21%2006- 21%

2005- 10%2006- 10%

Brazil 2005- 10%2006- 10%

2005- 9%2006- 10%

2005- 5%2006- 5%

Denmark 2005- 10%2006- 11%

2005- 34%2006- 34%

2005- 20%2006- 20%

Finland 2005- 24%2006- 24%

2005- 40%2006- 40%

2005- 20%2006- 21%

Iceland 2005- 12%2006- 12%

2005- 28%2006- 28%

2005- 16%2006- 16%

United States

2005- 45%2006- 46%

2005- 23%2006- 22%

2005- 11%2006- 11%

Percentage of Population Enrolled in Postsecondary Education

Massification in Practice: Market Capacity• Traditional universities cannot meet the demand of

massification due to the following constraints:• Physical space (campus capacity for growth)• Logistics (time and scheduling)• Instructional demands (faculty hires; tenure-tracks)• Costs• Capital Improvement

• Non-traditional students are now able to consider public, private, and for-profit postsecondary institutions

• Enrollment decisions might now include greater emphasis on desired collegiate experience, professional needs, and fit

Massification in Practice: Market Capacity

United StatesInstitution Type

2006-2007 Revenue (in millions)

Gifts, grants, contracts

(in millions)

Revenue per FTE Student(in dollars)

Expenses per FTE Student(in dollars)

Public Institutions(1,685 institutions)

$268,556 $5,589 2005-2006:$27,8892006-2007:$29,306

2005-2006:$25,6672006-2007:$26,062

Private, Not-For-Profit, Institutions(1,624 institutions)

$182,381 $20,193 2005-2006:$55,8592006-2007:$63,868

2005-2006:$42,7212006-2007:$43,619

For-Profit Institutions(1,043 institutions)

$13,978 $4 2005-2006:$14,8702006-2007:$15,364

2005-2006:$12,0612006-2007:$13,357

Massification in Practice: Institutions

Laureate Education, Inc.

45 accredited campus-based/ online universities; over 130 programs; nearly 500,000 students

The Open University

13 UK National and regional campus plus on-line options; 60 degree programs; over 250,000 students

Massification in Practice: Institutions

Capella Education Company

• 22 undergraduate and graduate programs; 111 specializations; nearly 27,000 students from United States & 52 countries

• Revenue: $272.3 million

(2008 Annual Report)• 45% Ethnic Minority

Students

Apollo Group, Inc. • Over 100 degree

programs ranging from undergraduate to graduate; 443,000 students; increasing international presence

• Revenue: $4.0 Billion (2009 Annual Report)• 48% Ethnic Minority

Students

How do we support the development of a knowledge-

based economy?• Publicly Traded Institutions (Stock market values as of

March 19, 2010)

– Apollo Group (NASDAQ:APOL): $64.37– Capella Education Company (NASDAQ:CPLA): $ 90.10

• Philanthropy• Joint Ventures and Collaborative Efforts• Government/National Policy

Implications• In responding to massification, entrepreneurs

and institutions consider the following interrelated factors informing the global postsecondary education market:– The rising middle class– Growing populations of school-aged youth– Human capital needs to service economies– Education as a lifelong pursuit– Governments unable to fully fund public universities

(Laureate Education, Inc.)

• Entrepreneurial efforts become instrumental in developing funding streams and joint ventures/collaborative degree programs among institutions

Center for Higher Education Policy Analysis

Rossier School of Education, WPH 701University of Southern California

Los Angeles, CA 90089-4037(213) 740-7218

www.usc.edu/dept/chepa