Ivory Tower: What’s Wrong With Higher Education?

A disturbing state of higher education in the US is the question that causes serious concerns in the society. The exorbitant prices for tuition at a college make higher education a privilege, not a possibility. At the same time, the decrease of its quality poses a threat to the promising future of the American society since it discourages a large number of students to pay enough attention to the academic development.

The Issue of the Ivory Tower Documentary

The main themes of Ivory Tower are the current state of the American higher education system and the ways of its improvement. The authors of this documentary aimed to highlight the existence of a crisis in the US system of higher education. One of the most important issues in this sphere concerns the discrepancy between the high prices of educational services and the poor quality of the knowledge (Ivory Tower, 2014, 00:02:30-00:03:00). Unreasonably costly tuition fees led to the situation when a number of educational credits surpassed the sum of $1 trillion. Such issue creates the risks not only for the education system but for the economy of the state as a whole. While a large number of students are not able to repay the loan after graduation, the credit bubble continues to grow. One day, the level of unsecured credit debt can reach a risk line triggering the beginning of the economic crisis.

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At the same time, the financial side of the question is not the only source of problems. In fact, it is the consequence of those processes that have been taking place in the US system of higher education during the last decades. Unfortunately, the US higher education becomes not a public good, but a market service losing its main social goal. The authors of the film define this problem as a dilemma of social and economic nature of the college (Ivory Tower, 2014, 00:10:30-00:11:30). In the modern life, a learning institution becomes a full-fledged player in the market of educational services. The management of each college aims to provide a more attractive proposal for the student taking little notice of the educational opportunities. The student is interested in lower studying loads, whereas lecturers seek to make private profit on research, not education. Therefore, colleges become a place of students’ vacation where they engage in every activity except for studying (Ivory Tower, 2014, 00:18:00-00:18:30).  The growth of the expenses of the educational institution is related to an increase in the administrative staff, which is required to provide the vacation facilities for the student. At the same time, the variety of entertainment possibilities in the college distracts the undergraduates from learning the material. As a result, the majority of classmen spends only about 5 hours per week on studying (Ivory Tower, 2014, 00:20:30-00:21:00). Certainly, such drawbacks do not contribute to an effective educational system.

Nevertheless, there are other forms of higher education that are also available in the US. They include the studying in a closed community, similarly to the Deep Springs College. Such approach to higher education provides certain advantages in comparison to the modern city college, but it still cannot guarantee the efficiency of the learning process due to limited resources. At the same time, it gives an opportunity for students’ personal development.

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Another alternative discussed in the film is the higher education on the Internet. Though it seems to be the most suitable opportunity for the teenagers with lower income, the results of such projects did not prove their effectiveness. The failure of the Udacity online education project exemplifies the inability of remote learning systems to uphold the required standards (Ivory Tower, 2014, 01:17:00-01:18:00). The basic disadvantage of such approach is the absence of feedback from the professor. Though the online lectures can provide the information of high quality, it is impossible to cover the material and clarify possible questions in the offline mode. In this case, the idea of US community colleges seems to be more viable since it gives professors feedback for every student but does not require the same amount of funds as the classic college.

In general, the dilemma of high costs of education in the US remains the most important issue of the consideration. Obviously, the government and educational specialists should introduce some amendments to the system of higher education in order to ensure the academic progress of undergraduates.

General Environment

The analysis of general environment is extremely important for each organization since it allows to define the specifics of the external factors that will affect its activity. As for the higher education industry, the most important external segments are demographic, political, and economic. They provide the information about the perspectives of the current higher education system in the US.

Demographic Segment

In this sphere, it is necessary to define whether the American society can provide the satisfactory level of demand for the existing educational services depending on their price and quality. It can be useful to compare the income distribution in the US with the tuition fees. Also, the researcher should analyze the age structure of the American society to determine a number of potential students who will need educational services in the future. Certainly, it is obvious that the foreign undergraduates are also welcome in the US colleges; however, this analysis does not include them in the student body.

First, the College Board organization assessed the average undergraduate charges for the college at the level from $11,580 to $45,370 per year (Bridgestock, 2016). The next step is to compare these prices with the income distribution in the state. The comparison of these values shows that only about 25 % of the American households obtain annual income higher than $ 100,000 (Statista, 2016), which allows them to pay for one child’s education at the most expensive college. As for the cheapest community colleges, which require approximately $17,000 per year, about 55 % of the American households with annual income higher than $ 50,000 can afford such education without overspending the family budget.

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Speaking of the age distribution in the US, the citizens aged 15-24 years who are the main customers of college services, account for about 13.46 % of the country’s population structure (Index Mundi, 2016). In the natural measurement, it comprises about 43,612,557 people in 2016. Though it seems to be a considerable number, it is important to evaluate the distribution of wealth inside this demographic group. It is impossible to say that 25 % of this number will surely become the students of expensive colleges. The latest demographic studies show that the families with a low income frequently have more children than middle-class or wealthy Americans. This argument particularly concerns national minorities and migrants who often cannot afford a college education.

In general, the analysis of demographics shows that the higher education is becoming less accessible to most Americans.

Political Segment

It is important to define whether the government is interested in the increase in the number of students and ready to provide certain incentives for colleges. The first political factor is the level of state’s intervention in colleges’ activity. The US law defines the clear link between the authorities of each state and educational institutions. At the same time, colleges usually obtain a high level of autonomy (Eckel, King, p.3).

Evidently, the situation with governmental financing of colleges has been quite difficult for the last years. At the same time, the new US President proclaimed the necessity of providing governmental support for the successful students who cannot afford to study at the college. Such intention of the new administration gives a chance for optimism.

Economic Segment

The economic conditions have a serious effect on the colleges’ performance. They define the level of citizens’ demand for educational services and their ability to pay for expensive learning institutions. First, it is necessary to analyze the possible changes of the student loan rates that will result from the growth of Fed’s interest rate. Since President Trump requested the Fed to increase the basic interest rate, this decision will definitely lead to a surge in the students’ loan repayments. Such result does not encourage more undergraduates to join an educational institution and will necessitate the colleges’ management searching new ways to attract young people.

Another economic indicator that can serve for the analysis of the higher education’ perspectives in the US is the personal savings rate. Since most of the American households prefer to use savings to pay for the education of children, the changes of this rate can help the researcher to predict future demand. As for the January 2017, the US personal savings rate was 5.5 % (Federal Reserve Bank, 2017). The indicator declined significantly in comparison to 6.2 % in 2016 and 11 % in 2012 respectively. Such tendency shows that the Americans face a large number of problems when trying to save funds for studying. In this way, the students’ loans can be the only source of payment for higher education.

Five Forces

Threat of New Entrants

The latest practice shows that more students prefer to use online courses due to their cheapness and availability. As for the classic colleges, the barriers to access are high. First, the initiative group will have to face a number of regulative requirements and provide significant funding. The new college in its turn should adapt its services to the characteristics of the industry leaders to reach success. Another issue is the necessity to create a good reputation and collect competent professors. Most students prefer to join the colleges of international stature. Thus, a newcomer will have to make a lot of efforts in order to draw an entrant. At this point, the threat of entrant is low.

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The online courses present a threat to the classic learning institutions. At the same time, they cannot prove the educational effectiveness and substantiate the claims of the achieved knowledge. Moreover, the employer is more likely to accept an employee with a college diploma than a person with a certificate of online courses. However, if the remote education manages to reach a new qualitative level, it can be able to compete with the prestigious colleges. Nevertheless, the necessity to build a reputation and seek professionals also creates limitations for the newcomers. Thus, the threat of entrants is moderate.

Threat of Substitutes

At this stage, the researcher will also have to compare a classic college with online courses. Due to the availability of Internet, everyone has a chance to achieve certain qualification. However, the question of quality remains ambiguous. As for the classic colleges, most of the modern institutions do not seem to endeavour to obtain higher educational standards. Instead, they prefer to rely on better vacation activities for students. Thus, those who are genuinely determined to achieve well-rounded education can choose a community college with low fees. In general, the threat of substitutes in the industry is high.

Bargaining Power of Customers

In the contemporary world, higher education is the privilege that each person aims to achieve. Nevertheless, if individuals change their attitude to the higher education and understand that it is not a key factor in success, the situation can alter significantly. The colleges have to constantly monitor students’ preferences to survive in the market. Further development of online education can force entrants to seek more favorable studying conditions. In this way, the bargaining power of customers is high.

Bargaining Power of Suppliers

To evaluate this indicator, it is important to define the key suppliers for the industry. In general, they include employees of the colleges and the utility services companies. The former constitute a serious factor of the college’s success. If the management fails to attract and keep qualified professors, the college can tarnish its reputation. At the same time, because of redundancy, employees can always move to other educational institutions. However, before making a decision, they should also assess the possibility of effective work in a new place. Hence, the bargaining power of suppliers is moderate.

Industry Rivalry

According to earlier discussed arguments, the higher education is an extremely competitive industry that requires its members to constantly adapt their activity to the competitors and the external environment. The industry is very challenging for the new players demanding valuable contribution and professionalism.

The Required Changes

The Ivory Tower documentary had highlighted several serious problems in the sphere of higher education that will require certain solutions in the future. Thus, it is evident that new approaches are needed. The most important change concerning the higher education system should be a greater orientation of the student to learning rather than entertainment. At this stage, the college will require the effective cooperation of management and teaching staff. Additionally, employees should invent a system of stimulus that will encourage them to improve students’ performance. It makes sense to introduce allowances for professors who substantially contribute to students’ academic progress. At the same time, the management should develop objective methods of the performance evaluation, which will allow to avoid the possibility of subjectivity during the assessment.

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As for the students, the college should also invent a system that would incentivize them. It is important to state that the colleges should not become monasteries for hermits with no place for entertainment. Young people should have an opportunity for participation in sports and social events. The college can motivate students to reach higher results by a certain financial stimulus. Since most of the students face the problem of high fees, it should grant certain discounts for the students with consistently high academic performance. For example, the publicly-funded university can provide state compensation for a part of the fees. Therefore, such rewarding system will definitely encourage students to work harder.

Conclusion

The Ivory Tower documentary highlights the importance of the higher education issue for the American society. The main problem is that a substantial quantity of families has a desire to give a higher education to their child but cannot afford high tuition fees. At the same time, the high level of competition in the industry forces colleges to improve their services and increase the tuition rate. Thus, the problem resembles a vicious circle, and the online courses did not prove to be an effective alternative. However, the system of stimulus for employees and students can become a compromise solution.

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