Hello, everyone. My name is Jitin Sethi, and I'm a founding member of LEK's education practice.
If you are a provider of higher education services like a university or a college in the US and are grappling with some of the challenges with regards to your enrollments and overall tuition fee revenue, I'll be talking to you about some of the strategic decisions that you could take in order to address those challenges. There are three key challenges that the higher education sector faces in the US.
Firstly, if you look at the overall enrollments in the higher education sector over the last decade, the sector has hardly grown from twenty twelve to twenty twenty four. The primary reason for this is a slowing down in the growth rate of the underlying population. So if you look at the number of students graduating from high school, that number has been slowing down in its growth rate and it's expected to peak in twenty twenty seven from where on it'll start declining, which will in fact exasperate the problem for high education institutions. Secondly, if you think about the value of high education, you know, all of us through our own experiences, through the experiences of our friends and family are fully aware of how much value higher education adds to an individual's life in terms of overall lifelong earnings.
However, there are some that challenge the fact that the higher education sector has not managed the costs effectively. So if you look at the rate at which the cost of a higher education degree has grown since the 1980s versus the beige growth, you'll see a stark difference and almost eight times difference in the growth of the cost of a degree versus the wages of an individual.
And thirdly, as a result of that, there are many alternate higher education models that emerged to challenge the traditional higher education sector.
For students that are not able to get a high quality education seat in the traditional sector or those that are very cost conscious, these models offer them an alternate way to get their education needs fulfilled. So these challenges, which is declining demographics, increasing cost of high education, and emerging challenger education models are going to put a lot of pressure on traditional universities and colleges. And these institutions will have to think about some of the solutions to these challenges.
