For decades, higher education has been a stepping stone to career success. But today, students, parents, and employers are questioning its value. Rising tuition, staggering student debt, and a shifting job market are forcing a fundamental rethink: Is college still the best path forward?
The Crisis of Cost vs. ROI
Tuition has increased by 170% since 1980, while graduate salaries have only risen about 19-20%. Students are taking on massive debt with uncertain returns, prompting them to ask: “Is a degree worth it?” While some fields (STEM, finance, healthcare) still offer strong ROI, others leave students financially strained without clear career prospects.
Employers are Changing the Game
Businesses are questioning the need for degrees. Many now prioritize skills over formal education. Tech giants like Google and IBM have already removed degree requirements for many roles, shifting focus to competencies gained through experience, certifications, and self-directed learning.
Micro-Credentials & the Rise of Alternative Education
Online platforms like Coursera, edX, and Minerva are revolutionizing learning. They allow students to take industry-relevant courses at a fraction of the cost, often from top universities. This trend suggests a future where students build portfolios of skills with personalised learning experiences over time rather than, or in addition to, following a traditional and rigid four-year degree structure.
The University Model Must Adapt
Many traditional institutions are struggling to keep up. Since 2016, over 100 colleges in the U.S. have shut down, largely due to financial strain and the inability to innovate. The successful universities of the future will embrace hybrid models—blending in-person experiences with flexible, online learning pathways designed to meet student and employer needs – as compared to the inherently inflexible higher education model in place today that prioritises academic research and leads to unaffordable student fees to subsidise that research.
The Role of AI and Technology
Artificial intelligence and automation are reshaping industries at an unprecedented pace, and higher education must keep up. AI-driven tutoring, adaptive learning platforms, and automated grading are already making education more efficient. Universities that integrate AI into their curriculum will better prepare students for the future workforce. Additionally, AI-powered skills assessment tools are helping companies determine candidates’ competencies beyond traditional degrees.
The Unbundling of Higher Education
The traditional university model is giving way to a more modular approach. Instead of a single, expensive degree, an increasing number of students are opting for smaller, stackable credentials that offer immediate value. This shift allows individuals to learn as they go, focusing on skills that align with evolving job market demands. Universities that resist this shift risk falling behind.
The Impact on Workforce Development
As employers become more skills-focused, the role of traditional universities is being challenged. Apprenticeships, bootcamps, and hands-on training programs are gaining traction as viable alternatives to college degrees. Companies are increasingly developing their own training pipelines, reducing reliance on traditional higher education institutions. This change could significantly alter how industries recruit and develop talent in the coming decade.
Financial Challenges for Universities
With declining enrolment and increasing scepticism about the value of a degree, universities face financial instability. Many smaller colleges are struggling to justify their high tuition costs, while elite institutions with strong reputations continue to thrive. This widening gap between well-funded universities and those on the brink of closure is reshaping the higher education landscape, forcing institutions to rethink their business models and revenue streams.
The Path Forward
Higher education isn’t dying—it’s evolving. Institutions that embrace flexibility, innovation, and a focus on student outcomes will thrive. More nimble institutions will discover and exploit new business models for higher education even as employers seek more dynamic workforce solutions. Those institutions that move too slowly, relying on traditional assumptions about education supply and demand, and seek to perpetuate obsolete business models will disappear.
To hear more about the future of education and what it means for you, listen to our latest episode of The Insurgent Mindset.