The Graduate Degree Market is Booming (for some...)

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0:00:13.8 Speaker 1: Hello and welcome to Office Hours with the EAB. Today, we look at what’s driving the explosive growth in the graduate degree market, and we dig into the data to show this rising tide is not lifting all boats. Our experts highlight the types of degrees, delivery formats and pricing models driving much of the growth and offer tips for institutional leaders on how to reach and enroll more perspective students. Give these folks a listen and enjoy.

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0:00:49.0 Will Lamb: Well, hello everybody. Thank you for joining us today for this episode of Office Hours. My name is Will Lamb, I’m the Dean for Graduate and Adult Learner Recruitment at EAB, a former business school dean who works with our partners as they’re thinking about trends in the market, things to be doing to programs and ideas for how to draw more students into those programs. That’s what I do at EAB. I wanna introduce my colleague for our discussion today, Brian Schueler from EAB. Brian, why don’t you tell us a little bit about what you do at EAB and perhaps a little bit about the research project we’re gonna talk about today?

0:01:23.8 Brian Schueler: Yeah, thank you, Will. My name is Brian Schueler, I’m an Associate Director here at EAB on our research side. And what I’ve been doing over the last few years is focused on mostly data-related research, working with the data sets that we have, trying to pull out unique insights for our partners that are gonna help with making strategic decisions, primarily on undergraduate and graduate enrollment, but across lots of different areas. And this project that we’re talking about today comes actually at work we did originally in 2019, when we put together our blueprint for growth research that was really looking at what’s going on in the graduate enrollment space, graduate programs, what can we say about these areas as well as adult education.

0:02:13.5 BS: In 2019, we put together some really cool slides, I think pulled out some really interesting insights, but as the years tick by, we realized, “Hey, we needed to refresh this content, we needed to take another look into the data.” And so today we’re talking about some of our… What initially started out as just, “Let’s update the data, update those slides, we’ll send them out,” and we actually found that over the past few years, some things have changed and some elements of what we’re seeing in the market, and the trends there, are changing in ways that affect the strategy, and so wanting to pull out some of those really interesting sort of shifts that we’ve seen in the market.

0:02:52.6 WL: Yeah. And I’ve gotten to use the material that you all came up with many times with partners, I know people are under an enormous amount of pressure for enrollments. One of the things that’s nice about your project has been that it helps people put things in context, and it helps them lead a conversation across campus that’s more fruitful and more realistic based on what’s going on out there. People who are responsible for enrollments or worried about the growth of their programs, they’re under a lot of pressure because of the revenue importance of so many of these programs, and if the campus doesn’t understand that this is a result relative to what’s going on in a market in general, then it can put people unfairly under a lot of extra pressure.

0:03:39.1 WL: So I’ve really appreciated the fact that you’re helping us explain to people more clearly what’s going on and how they’re doing relative to how they should be doing based on so many different variables that you’ve been able to unpack and look at. And I know everyone is still worried about the fact that undergraduate enrollments are gonna be challenge for some time now, and that’s making graduate enrollments and other unique approaches that could drive revenue more important for schools to consider than ever. And I know one of the findings you had was that graduate did grow much more than expected over the last couple of years in conjunction with the pandemic. But I’d be curious to hear you break apart a little bit what that means, ’cause sometimes I start with that when I’m talking with partners and I see them get a little bit worried that the market seems to be doing well, but it’s a very complicated picture when you scrape below the surface.

0:04:37.4 BS: It is, yeah. So at that high level, yes, we’ve seen the graduate education market grow, we saw that during 2020 as well as 2021, actually some of the fastest growth in the past decade, and this is actually something that we had projected out, we were putting together our estimates back in June 2020 of what the pandemic was going to do to enrollments and they were early, rough estimates. But we were looking at how unemployment and how there’s this counter-cyclical trend in education, and we felt like this is likely in the past, we’ve seen graduate enrollments go up when unemployment went up, and again, we saw that in fall of 2020, the uncertainty in the labor market led to more folks deciding, “Hey, let’s go back to grad school, let’s sort of provide ourselves with this insurance policy in one aspect.”

0:05:35.4 BS: So that if they lose their job or something happens, they have this degree, they’re working on moving towards adding skills that can make them more palatable in the labor force. Our projection model that we built actually was really pretty darn close to what happened, I think we were off by 1% or so in terms of that boost in 2020. Thing is, is that for 2021, unemployment all the way had gone way back down to below its long-term trend, and we still saw growth and so sort of an interesting element there where probably wasn’t unemployment-driven in 2021. But more of this shift in the market where graduate education had become… Some of the barriers to it had gone away, we saw more ability for folks to be going online and for people thinking about going to grad school, all of the sudden, online grad school wasn’t this sort of foreign strange thing that only a few people did, but actually everyone is now familiar with going to school online, everyone is familiar with going to work online because of the pandemic.

0:06:43.0 BS: And so I think that’s part of what played a role in the continued growth in 2021, and so really sort of interesting elements there and a lot of those benefits to the growth of grad education ended up actually accruing to some of those institutions that were typically a little more online before the pandemic as well, so yeah, definitely this sort of growth, but if you haven’t seen it, if it hasn’t been feeling on your campus, you’re not alone in that.

0:07:16.5 WL: Yeah. I was gonna ask you… Roughly speaking, what was the breakdown? What percentage of schools grew?

0:07:22.0 BS: Yeah. I think we had 47% of schools saw some growth over 2.5%, and we saw again, I think another 30, 34% that actually declined during this period of time, and this was really correlated with how much online, or how online an institution was in 2019. Prior to the pandemic, the institutions that were really heavily online, like you’re primarily online, 95% to 100% of all of your grad students are enrolled online, they actually grew by 11.4%, so huge, huge, huge growth in their graduate enrollments. The institutions that were 20% to 30, or 30 to 40% online before the pandemic, they grew by 2% to 3%, but the institutions that had less than 5% of their graduate students online before the pandemic, they still grew on average, but only by 0.4-0.5%, so much, much slower than the other folks in the market.

0:08:34.4 BS: And there are lot of ways to think about that, it does seem though that you could make the conclusion that students are saying, “I wanna go online, and I wanna go online to somewhere that has intentionally put their programs online, and that is, wanna go to a built-for online program rather than just go to a school, and oh, because it’s the pandemic, I want to attend online.”

0:08:56.9 WL: So that big a difference between people who are already online and people who weren’t already online, to me was a really surprising result, not that there was a difference, but the extent of the difference and the steadiness of that pattern, that as you got more and more online your growth got better and better. That really stands out to me. I’d be curious to hear what are your other favorite one or two key surprises, the things that just jumped out at you that you might not have expected in the data?

0:09:28.3 BS: Yeah, the top hits of the 2021 data refresh. There’s a few things there that I think really stood out to me, and going a little bit further into some of this growth of grad enrollment these past few years, we weren’t so sure about that, ’cause we know that there’s a lot of international students who enroll in graduate programs, and we knew that this is gonna really… A pandemic and lock downs, it’s gonna make it very hard for international students to get to the United States to enroll, and we did see a big drop in international enrollments, that international enrollments dropped by 11%, which is a pretty big chunk when you think about… There’s still a big chunk of international students who are in the US who go straight into grad school, it’s a big drop there.

0:10:18.4 BS: What was surprising is we still saw growth in our enrollments because of huge explosive growth in black Hispanic enrollment, as well as Asian enrollment, so minority enrollment domestically in the United States, went up really rapidly, specifically Hispanic enrollment, which went up 10.2% from 2019 to 2020. That’s a huge growth. Black enrollment was at 5.3%, Asian enrollment up 7.6%. And you compare that with enrollment of White students, that was, I think up, still a strong 2.7%, but definitely nowhere near those growth rates that we’ve seen for some of these… For Black, Hispanic and Asian students. So that was a really great thing to see, and that was really what allowed graduate enrollments to boom even with the loss of international students in 2020, and then many of those international students did start coming back in 2021, which has helped continue that boom through there.

0:11:22.2 BS: So that’s one thing, the big increase in diversity in the graduate student population. A big surprise to me. The other thing I would say is some of the shifts in the programs during this time, so we saw a really dramatic increase in a few programs during the pandemic. Computer science being one of them, and this is a really interesting shift because in 2020, growth in computer science slowed from the last few years, it was only 3%, but in 2021, the growth from 2020 to 2021 was 20%, so already a big program, really dramatic growth there, and we also saw a pretty healthy growth in biology and psychology, so I think the way that we have thought about some of this shift during the pandemic is, is it Bitcoin, biology and burnout? Are those the things that folks are looking to do their study in, and education in?

0:12:24.0 BS: I think certainly the Computer Science is seeing some growth because of the growth and an increased interest in jobs that you can do remotely. Computer Science has long been one of those areas, biology and health sciences, something that obviously the pandemic has made folks more interested in and we’re definitely hearing more about psychology and applied Psychology. It’s probably hard to correlate or to imply causation between some of those things, but we’ve definitely seen a lot of growth in those areas that has been much faster during the pandemic than previously. So those are a couple of things that really jump out to me. I know you’ve looked through the data as well, anything that really stood out to you from some of these updates that are… Or standing out to the partners you’re talking with?

0:13:09.8 WL: Well, you mentioned Computer Science, one thing I’m gonna be interested in is I’ve noticed over the last few years that when I talk to schools who are considering, for instance, putting computer science programs online, I think this is true across several STEM fields, but when they think about putting computer science online, and we look at whether or not there’s a lot of competition in the region, we find an enormous percentage of schools have their computer science programs face-to-face and reliant on international enrollments over the years, and a lot of schools have yet to move Computer Science online. But that seems to be happening. So when I think about the disciplines, I wonder how many of the disciplines is the mix gonna change online versus face-to-face, and how permanently is it gonna change because now that may be the best way to get the head count you’re used to getting, in that particular space.

0:14:00.0 WL: I think the disciplinary differences are important for schools to keep in mind, and I always put the caveat in here that when you’re looking at the disciplinary differences, it’s important to really take a hard look at yourself and say whether or not our institution is equipped to move into some of those hot disciplines, and whether we have the pieces in place to have a likelihood of success, because one of the things that I think is gonna happen based on some of these findings of yours is that people will be doing lots of new things with their programs, and you’re not gonna be able to compete effectively, if you don’t build from the face of strength. You’re gonna wanna be able to get into this more dynamic, more competitive market that we’re we getting to see take shape by using your best stuff, and leveraging the programs where you’ve got the strongest faculty, the best equipment, the best software, the best tools, the best networks to external partners. I think that’s gonna be increasingly important.

0:15:06.3 WL: There’s a thing about your point on diversity I wanted to point out, every year we do an adult learner recruitment a survey of perspective students, and last June, we did a survey of perspective students, 2000 of them, and asked them all these questions about what’s important for them when they look at a program… And one of things that stood out to me before I even saw your results was that we had a statistically significant increase in the number of students who said, “The diversity of the program is important to me.” And I think when you put that together with the growth and under-represented minorities moving into graduate programs and the change from historic patterns to a pattern where a higher percentage of people in these groups are going to graduate school, you put that together with the preferences that we saw…

0:15:55.4 WL: I think that’s an interesting finding, that schools… I feel like there are several reasons to believe in the data you’ve got and the data we see in our survey, several reasons to believe that the better your institution’s doing on its diversity initiatives, the better your performance probably was during the most recent disruption, the most during this pandemic. If schools have not taken steps to make progress on diversity, equity and inclusion, and making sure the climate of their program and the features of their program are appealing to a broad range of audiences, they’re gonna be in a much more spot competitively, I think going forward. So that that one really stood out to me.

0:16:38.1 WL: Now I know from your prior work that you’d already pointed out that the shift toward online was happening in the grad space, that we already saw more than 8% per year growth over the last decade in online enrollments, while we saw face-to-face enrollments retreating a bit, and face-to-face is still very important and it will continue to be, but online is taking more and more of that market share, and we saw that explode during the pandemic. I’d be curious to hear your thoughts on some of the interesting things you see happening as far as what types of schools we need to be looking at carefully, who’s doing well and who you think looking at it in the future is likely to be a type of school people need to be really keeping their eye on when they look at their own programs and how to compete.

0:17:27.6 BS: Yeah, I think that’s a great… It’s an interesting thing, and definitely a great point to say online was growing and growing rapidly, really before the pandemic in the grad space. Actually, if you strip out online, graduate enrollments were declining in the face-to-face programs alone by about 2% a year. Of course, one thing that’s challenging with looking at this data is that 2020 of course up ends some of the data we have on online education because so many students went online for emergency reasons, so the high level data shows while there was a 63% increase in online enrollment, 637,000 additional students in online education in 2020, and most of that is going to be your… It’s students who would have been in-person, who enrolled in an in-person program, they intend to go back to an in-person program, just being shifted online and being counted as online in 2020. So do we expect this 63% increase that we saw in 2020 to just persist? Now we’re gonna see this, a bounce back as classes and programs start going back in person probably already have gone back in person at this point.

0:18:47.0 BS: That said though, there are some institutions and some programs where this sort of shift online is probably going to have pretty big impacts moving forward. Starting with some of those really large online giants that we know about, many of them saw a pretty decent growth during the pandemic that was outsized compared to what they had seen before, particularly Liberty University and Western Governors University saw really dramatic growth in their online programs. And that really can’t be explained by shifting in-person folks to online.

0:19:26.1 WL: Yeah.

0:19:29.3 BS: And so, that’s an area too, and when you think about some of the institutions that shifted the most students online, if we’re looking at just those numbers, it was Columbia, it was Harvard, USC, Georgetown. Harvard shifted 16,000 students from in person to online programs, and I’m really interested in how their programs are moving forward because they’ve actually been pushing in online space, as well as a lot of other of these AAU schools, schools that you don’t really think of as these big online giants. They’re not the Southern New Hampshire or University of Phoenix, those institutions, they’re known for their in-person programs.

0:20:10.4 BS: But your Harvard or your University of Illinois or John Hopkins universities increasingly have been pushing into online education even before the pandemic, and I think that this could be a spring board, something that is helping reduce some of those barriers to advancing online education at those institutions, also making students who are like, Yeah, I want to go and get this elite college experience, much more willing to say, And I might do it online. Yeah, that’s gonna be more convenient and easier for me. I just saw the other day there was this… And I think you’ll find this interesting. Well, but there was a report that Harvard Business School is now making just as much money on their online offerings as their in-person executive education offerings, which is a dramatic turnaround, I think from where they were just a few years ago, where online was sort of this small thing that they did, so.

0:21:08.1 WL: Yeah, just eight or nine years ago when I was very aware of them, because I was located down the street from them, their dean had quoted… He was quoted as saying that we would have online learning over my dead body, and then within a year or two, he was already helping push some really important innovations that have evolved into being a really big part of their business, and I think that’s the pandemic, I wonder how many schools have learned some things about themselves during the pandemic that is gonna mainly have a much more diverse market for prospective students to choose from, and a much wider range of institution types to choose from when they go and look for programs? And one of the things we don’t really know yet is how many people would really like to have a wide array of choices and online programs, but look further a field because they don’t see programs they like or that feel like the right fit yet in that space. I think the more we see schools popping up that feel like good fits to people, the more we’re gonna see some acceleration toward the convenience, the flexibility, and the ability to take work travel, new job and new location, and all the other things that go with being in an online program versus an on-ground face-to-face program.

0:22:27.1 WL: I also just think, one of the things that’s gonna continue to be a challenge for us is we charge so much for what we offer people that in a sense, have to have the flexibility in many cases, the way they’re gonna pursue this dream of getting graduate education is they have to keep the lucrative job they’ve got in order to be able to keep their finances from getting completely out of whack by stopping and taking a break. So like, full-time programs, not just part-time on ground, but full-time on ground programs, particularly for domestic students are gonna continue to feel pressure because in part because of what we charge people, but one of that… That was another one of the findings that is in your study that I found fascinating was that you could distinguish between the schools that were likely to have temporary growth versus the schools that were likely to be growing their core online offerings in a way that might not be temporary.

0:23:27.2 BS: Yeah, yeah, so we were able to look at some of that 2020 growth and seeing, Okay, where is a lot of this online shift mostly temporary, and being able to see, okay, most of the institutions that we saw are really doing a lot of that shift online, was that temporary element, but some others really stand out there. John Hopkins, University of Illinois and Florida State were ones where actually, it looks like they grew more online organically. The one that I think is very interesting out of that is, this is the institution we think grew the most organically online during the pandemic, and it’s one I had never heard of before, until looking at this data, and it’s called The University of the People. And so I looked into them a little bit and really sort of an interesting different approach to providing graduate education. They added 9000 additional graduate students from 2019 to 2020, and they advertise themselves as a very low cost, low support university, no tuition cost there, you only pay for basically, I think a course, a test fee, essentially. It’s all volunteer faculty, the assignments are all peer graded, and so it’s really not very much of a faculty member grading the assignments, it’s all peer graded, it’s mostly these assignments that are based on free or external resources, it’s sort of this extreme version of the…

0:25:07.2 BS: Where institutions have been going in the past, which is these large classes, these low support, but very, very affordable, very, very cheap offerings. You know, I think… I’m not really sure what to think about University of the People at the moment, it seems like it’s very exciting and for many students and very interesting for definitely a subset of the population, but also, is this the way that all institutions should go? I don’t know if I would say that. I think this is definitely one of the extreme versions, but I’m curious what you think about that sort of…

0:25:49.1 WL: Yeah, I’m fascinated by it because I think it meets a lot of the criteria for what Clare and Christensen then called the disruptive technology, which is something that starts off as inferior and doesn’t meet most people’s needs, but there’s a particular group of people who might not buy the normal product, the usual product, but find this appealing for some reason, one reason being that low, low price. And one of the things about a disruptive technology, if an organization like University for the People, or University of the People, I’ve gotta get my prepositions right. [laughter] If the University of The People build a nice audience and has some exciting growth for new types of folks who weren’t gonna otherwise be able to pursue graduate education, they have the opportunity to potentially grow up toward the other programs that are out there and expand their offerings and expand their features and grow into being something that’s more of a direct threat. And the big question for disruptive technologies, when would they get to the point where a lot of people in the main market would actually start to see the thing they’re offering as being a pretty appealing offering that satisfies their baseline needs?

0:26:57.2 WL: If you get to that point with some of these newer approaches, then you really get into something that could up in the market. And one of the things that I took away as a key lesson when I was studying the stuff Christensen was talking about, was that if a school isn’t at least experimenting in some of those areas and trying out some unusual things of their own, if you’re not in very early in experimenting and trying these new ideas, you’re not likely to get into the space, the space could potentially overtake an important part of your market. And he uses industrial examples, but I think higher education, we see a lot of different things going on, not just with this one example, but things like LinkedIn Learning and Grow with Google and other offerings that are out there that have the potential to grow into being things that satisfy more and more people’s needs over time. And I’m hoping to see more universities trying some innovative things in that space. That actually brings me to my last key point, which was that I was a real MOOCS skeptic. I did not love the idea of MOOCS. I was not a fan, I thought that might be a fad. And a lot of people seem to think it was a fad, but it was a fad for a while that seems to be turning into something real now, and some of what you studied and looked at in this research points to some interesting observations about the MOOCS of today and how they might be different from the MOOCS we saw in the past.

0:28:27.9 BS: Yeah, and MOOCS are interesting story. I think there is sort of an evolution of the MOOC over the past. Look, feel like they were around for a while, but it’s really only been like a decade where they really started off in 2012 and 2013 as being like, Oh, this is the great democratizer and we’re gonna have everyone going to school for 20 bucks and get all of these classes. And we didn’t really see that happen, it turns out that very tough to… That’s not really the way that you can create education and high-quality learning for a lot of students just by throwing something on a video and having folks follow along, but I think that institutions have experimented and move with that, and we’re now seeing…

0:29:18.9 BS: I think you could call them MOOC like master’s degrees, MOOC like pathways into programs where using a lot of the elements of a MOOC that seem to work pretty well. You have the asynchronous programs that are pretty large, but have a lot of teaching assistants who are helping provide support, but only one faculty member providing a really large class and using this to stack into program. So you’ve got University of Illinois, iMBA, you can start into these programs without actually applying. You can do these programs on Coursera or edX to you, get a feel if you like the program, and then later decide if you want to get into them and also at a pretty affordable price point. Not necessarily that price point, that was originally the idea of it being completely open, completely free, but still closer to that then you would say a traditional program, and so we are seeing more of this institutions moving in this direction, and I think this is an area where some rapid growth among…

0:30:33.2 BS: We’ve seen rapid growth among institutions in their enrollments that have tried this out. Georgia Tech, MIT University of Illinois, iMBA. That’s a great example there. Playing into this area and finding that they can… This is building a new market for themselves rather than cannibalizing their traditional space. That might not necessarily be true for other institutions, you might end up having to pick one or the other, but it’s definitely some interesting… The maturation of the MOOC, you might say, is what we’re seeing today.

0:31:09.4 WL: Yeah, I need to see some quality institutions, as you say, like University of Illinois, MIT, Georgia Tech, trying some creative things that get people into a quality program at a much lower price point than they otherwise might, and being able to try something out before they make the firm commitment to spending a large quantity of money. One of the things about Illinois that’s interesting to me is it’s one of the first fully online programs that’s drawing a substantial percentage of its students more than 20%, I’ve read, from outside the US. So you’ve got a lot of online programs that theoretically could draw international students, but never do because we’re selling something at a US price point that might not make sense to a lot of people unless they’re gonna be able to come to the US and experience study abroad experience, a richer, fully on ground study abroad experience.

0:32:01.6 WL: Illinois is one of the first schools that’s made some inroads into selling online program seats to folks from outside the US, which I think is something important to watch, looking forward. So I know looking at the clock, we’re up against it, we’ve gone past our time already, and I wanted to just hit a few key takeaways for folks. Based on everything that you’ve said so far, feel free to chime in and amplify anything that I’m saying. First take away from me was that we see growth, but we don’t see uniform growth that everyone’s benefiting from equally, we see a much more complex picture in terms of the growth that people have enjoyed over the last couple of years based on their region, their disciplines, their mix of diversity and the degree to which they were already online.

0:32:48.8 WL: I think in the online space, to me, one of the things that came out of what you’ve talked about today is just that there’s so much happening in the online space, and we see some early tremors that a lot more interesting things are gonna happen in that space. Have you got any last advice for anybody as to what they should be watching or thinking about as they look at the evolution of the online space over the coming years?

0:33:14.3 BS: Well, I think it makes a lot of sense to be, looking at how programs are changing, look at how your competitors are getting into this space, and I think that when we talk with a lot of our partners, they’re very interested in wanting to launch a new program, launching those like, Oh, should we get into this area or that area? And that’s important. I think equally as much there should be a thought of how can we get the best. You alluded to it earlier, really leading with your best content, your best programs. I think it maybe more of the way to be thinking about it as saying, How can we make sure that the best stuff that we provide to our students, our best programs, let’s try and get them out to students in lots of different ways, thinking about sort of the multimodal-delivery of your best content rather than creating more and more programs that are sort of separate. But that’s sort of one thing we’re seeing, I think it definitely sense to be talking to… Thinking about your faculty, how willing they are to provide this sort of online experience moving forward, ’cause the barriers have changed there, looking at your competitors, how they are changing their stance in the area, and of course the students making sure you’re asking them about their preferences ’cause they’ve changed.

0:34:32.5 WL: And to me, all of that leads to the final point for which is that this is a very turbulent environment, and I think it’s more important than ever that schools be open to innovating and experimenting and trying new things without getting hung up on exactly which things work but trying new things and trying to expand your reach into some new areas with that innovative approach, so that you’ve got more to build on whichever way this market goes, ’cause it’s gonna, I think continue to be more turbulent, harder to interpret, harder to predict space than it’s been in the past, but it doesn’t make it an un-exciting space.

0:35:09.8 BS: Absolutely, well, and as we can keep doing the research, we’re gonna hopefully be able to continue trying to decipher some of this turbulence moving forward as well, so hopefully the next update to the blueprint for growth research that we do in the next year or so, can continue some of what we’ve been able to find today.

0:35:32.2 WL: I’m really looking forward to hearing about that as it unfolds and having the opportunity to share it with partners. Thanks for talking today, Brian.

0:35:40.9 BS: Yeah, thank you, Will. Enjoyable.

0:35:42.1 WL: Take care.

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0:35:50.8 Speaker 1: Thank you for listening. Please join us next week when we take a look at how early alert systems, a staple of student success efforts for at least a decade, impact different types of students in different ways. Until then, thank you for your time.