[The following higher education regional economic report was presented by MCL President and Dean Mitchel Winick at the Monterey County Business Council annual economic forum, Thursday, October 16, 2014]
The classroom-based model of higher education has changed little over the past centuries. Students have made the transition from tablets, to typewriters, and now back to tablets . . . as if that isn’t proof enough how little things change. Lectures, labs, and exams, whether delivered in person or on-line, are still the foundation of higher education. However, what is changing is the financial model of higher education.
Institutions’ costs are rising at the same time that governments have decided that they can no longer afford to subsidize universities at past levels. Meanwhile, demand continues to grow for higher education to provide the skills and credentials for a modern workforce. As the cost of higher education shifts from government subsidy to private financing, the level of American student loan debt has risen to $1.2 trillion with estimates that as many as 7 million students and families are currently in default, an alarming number that continues to rise. Across California, public and private colleges are struggling to balance their books. A recent article in the Economist predicted a global flood of university bankruptcies over the next two decades. Susan Fitzgerald of Moody’s credit-rating agency recently wrote about a “death spiral” of university and college closures.
Debt, defaults, and closures . . .
So, how are you enjoying your breakfast now?
What is the answer? And more importantly for us, how are we dealing with these issues here in our local higher education community?
At the risk of oversimplification, the answer is defined in two categories, leadership and collaboration. As president and dean of Monterey College of Law, I am in my 10th year, which makes me the senior statesman among my colleagues . . . and provides me with a unique perspective. What I have observed first-hand over the past decade is that we are blessed in this community with a uniquely qualified group of higher educational leaders, who continue to find opportunities within the challenges, and who firmly believe that through institutional collaboration, our whole is far greater than the sum of our parts. I can tell you from my professional experience in other academic communities, that competition, not collaboration is the norm. What we have here on the Central Coast is something special.
There are numerous examples of ongoing unique and exciting collaborative programs among our local higher education institutions. Furthermore, the future potential of our industry sector is apparent when you look at who makes up our unique higher education community and what we already contribute to the local economy. Our 2014 economic report indicates that higher education adds more than $1.6 Billion to the local economy. When compared to the $4.1 Billion agriculture industry and the $1.8 Billion hospitality industry . . . higher education is clearly the third leg of our economic foundation here on the Central Coast.
Total research and grant dollars brought in by higher education exceed $399 million in 2014, approximately the same level as in 2011. The student population increased to 86,736, an increase of 10% from 2011.Using a conservative impact analysis formula, higher education supported 68,000 jobs and more than $3 Billion in expenditures to the local economy.
As a result, higher education continues to provide a stabilizing influence on the local economy and continues to represent the most versatile growth sector within the Central Coast region.