Higher Education is Facing an Existential Crisis of Its Own Making 

Post-secondary educational institutions (PSEIs) are facing an existential crisis. Caps on study permits for international students, changes in the perceived value of higher education, and a growing transfer market are seriously threatening revenue generation. To be clear, PSE will not be the only casualty if this continues. There are implications for the wider economy and our standard of living if our colleges and universities are forced to close.

This was the topic du jour at a conference on higher education I recently attended in New Orleans. However, this is not solely an American problem. The same trends can be observed in Canada, too.

The State of Higher Education Institutions in Canada  

PSE business models have not evolved to meet today’s market realities. There has been an over-reliance on easy money coupled with siloed thinking about recruitment. PSEIs must take a wider view and adopt new practices or face severe cuts to revenue.   

The task at hand is to focus on a large but overlooked cohort of mature students who have the desire to return to school but give up on enrolling because the system prevents the transfer of previous learning credits and fails to recognize work experience that is a legitimate replacement for new credits.

This has been a legacy issue within higher education. However, recent advances in technology and artificial intelligence (AI), as well as new thinking about credits for prior learning (CPL), have made realizing this new revenue stream possible.  

That’s good news because we also need these institutions to train our citizens for the jobs of tomorrow. Solving for CPL not only means PSEs can survive, but it also means addressing systemic productivity challenges by creating a pipeline of talent to fill jobs where skills shortages persist and job displacement looms.  

Changing Perceptions and Shrinking Pools for Recruitment

Times have changed for PSEIs across North America, and we should thank our American friends for smelling the change in the air because their research sheds light on what’s happening in Canada.   

There is a growing sentiment that higher education no longer guarantees better employment outcomes. According to a recent Pew Research Center survey, 49% of Americans believe a college degree is less important for securing a well-paying job now than it was 20 years ago. There should be a real cause for concern when half the population believes the value of your product is in decline.  

Is it safe to assume that Canadians share this view? It would be dangerous not to, especially given our country’s well-documented falling fertility rate. A shrinking market coupled with reputational issues about perceived value does not make a strong foundation to sustain a business, let alone grow it.  

Our institutions have been well aware of this challenge, which is why study permits for foreign students were such a boon to the sector. A seemingly inexhaustible pool of new, high-revenue recruits created a false hope that the good times would never end. But that’s what’s happening now. The federal government is imposing study permit caps, and higher education is very worried about this. They came to rely on this revenue. How will they replace it?  

Today, there is also much greater student mobility. Research from The Centre for Higher Education Policy and Practice (CHEPP) found that nearly two out of five students transfer institutions within six years of entering college, and 45% of those students transfer twice. We should cherish freedom of movement, but it comes at a cost to the individual. The same research tells us that transfer students lose roughly 43% of previously earned credits, equivalent to about one semester’s worth of education. Furthermore, transferring to a public four-year institution can cost that student an estimated $13,000 in additional expenses, which balloons to an estimated $26,000 when transferring to a private four-year school. 

The Under-Employed Offer a Tremendous Opportunity to Train Workers for the Jobs of Tomorrow

There are almost four million Canadians with some learning credits, and just over 40 million Americans who have “some college, not completed”. They then transition into the job market, often performing perfectly well and acquiring new skills like data entry, bookkeeping, etc—sufficient for today but could be replaced by automation tomorrow. 

In our advanced economy, these workers are considered under-employed. They are competent, but career advancement is limited. But what could they achieve if we train them for the jobs where shortages exist? Doesn’t it make sense to find ways to fast-track them, given their history at school and work?  

We can and should recognize experience gained on the job as sufficient qualification for new learning credits. When we do that and find ways to make previous credits more transfer-friendly, we incentivize millions of mature students to return to higher education. According to CHEPP, learners who earn CPL take an average of 17.6 more credits and are more likely to graduate. These are key benefits for institutions that also have persistent retention challenges. 

Could AI Solve Higher Education’s Enrollment Challenges?

In defence of higher educational institutions, cracking this nut has not been easy.  

The current paper-based approach to match prior credits with current ones across different schools, while simultaneously trying to award new credits for work experience, must feel like trying to solve a word search inside a jigsaw puzzle encased in a coding exercise. Managing it is a frustratingly tedious exercise.   

This is exactly the challenge we are solving at KnowMeQ. Our AI CPL platform, Archie, severely truncates the path to accreditation. Enrollment officers who once took months to complete just one application can now process multiple applications in minutes.   

Here’s how it works.  

Once uploaded, our AI scans applicant resumes, parsing skills and previous credits to calculate if new credits can be awarded based on standardized PSE taxonomies. This makes up the applicant’s CPL submission request, which is sent to partner PSEIs for review. Confidence scores are also included to help administrators quickly determine which applications to approve or reject.  

Suddenly, the mature student has grown his or her basket of CPL and is provided with a clear path to new accreditation that supports alternative career opportunities.  

The Future of Canadian Education

There should be corporate interest in realizing this outcome. Canada is facing a productivity crisis. According to the Bank of Canada, Canadian productivity has fallen from 88% in 1984 to just 71% of that of the US in 2022. We are also behind almost all our G7 peers in this important economic metric.  

This decline in productivity is driven in part by massive skills shortages and can worsen due to potential job displacement that comes with technological advances in industry.  

One way to improve our productivity standing is to upskill our citizens. The vast number of mature students offers a tantalizing way to do this, provided we can adapt the system to cater to their needs.  

If done correctly, we will solve a number of connected issues: higher education will thrive under a new business model, Canada will make much-needed progress against productivity objectives, people who upskill will benefit from career advancement and receive higher wages, and we will retain a high standard of living that comes from a fully functioning advanced economy.