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Northeastern University, a business model for change

Summary:
It is a common trope that university faculty don’t understand or live in “the real world.” This always tickled me. The unemployment rate for college grads has always been lower than for those without a degree, I guess university faculty do know a thing or two about the real world, since they can train students who are prepared for it. Yes, I know about Bill Gates, but you have to get into Harvard before you can drop out from it.Yesterday, I wrote about the imperative for colleges to evolve. One evolutionary success story is Northeastern University, in Boston. Once a commuter school that admitted most applicants, it eventually found itself losing market share. But then:“In the space of one generation, Northeastern University has undergone a complete

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It is a common trope that university faculty don’t understand or live in “the real world.” This always tickled me. The unemployment rate for college grads has always been lower than for those without a degree, I guess university faculty do know a thing or two about the real world, since they can train students who are prepared for it. Yes, I know about Bill Gates, but you have to get into Harvard before you can drop out from it.

Yesterday, I wrote about the imperative for colleges to evolve. One evolutionary success story is Northeastern University, in Boston. Once a commuter school that admitted most applicants, it eventually found itself losing market share. But then:

“In the space of one generation, Northeastern University has undergone a complete metamorphosis. The former commuter school that used to admit nearly everyone — 88 percent of applicants in 1990 — is now as hard to get into as Amherst or Bowdoin College. Demographic declines in college-age students and crushing financial pressures have forced dozens of higher education institutions to close in recent years, and many more are on the brink, but Northeastern has been gobbling up struggling schools and expanding its holdings, across the country and around the world. The total cost of attending, before financial aid, has ballooned from less than $16,000 in 1990 to more than $90,000 this year, but that hasn’t slowed demand for spots: the applicant pool has grown tenfold over that period.”

Thirty-three years ago, the university faced a budget gap of $17 million. To reach a more sustainable model, the administration decided to move from the local commuter school business model to an international model, competing with top-tier schools with a career-focused curriculum and single-digit acceptance rates. Along the way, a former president made a major investment in co-op programs, to give students “real-world” experiences and position Northeastern graduates as attractive employees. Did it work?

“Ten years after graduating, Northeastern alums today earn an average of $92,538 a year, compared to the median earnings of four-year college graduates of $53,617, according to the US government’s college scorecard.”

It may be fairly objected that the purpose of a college education isn’t simply job training. And the St. John’s College great books curriculum has remained viable. But a shuttered university trains nobody, so although there are many paths to success, they must be financially sustainable. In the words of Richard D’Amore, a Northeastern alum and current chair of Northeastern’s board, “Universities are going to evolve and meet the needs of their customers or fail.”

Northeastern University reinvented itself

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