Yale’s struggles signal broader challenges ahead for colleges — from christenseninstitute.org by Michael B. Horn

Excerpts (emphasis DSC):

For some time, the business model that supports traditional colleges and universities has been breaking. The ability to continue to implement sustaining innovations—more research faculty, more extravagant facilities, more administrative positions—that add cost by using increased revenue from a mixture of tuition, government funding, endowment returns, and donations is in peril for many institutions.

As a result, we’ve written about how there are a number of traditional higher education institutions that will likely merge or even cease to exist in the coming years. Many have suggested that this could not happen—despite the fact that a state like Georgia is already consolidating its public institutions of higher learning; that the situation is not so dire; or that it is something for which there will be a fix at some point.

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The article relates how even five years after the onset of the recession, revenue sources have not bounced back at Yale: “More and more students require financial aid, endowment investment returns are still down, government funding is declining and tuition and fundraising increases are limited by the weak economy.”

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The bigger point for traditional institutions of higher education beyond Yale is that with the repeated annual tuition increases over the past few decades, the middle class is increasingly being priced out of much of higher education.