Community Business Resouce Council

Education

 
     
 
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Education

Education Industry Critical Business Challenges

If you are experiencing any of these critical business challenges, then CBRC would like to help. Our Business Strategist has helped companies in the Education Industry overcome their frustrations by conducting a strategic growth analysis - then involving them with designing a business solution to generate revenue and solve their critical business challenges.

 

Here are a few of those business challenges that we have solutions:

 

Private Schools K-12

  • High Costs Restrict Enrollment - Although the cost to attend many private religious schools is relatively modest -- $5,000 for Catholic elementary schools on average -- the cost to attend many independent private schools is beyond the means of most Americans. The average annual cost to attend a private boarding school is about $35,000; for a non-boarding private school, about $18,000.
  • Shifting Demographics - Between 2010 and 2020, the total number of US children age 18 and under is forecast to increase by about 9 percent, about the same as the projected increase in the US population overall. Over the same period, the number of Hispanic school-age children is forecast to increase by about 30 percent.
  • Competition from Public Magnet, Charter Schools - Magnet and charter schools are efforts by the public school system to compete with traditional local public schools, but within the public system. Magnet schools offer advanced or specialized classes that draw students from a wide area. Publicly funded charter schools, operated by community-based groups, private business, or groups of educators and parents, are free from many of the regulations that burden ordinary public schools. More than 40 states have passed legislation authorizing charter schools, and about 4,700 charter schools operate nationwide. To the extent that magnet and charter schools succeed in correcting some of the deficiencies of the public school system, they directly compete with private schools.
  • Social Media Litigation - Private school students have fewer First Amendment rights than public school students, according to recent court decisions. Private schools' efforts to restrict student use of social media have been upheld, but a perception that a school wants to prevent students from expressing their opinions can negatively impact enrollment and fundraising, as well as accreditation.
  • Information Disclosure - Private schools face growing consumer pressure to release more information: as private school becomes more accessible, the public wants some way to measure their performance. Education experts say that if tax-supported private school tuition vouchers and other ways of funding private schools with government money become popular, private schools that receive such money will be obliged to report test scores, teacher qualifications, and graduation rates, as public schools do.

Public Schools K-12

  • Dependence on State Funding - With 45 percent of their budget dependent on state funding, school districts are vulnerable to state spending cuts in times of economic difficulty. With 60 percent of school spending going to salaries, spending cuts translate directly into teacher job cuts, typically in programs like music, art, and sports. More school districts charge students for sports and extracurricular activities.
  • Retaining Qualified Teachers - A large number of senior teachers are retiring and leaving many school systems facing a shortage of qualified teachers. Although overall more teachers have advanced degrees and certifications beyond bachelor's degrees, they have fewer years of teaching experience, according to the National Commission on Teaching and America’s Future. The national turnover rate for teachers is around 8 percent.
  • Reduced Public Confidence - While public support for local public schools remains high, many parents, colleges, and employers believe that the public school systems, especially in urban areas, do a poor job of providing a good education for all students. Colleges and employers now routinely provide remedial courses for high school graduates who cannot read, write, or calculate at acceptable levels. Some states have imposed "top-down" requirements on school systems, such as requiring that students pass a state-designed test before being allowed to receive a high school diploma. Without an increase in public confidence, the existing public school model is likely to be fragmented as a variety of different approaches are tried locally.
  • Competition from Charter, Private Schools - In response to poor education provided by local public school systems, reformers have suggested that parents be allowed to send their children to other public schools, charter schools, or private schools, along with the public funding that would normally be available to the student. Critics believe that it could result in a massive withdrawal of funds from some public school systems.
  • Legislative Requirements - Some school systems have not been meeting the requirements of the 2001 federal No Child Left Behind (NCLB) Act that requires annual tests, more rigid hiring requirements, and the need to identify struggling subgroups of students. The act has been controversial, and in 2012 the Obama administration waived some NCLB requirements for 10 states that agreed to sweeping education reforms. Other proposed legislation would remove some of the federal mandates in NCLB and give more power to the states. Some state education officials say that the NCLB standardized tests have resulted in schools being labeled "low performing." Educators complain the mandatory testing has led teachers to "teach to" the test rather than provide a well-rounded course of study.
  • Liability for Violence - Violence is a real concern for all schools: many lawsuits were filed against schools in recent years over violent incidents. Eighty-five percent of public schools reported at least one violent crime during the 2008 school year, for instance. While many states have laws giving schools total immunity from liability for violent acts, school officials may not enjoy the same protection. Many states have laws requiring schools to develop anti-violence programs. Some security measures to reduce liability are digital camera surveillance and security guards.
  • Problems with Disability Testing - Advances in testing methods have made identifying children with various types of learning disabilities easier for school districts, but proposed remedies are sometimes expensive or considered an unfair advantage by parents whose children don't receive special treatment. For example, students diagnosed with some learning disabilities may be given more time to complete tests. Now, with more states instituting elementary and high school graduation exams or grade-passing exams, the debate has become broader and more urgent, with some education experts predicting a flood of new lawsuits.
  • Growth in Special Education Spending - Special education is often perceived as a budget-consuming burden for schools. Even though students with special needs make up 13 percent of the student population, they can too easily be ignored by school districts focused on producing students with high scholastic achievement and high test scores.

Colleges & Universities

  • Dependence On Tuition - Tuition prices at both public and private institutions have been increasing faster than education and general spending per student. This suggests that both public and private institutions are becoming more dependent on tuition as a source of general revenue. Schools are counting on tuition money to cover not just education and related expenses, but as a general subsidy for all functions, including research and services, according to the Delta Project's Trends in College Spending report.
  • Endowment Losses Impact Budgets - Many university endowments that plummeted in value as a result of the late 2000s recession have begun to recover. Income from endowments dropped nearly 20 percent in fiscal 2009; however, endowments averaged a 12 percent return in fiscal 2010, according to the National Association of College & University Business Officers. Endowment withdrawals can account for a substantial portion, from 15 to 20 percent, of some universities' total annual revenues, according to the Delta Project. Consequently, endowment declines may result in hiring and wage freezes and other budget cuts.
  • Public Universities Depend on Government Budgets - Government financial support for public universities depends on government revenues, which can change from year to year. Public schools receive nearly 30 percent of revenue from state and local appropriations. The late 2000s recession hit government budgets hard and resulted in funding cuts to higher education. This, in turn, could mean tuition hikes, as well as the reduction of course offerings and even the elimination of majors at some state colleges.
  • Liability for Alcohol Abuse - Excessive and underage drinking affects virtually every college campus in the US. Each year, alcohol is responsible for 1,800 college student deaths; 600,000 injuries; and 100,000 sexual assaults, according to the National Institute on Alcohol Abuse and Alcoholism. About 25 percent of college students report academic consequences of their drinking including missing class, falling behind, doing poorly on exams or papers, and receiving lower grades overall.
  • Internet Competition - Once thought of as merely "diploma mills," online universities are gaining in popularity and respect. The number of students taking online courses continues to grow at a rate far greater than overall higher education enrollments. For fall 2010, more than 6 million students were enrolled in at least one online class, according to Sloan Consortium's Online Education in the United States study. Bad economic times also drive online enrollment upward as the unemployed go back to school and the employed improve their chances for advancement through education.
  • Conflicts in Research Contracts - The intertwining of industry and universities in high-tech fields has created ethical problems for some schools. Companies that provide research funds to universities sometimes expect results to be kept secret, conflicting with basic university principles to educate and share information. This is especially true for the biotechnology industry, which originated in university research laboratories.
  • Competition from Canada - US students seeking a higher education without the sticker shock are increasingly heading north to Canada, where a college education can cost nearly half of what it does in the US. Additionally, Canada's college admissions process, which often doesn't include interviews and doesn't require admissions essays, is far simpler and less competitive than the US admissions process. The number of Americans attending Canadian universities has grown to 10,000 students, according to the Canadian Embassy.

Education & Training Services

  • Compliance with Government Policies - Educational and training services, particularly certificate-granting programs, are heavily regulated by the US government. Educational policies addressing financial aid programs, classroom funding, accreditation status, and standardized testing can change considerably based on the political climate and philosophy of the legislative and executive branches. Establishing a track record of success can be difficult for career and technical programs in light of this ever-changing regulatory climate.
  • Dependence on Personal Income - Leisure studies is a multi-billion dollar industry that relies on individual desire for self-expression and self-fulfillment. Non-certificate classes such as yoga, calligraphy, and fly fishing depend highly on consumer spending patterns. Economic recessions and periods of high unemployment impact hobby, arts, and sports instruction.
  • Vulnerability to Federal Funding Cutbacks - While government funding represents a small portion of overall industry revenues, a number of CTE institutions rely heavily on federal loan programs to support enrollment. Cutbacks or changes to federal programs could have a major effect on the profitability of educational and training institutions. For example, 70 percent of ITT Technical Institute’s revenues come from federal student financial aid programs.
  • Student Loan Defaults - Career and technical institutions must deal with a certain percentage of students who default on loans. Several schools consistently report bad debt expense annually, prompting SEC investigations as to the nature and legitimacy of these claims. These companies have increased their allowance for doubtful accounts to better manage the ongoing problem of bad debt. Schools that exceed a 25 percent default rate for three consecutive years risk losing eligibility to participate in various federal grant programs.
  • Negative Publicity - Educational and training services must overcome the "diploma mills" perception. Unscrupulous, fly-by-night companies offering instant certifications and degrees have harmed the reputation of legitimate institutions. Even some larger, established programs have run afoul of the law for failure to hire qualified staff or provide graduates with successful career opportunities. Schools can get away with unethical business practices with limited consequences due to decentralized regulation.

 

 

 

 

 
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