New Model For Higher Education: Aviation Programs Suffer

The higher education business model is evolving. Student debt is rising, state funding is drying up and federal dollars are surrounded by uncertainties. The notion that institutions can keep doing business the same way they have been for centuries must change. Simply sticking students with ever increasing tuition bills to subsidize the increasing costs of education will soon have a drastic impact on higher education enrollment numbers. Student debt is now up around $1 trillion and more and more grads are having a hard time making their loan payments when they graduate. Even with the slow recovery of the economy, still 1 of every 2 college graduates is unemployed or underemployed.  

The shift has started… 

In the mind of students, the allure of going to a top 25 academic institution is losing some of its shine. There has been a shift towards schools and programs that are more affordable but still offer relatively high academic ranking. As we have seen with the success of institutions like Phoenix, online education is becoming an acceptable and less expensive alternative to the classroom experience. If students and parents do not see a match in the price tag to the value of education; they will simply go elsewhere to get a degree. 

Administration scramble… 

Gone are the days of sticking students with the bill for the high cost of education.  University budgets have gotten fat on this model and created operational inefficiencies. The CEO of one of the leading higher education consulting firms let me in on a little secret. “When I walk into the administration building of a college or university to meet with the President for the first time, within about 5 minutes I can figure out how high their costs are by the number of administrative assistants that come up to me and ask if I need anything before the meeting.” If 3,4 or even 5 admins ask if they can get him a coffee it becomes clear that the school has an administrative redundancy problem. 

Schools are beginning to realize that they need to find their cost centers and begin cutting back.  This could include cutting staff, minimizing programs and flatlining internal costs to meet tighter budgets. In an article by the New York Times, E. Gordon Gee, The President of Ohio State University, discussed his target of cutting $1 billion of inefficiencies out of a $5 billion budget.  (Read the full article here).  

Where do aviation programs sit in the midst of all of this?

Moody’s Investor Services said that it had a favorable outlook on large institutions that had multiple revenue engines and a negative outlook on colleges and universities heavily dependent on tuition dollars. The question then becomes, is your aviation program a revenue generator or a cost center that relies heavily on tuition dollars? 

If your answer was cost center then now is the time to start thinking about some ways to convert to a revenue generator.

  1. Make sure your program is operating efficiently.  In a time like this you certainly do not want to be overstaffed. If you are, make it known to the school that you are working to improve staffing inefficiencies. Hand in hand with staffing efficiencies is utilization numbers. Make sure the aircraft you have are being utilized to their full potential. The more you use your planes the better your programs economics will become.

  2. Keep your student enrollment numbers steady or increasing.  Certainly if they are decreasing you need to act. Take initiative and market your program to high school students interested in aviation.  Show the school that you are taking action to improve the numbers. (Click here for marketing strategies for your flight training programs).

  3. Help the school out with costs. If you currently own your aircraft, consider a sale-leaseback. A sale-leaseback can free up large amounts of capital that can then be used for other purposes like student loans or scholarships.

  4. Get creative! Think outside the box on ways that you can bring in more revenue.  Prove to the school that your aviation program, whether new or seasoned, is an asset to the university. Keep in mind, according to Boeing the world will need to add 466,000 pilots in the next 20 years. That is equal to 23,300 pilots per year needed to support global fleet requirements, pilot retirements and attrition.  

  5. Curriculum – look at your ‘sacred cows’ and evaluate if there are better ways of executing the curriculum. For example, look at ‘self-paced’ distance learning applications in which universities offer online ground school courses for part-time students. 

  6. Aviation is a skillset not a vocation.  Investing thousands of dollars into an aviation degree is not just a means to job placement at an airline. The process of flight training teaches students critical skills like problem solving, planning, critical thinking, resource management, judgment based on data and intuition. These are hands on skills that will prepare students to run some of the largest corporations in the world or to start the next "disruptive" company. Keep that in mind when talking to administration, students and parents about the value of an aviation program.

Final Note...

Adapt or become irrelevant.  In today’s educational environment it is now vital that your program and university adapt to the inevitable changes in education. Not acting is not an option.