Dr. Joshua Travis Brown, Assistant Professor at Johns Hopkins School of Education: How Higher Education Went From Mission-Driven to Margin-Obsessed

Van
Hello, I’m Van Ton-Quinlivan, CEO of Futuro Health, welcoming you to WorkforceRx, an ongoing conversation with leaders and innovators offering insights into creating a future-ready workforce.

Market competition has fundamentally changed our system of higher education and distorted the values of mission-driven schools. That’s the stark reality depicted by Dr. Joshua Travis Brown in his book, Capitalizing on College: How Higher Education Went From Mission-Driven to Margin-Obsessed, which we will be exploring on today’s episode.

In the book, Josh, who is assistant professor at the Johns Hopkins School of Education, draws on 150 in- person interviews with leaders at eight religious institutions to detail the strategies they’ve used to generate revenues and boost enrollment, and analyzes what those choices mean for current and future students and the system at large. Thanks very much for joining us today, Josh.

Dr. Joshua Travis Brown
Oh, it’s my pleasure to be here with you, Van.

Van
So, I mentioned your book argues that financial pressures have pushed many colleges to chase revenues in ways that are undercutting the education mission they were established to serve. What are the key drivers of this frantic search for revenues?

Josh
Well, Van, it’s actually the system of higher education that we’ve built in the United States. It is built to distribute federal resources based on two mechanisms. The first is what we sort of call per student funding which is where the federal government gives the money to the student and then to the institution. It follows this indirect path, which we in the industry call indirect funding. And if you can remember this equation, more students equal more money. That’s sort of the first pillar, if you will.

The second pillar is student loans and this is sort of the innovation and the principle that occurred back in the ’60s and ’70s where it enabled students to pay for today’s education with tomorrow’s money. Fundamentally, what that did was is it shifted the liability from organizations to individuals and it also incentivized institutions to see students as dollars and to pursue growth, again, with that fundamental equation in mind of more students equals more money.

Van
And what is happening in the context that is making these points come front and center?

Josh
Rising costs, obviously, and the lack of financial resources in general. The residential core, the traditional residential model is not a profit-making model. In fact, most, if not all institutions that run the residential model lose money, and so it has to be subsidized. And that’s one of the fundamental principles of leading and running a college or a university is that the leaders, the board, the president, the provost, they’re tasked with not just financial sustainability, but finding some type of subsidy, whether that’s from the endowment or whether that’s from some sort of revenue or some sort of profit margin or even patents. Colleges and universities have a variety of margins and revenue sources coming in, and this is all to keep it afloat because again, that residential model is not a profitable one.

Van
I think data from the Lumina Foundation shows that about 16% of students attend residential colleges. It’s so interesting to learn that they are not self-sustainable if that’s the only thing that they do and are struggling.

Josh
Yeah, it is. They’re just tasked with this sort of behemoth weight on their shoulders of trying to figure out how in the world to propel the organization forward into the future to sustain those missions that they’ve had for some 200 to 300 years.

Van
So Josh, I was wondering, in your book you actually decided to focus the interviews on religious schools. Why that population of schools?

Josh
So there were a few reasons. The first is that the vast majority of the paradigms, the motifs, the models that we think about, the vast majority of the bandwidth and attention in the United States on colleges and universities is on the elites. When you open the New York Times, when you open the LA Times, they’re talking about elite institutions. Very rarely is it the vocational driven national institution. It’s not the adult-centered Western Governor’s University. It’s these institutions that command the vast majority of the wealth, the vast majority of the prestige. And the way we think higher education works is based on these models. These institutions only accept 5% of their applicants, which means the rest of the 95% have to have some type of other model available to them. They cannot run on an elite model, and that’s frankly not reality.

So as a nation, as a society, the way that we think higher education runs, at least from the major headlines, is incorrect. It’s not reality. You don’t study families in the United States by looking at the Kardashians. You go out and you live among the folks. And so that’s what I did. I went out, I lived among various institutions, and I chose tuition-driven institutions.

These institutions are Hispanic-serving, religious, minority-serving, Asian Islander, tribal, women’s, men’s, vocational, regional. It’s this bandwidth and sector of institutions that if they don’t hit enrollment, they have to cut. The biggest group in that group of eight that I just listed is the religious institutions, and that category includes anything from Mormon to Catholic, to Muslim, to Protestant. There’s a variety of religious schools in the US. They make up the biggest group of tuition-driven institutions. And when you step on those campuses, when you’re looking at the tension between mission and money, it makes it really palpable.

I’m not trying to differentiate between lesser gray and a bit more gray. At a mission-driven institution, it gets to be really stark. It’s dark and light. It’s black and white. It becomes very easy to spot that tension if you choose those types of institutions.

Van
Help us better understand, because not everybody who is in the listener is well-versed in what is a mission-driven institution? And give us an example of what you mean when it says the difference is very stark and there’s a conflict or a tension.

Josh
What you’re going to find is that these mission-driven institutions have in their charter some sort of charge to take educational access or educational opportunity, usually to a unique group or population of persons. So for example, Historically Black Colleges and Universities…you’ll see in their mission that they were created and established to bring educational access and opportunity to the Black community in those regions. Hispanic serving, same thing.

In some of these institutions that were founded by either Protestants or Catholics that I lived on, for example, there’s one group of monks that walks across the Plains and decides that they’re going to set up a university for the immigrant population in the Midwest. There’s another group of nuns who walked through the desert and set up a hospital and a university side by side in a major metropolitan area, and it both are still flourishing to this day, but they set those institutions up in the late 1800s and the early 1900s during a pandemic, ironically.

And they felt charged to bring educational access and opportunity with the Catholic lens to it, to those institutions or to those groups of people who would not have either healthcare or access to higher education if they did not come. Back when a number of these institutions were started, this is long before the social safety net that the government has built even existed. So the Catholic and the Protestant individuals who started these institutions, when they went into these communities, they were the social safety net for that region.

Van
And so Josh, you detail four strategies that these colleges have pursued in their fight for survival. I wonder if you could just share some of those with us.

Josh
Yeah, happy to briefly. So as the book opens, I show you that the traditional strategy, this sort of prestige-driven strategy that is based on the elites, it’s what I just mentioned a few moments ago. These paradigms, these lenses that we assume that you come to a tradition, you come onto the campus to receive your education, and these institutions have endowments, and they choose to subsidize the residential model. They pull those revenues in from the endowment — usually anywhere on average from five to 15% annually — and they subsidize the residential model. But again, it’s prestige-driven, and the assumption is that you come. That’s strategy number one.

Strategy number two is what I call the pioneer strategy. These folks invert, they flip. Instead of assuming that students come to us, they decided to take the classroom to students. These were first movers. One of the things that — and this is the first of three entrepreneurial categories in the book — one of the things that I heard over and over and over again was I asked presidents and provosts and board members about, “Hey, can you please explain the growth and the innovation today?” Over and over again, I heard these leaders say, “To understand what we’re doing today, we need to take you back 10 years. We need to take you back 20 years to the moment where we almost shuttered. This institution almost closed.”

In that moment, that was when they embraced innovation. That was when they embraced an entrepreneurial mindset towards education. This is the first of those three types of schools, and it’s the pioneer strategy. For example, one of the schools was in a state that didn’t have a community college system, but what they did have was a board member who had a chain of hotels throughout the state. That board member made the suggestion that what if we used the chain of hotels as satellite campuses? So, the model that they created, that was extremely successful for more than two decades, was that they would set up campus or they would set up courses on Friday, Saturday, Sunday. Students would drive just a mere matter of minutes to the hotel rather than multiple hours to the main campus, and they would have class, and then they would go home.

The benefit to the institution is that they’re not holding that asset on their books. They didn’t have to build a residence hall, they didn’t have to build a cafeteria, they didn’t have to build a quad, they didn’t have to build a football stadium. And so what you’re doing is you flip the innovation: you take the education to the students, but you also keep those assets off your books. And so these institutions set up classes in hotels, military bases, high schools, and shopping centers.

The third strategy was what I call the network strategy. The pioneers had multiple sites of one type, but the network folks had multiple types rather than multiple sites. One president told me, he was like, “Josh, I’ve got the tabletop strategy of higher ed.” And I go, “What do you mean?” And he said, “Take the tabletop.” He goes, “That’s the main campus. I have seven or eight different revenue generating legs that support the main tabletop, the main campus. My job as CEO is to find as many revenue generating legs as possible.” And he starts to list them: international, vocational, transfer, adult. Again, they had seven or eight different types in a long list that’s in that specific chapter.

For these individuals, the key for them was that they moved quickly, they saturated with speed. They would go into a market and when they went in, they went in quick, they went in hard and they built a beachhead. They built a foundation because about two to three years later, other institutions also moved into the same area. And by then, the specific schools had already established a brand recognition in those specific areas. Remember multiple types. What they couldn’t do, and they struggled to do — and this is how the network chapter ends — is they couldn’t crack the code to scale. The accelerated institution, which is the fourth strategy, cracks the code to scale.

The way that I designed the book is that if you created this artificial starting line and you put all eight schools on the starting line in the year 2000, they were similar enrollment, similar size, they were similarly resourced. And if you fired the gun and they started to race around the track, what would explain the school that only made one lap versus the school that by 2015 was on lap 16 and had already run four miles? That’s the accelerated strategy. That school in the year 2000 merely had a one-to-one ratio of online to residential. By the time we get to 2016, as I’m on campus talking with these presidents right before COVID, they’re at a 10 to one ratio of online to residential.

This sort of begs the question. Take Southern New Hampshire University. If you’ve got 50,000 students online and 5,000 on campus, are you an online university with a small residential campus or are you a residential campus with a super robust online sort of student body that you’re also educating? The key for these institutions in accelerating and taking to scale was they held costs flat.

So remember the equation I gave you at the onset of our episode: more students equals more money if you want to grow just plus one. And  that is the arithmetic of growth. It looks like a series of steps and it’s arithmetic because as you get 300, you have to build a residence hall. As you get 500, you have to build a cafeteria and there’s costs associated with that.

One of the provosts early on in the book is wrestling. She’s trying to figure out. She goes, “We can’t figure out how to move our geometric growth to arithmetic growth, the parabola, the exponential growth, that S-curve that you see in Amazon and Apple and all of the Silicon Valley stocks.” This school figures out how to get that growth. Instead of just making more students equal more money, it’s we can make more money per student as well. And so there’s this exponential element to their growth and to their margins.

As I’m with these individuals and they’re talking with me, they can see a fifth strategy, but they can’t figure out how to get there.  I called that strategy accelerated networks. Imagine taking three or four of these markets to scale? The question that one of the IT persons asks me is, what if we scaled K-12? What if we scaled international? What if we scaled undergraduate? And instead of having just one market that was taken to scale, they were trying to figure out how can we take multiple markets to scale so that we have an accelerated network.

So those are the five: traditional, pioneer, network, accelerated and then the emergence of accelerated networks.

Van
Oh, it’s fascinating to hear this framework.  I was wondering, Josh, in this moment when so many institutions have gone online, when one of these colleges decide to pursue number four, the accelerated strategy, how do they get market share or brand notice online when there’s so much competition?

Joshua
So some of these were early adopters. Others went with speed and saturation. Others have figured out how to use very entrepreneurial ways of marketing. Pay-per-click is one. There’s others that are using metrics provided by Google where they can identify and geo-locate prospective students. And so they’re spending less money per student on marketing, but they’re able to broadcast that further and they can do that just by learning simple demographics. So they’ve sort of ramped up their admissions strategies and techniques so that they’re just getting more bang for their buck, so to speak.

Van
I’ve always had a question — given the changes happening to higher education — which is, what’s the purpose of place these days? What’s the value of a campus? Were there any themes that you were able to see about what is becoming the value of a campus compared to all the other education that you can have that is online?

Josh
Yeah, that’s an excellent question, Van. One of the assumed ones is the socialization. There’s sort of two prongs with education. There’s information and socialization, and that in-person in-place gives the opportunity for the socialization aspect to take place. At some institutions, it’s big-time football, fraternities, sororities, the social life looks like that. At these religious schools, it’s a lot less that. It’s more value-driven, it’s more communal, there’s more service and social justice at hand. They don’t have these really massive, massive football teams, but they do have other elements of relationship building.

There’s this element also of spouse finding, regardless of what gender that may be, where the person that you ultimately hitch with or connect with in life you find during this era in the traditional model. So there’s that element of a socialization going on.

For some, there are parents who had a specific sort of way that they experienced college and they want to send their kids to a different sort of way, and that’s what’s occurring at some of these institutions, both the Protestant and the Catholic. And so as these traditional aged individuals go away to school, there is a very significant element of not just socialization, but because these are value-driven institutions, there’s also a value transfer element here, which sort of gets into a question that we’ll talk about a little bit later, so I won’t get too much into it now. But in this instance, the value is not just in the mission, the value is part of the product.

Van
Tell me more about that, Josh.

Josh
So think of the parent that says, “I’m going to send you, Junior, off to Brigham Young or Notre Dame because it embodies the values that I want  you to possess four years later. And so values is both mission and product because at the end of the four years, the hope is that the individual who went through that experience embodies the values of the institution that are written into the mission.

Van
Because you’re in a community on campus where everybody is doing similar traditions, similar behaviors or learning similar information…so therefore there’s a shared community of practice, essentially, especially the religious practices. Okay, got it. So, what surprised you most in your conversations with the 150 college leaders?

Josh
What I didn’t see coming was the stigmatization. I call this the stigmatization inherent with innovation. These individuals, in their moment of confronting they were going to have to close the institution, it’s in that moment that they finally developed the courage to say, “To hell with the norms. To hell with what we’re supposed to do. We’re not going to follow what the elites say and the best practices. We’re going to follow our own path and we’re going to innovate.” That was the first thing. In the moment of closure, they jettisoned the strong and powerful social norms that govern the field. But in so doing, they became stigmatized.

There was this discussion I was having with one of the presidents and he says, “I don’t go to conferences anymore and neither did my predecessor.” He goes, “Every time we go to these conferences, we get laughed at, we get scolded, we get criticized for stealing other students or encroaching into other markets just down the road, or we get accused of being a degree mill.”

Ironically, these practices that at the time were innovative and edgy are now the norm, and this is one of the sentences in the book that I say a few times is, “Tuition-driven institutions innovate, elites legitimate.” If you want to see where the innovation in the sector is, go to the margins. Once those practices become less stigmatized and more taken for granted, then it becomes more safe for the elites to adopt those practices.

That was just one of the things that I did not see coming, which was the jettisoning of the social norms and the stigmatization that I argue is almost inherent with innovation if you’re not using innovation as a buzzword.

Van
Well, it sounds like they took advantage of a crisis in order to introduce innovation. So, on the things that would not be a surprise, did you see examples of faculty or academic leaders pushing back during these moments?

Josh
I did. Let me talk about this in a way that’s sort of protective to individuals. So the book opens with me sitting down with a provost and they say, “Don’t hit record yet. I want to say some things off the record and talk about those.” And the way that this individual was pushing back was as an individual employee in an organization. What they realized was — as my friend, Tressie McMillan always says — the institution cannot love you. And what this individual basically said was, “Josh, if you’re going to work in higher ed, you need to have a go to hell fund.” And I go, “Well, what is that? ” And they said, “You’re going to be asked to do things by the institution that you don’t want to do, and at some point you’re going to need to have a financial fund that allows you to basically tell your employer to “go to hell” and to walk away.”

The pushback here was not just in an instance, but to create this sort of safety net, this sort of mechanism for yourself as an individual, because regardless of the institution that you’re in, you may be asked to do something that you may not want to do and when that moment comes, you need to have the opportunity to find freedom or to provide freedom for yourself.

Van
Josh, just a clarification, they’re not being asked to do something unethical…they’re being asked to do something hard and difficult?

Josh
That’s a very good question The ethical part is gray. They would be asked to do something that went against their value system. In this instance, the provost was being asked to sign a non-compete clause that would prohibit the provost from doing work pro bono with other struggling institutions. They were really wrestling with this tension of wanting to help struggling institutions pro bono because they care about them, versus keeping the industry secrets in this institution.

Another example was another CEO at a Catholic institution looked at me and she said, “This is confidential, right?” And I say, “Yes.” And she said, “Because what I’m about to say is so not Catholic. It’s so gluttonous.” She said, “We want more and more margins and yet we went out and tried to revoke this contract from this online program manager we had outsourced all of our admissions and all of our enrollment to. They were taking a 30 to 40% cut. As a leadership team, we saw that if we pulled that contract back, we could also pull that 30 to 40% cut back into the organization. In doing so, we killed the goose that was laying our golden eggs.”

Time and time again throughout that chapter, there are quotes from her where she speaks truth to power. She goes into the VP of finance, she goes into the president, she goes into one of the board members and she says, “You can’t do this. If you do this, you’re going to undercut not just our mission, not just what we believe in, but a contract that we’ve signed as well as some of our values.”

So this is why I say it’s not like a black and white illegal, it’s just sort of this gray area of it goes against values that either the individuals have or the institutions themselves purport to have because of their religion.

Van
Well, I know many of us in all of our careers have been advised to have a rainy day fund, maybe the equivalent of the “go to hell” fund, so that you can have options whenever a situation arises. It sounds like you were able to have some really frank and honest conversations with leaders in higher education as they wrestled with whatever their situational dilemma was. Thank you for sharing those.

Josh
Thank you. They were truly transparent moments, and that’s part of the reason why in the book all the names of the cities, the schools, and all of the people are fake names so that they could be extremely candid.

Van
So every organization, including nonprofit ones, have to wrestle with fiscal stability…how do you have monies that come in that cover the cost of what you’re doing? I feel like I’ve already asked you this, but maybe should I ask it again…were there strategies that successfully reconciled the fiscal stability with the educational missions?

Josh
I put them into buckets. If I could blend one, what I really like is the diversification of the network, the tabletop where you have multiple legs that sort of balance, as in a stock market portfolio. But I also love the innovation that was readily apparent in the accelerated institution, even though they didn’t necessarily treat their employees the best. But that spirit of can-do, that spirit of entrepreneurialism, allowed them to go out and do things with educational models that others weren’t willing to do at the time. And now you’re seeing other more mainline institutions like Vanderbilt do these things. Vanderbilt purchased land in New York City, Fort Lauderdale, and the Bay Area, so now you’re seeing Vanderbilt doing a satellite model that has been around for 25, 30 years because these tuition-driven institutions pioneered it. Now that it’s been pioneered, it’s safe for Vanderbilt to do Again, tuition-driven, innovate, elites, legitimate.

Van
The book also offers some principles of innovation and new knowledge that can apply to the healthcare sector. Tell us about those.

Josh
Yeah. So in the book, I try to identify approaches with regard to how these leaders come up with innovation, how they come up with new knowledge. There were four. One is what I call the revolutionary. Very rarely will you see these types of innovations. This is the advent of online, the advent of AI. If you think like Einstein, E = mc² these are your once in a lifetime breakthroughs. And for institutions to capitalize now, they actually have that opportunity on AI if they get their head around it. But by and large, this wasn’t a strategy that folks pursued. The other three are what they did pursue, which are: extend, converge, and flip it.

‘Extend’ is where you take new knowledge and you just extend it slightly. There’s a provost who tells me, “Josh, I had a vision one day that I was standing in front of a storefront and I opened the doors and on this side of the store all the way back as far as the eye could see was one product, and on this side of the store as far back as far as the eye could see is another product.” And he said, “This was our institution with online. We sold an MBA and an interdisciplinary degree. That was it. We only sold two degrees. And so I asked myself, what if I took some of these courses that were in the residential model and I moved them to online, what would happen?”

He found 85 courses that were transformed from residential to online over the summer, and in the summer, the institution began selling 35 online degrees. This is a fundamental shift because they saw themselves shifting from selling courses to selling degrees. It’s like the shift from selling an individual can to a six-pack. That innovation was just an extend. They just moved it an inch, but it enabled them to come up with new markets.

The other was converge. You converge new knowledge. For example, one institution took knowledge from the airlines where you oversell your flight and they applied it to course registration. At the beginning of each semester, what they discovered was that 25 students were enrolled in every course, but by the time you got two weeks in, usually enrollment was down to 19 or 18. So what they began doing was they began intentionally over-enrolling the course by six or seven students so that two weeks in when drop/add finally hit, they were at 25. In the book, the individual says it made them roughly five million a year.

The fourth one is flip it. And again, the example here was instead of expecting students to come, we’re going to come to you. Can you flip whatever your tradition is or whatever your assumption or practice is in your organization – whether it’s a museum, hospital, church, university — can you flip your practice in such a way that what you’re doing actually becomes innovative? So it was revolutionary, extend, converge, and flip it.

Van
Well, you’ve shared with us the stark reality that higher education institutions face in a way that really makes real the business of running an education institution. So, given all that you’ve learned through the research for the book, do you remain optimistic about the future of higher education? What do you think it’ll look like in 10 years?

Josh
I do. I remain incredibly optimistic, but the burden and the onus is on those of us in the field collectively to do a few things. The very first thing is that we have to identify the value add and our value propositions. Those have to be clear in an age of AI. Our constituents, our students are wondering, why would I pay this amount of money to get information that I can get off of Claude AI or the internet? And if the job market is being decimated, why do I need the credential? So that value add actually needs to be really, really clear by institutions and they need to communicate that and they need to show empirically with outcomes and data that they’re on top of that curve, they’re in front of the tsunami. They’re not behind. They’re actually out in front of it. So, that’s first and foremost.

I think we’re also going to see a continued consolidation of the field, and we’re going to see that because that’s the system that we have designed as a society. When you have market-oriented public policies that govern an entire industry by competition, you will no doubt see consolidation. It’s just going to happen. You see it in the Silicon Valley, you’re going to see it in higher education.

Third, I think what you’re going to see continued — unless we can figure this out and get our minds around it — is you’re going to see  K-shaped wealth continue. You’re going to see the wealthy become wealthier. You’re going to see the poor become poorer. Unless we can reexamine those old mechanisms that are distributing the resources, the K-shaped wealth of organizations will continue to mirror the K-shaped wealth that we’re seeing in society.

Then I think shared governance is going to be a whole new thing. I think shared governance will survive, but I think faculty will finally understand that the shared governance that survives will have moved from critique-centered shared governance to solution-centered shared governance. Just because you’re in a shared governance model doesn’t mean that you can come to the table and just critique, critique, critique, critique, critique. I will hear your critique. I want to listen to your critique, but leadership and governance, Van, as you know, requires coming to the table with solutions, not just critiques.

The last one I would share is that what’s going to happen is that all universities are going to have markets that are focused on lifelong learning, not just traditional undergrad and graduate. And what you’re going to see is that all universities are going to start to spin off into say executive education. With the ‘Big Beautiful Bill Act’ you’re going to see all of that vocational funding that was just opened up for workforce training. You’re going to see four-year institutions pursue that. Folks like Arizona State and Boston University are already pursuing late life and retirement learning where you can come to the campus and there are retirement facilities or opportunities on campus. So there’s this sort of long arc of learning as opposed to just this post 18 to 22 period.

I think the horizon is big. I think the opportunities are plenty. I just think, again, it goes back to the moment where those institutions were about to shutter and they said, “You know what? We have to change in this moment of crisis. We’ve got to jettison the norms that we’re used to. We need to innovate.”

The institutions that can do that now will succeed just as these institutions in the book did that I chronicled.

Van
I like your call to action, Josh. Where would listeners get a copy of your book Capitalizing on College How Higher Education Went from Mission Driven to Margin Obsessed?

Josh
You can either head directly to my website, www.joshuatravissbrown.com, and it’ll take you to a variety of options, or you can head to amazon.com, or barnesandnoble.com. You can also pick it up on Goodreads and, fingers crossed, shortly after this episode launches it will be available late April on audiobook format thanks to the wonderful voice actors who have just finished producing it.

Van
Fabulous. Well, thank you very much, Dr. Joshua Travis Brown, for spending time with us. We gained a lot from your insights, so thank you for sharing the contents of your book.

Josh
Thanks so much, Van. It’s been a pleasure being with you and your audience.

Van
I’m Van Ton-Quinlivan with Futuro Health. Thanks for checking out this episode of WorkforceRx. I hope you will join us again as we continue to explore how to create a future-focused workforce in America.