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Opinion: The Economy of Higher Education in 2023

The pandemic brought accelerated tech adoption, new funding opportunities and operational changes to higher education. The near future may require careful prioritization and institutional investment.

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Hot economic news in 2023 so far includes inflation, recession, employment, governmental shutdowns, and most recently, bank failures. The world economy may seem in disarray as stock markets swing wildly without specific rationale, and the impact can be seen in our daily lives, education and government. This creates a challenging environment for higher education, making it difficult to plan for prudent investment and integration of technologies. What follows are some strategies related to future technology procurements that might help colleges and universities navigate the long-term effects of the pandemic.


Certainly, the pandemic increased our daily use of technology. In 2021, the Pew Research Center stated “90 percent of Americans say the Internet has been essential or important to them, many made video calls and 40 percent used technology in new ways. But while tech was a lifeline for some, others faced struggles.” This accelerated the use of technology in higher education to swiftly make teaching and learning effectively work through remote online learning. In addition, faculty and staff had to transition to a new remote work environment. During this period, schools made large investments through institutional and government funding to bring appropriate software applications and network connectivity online. In late 2021, McKinsey & Company conducted a survey to determine what classroom technology best promoted interactivity during the pandemic. The survey noted a “19 percent average increase in overall use of these learning technologies since the start of the COVID-19 pandemic.” The survey showed group work and connectivity and community building saw the largest increase, with classroom interaction technologies the most utilized. Institutions consistently used Zoom, Microsoft Teams, Google Hangouts/Meet, learning management systems, support student success systems, and many more.


The proliferation of educational technology during the pandemic solidified its continued growth for the foreseeable future. In the K-12 arena, the EdWeek Research Center conducted a survey of teachers, principals and district leaders from March 2020 through January 2022. The survey found “nearly 60 percent of respondents said their experiences using ed tech during remote learning had made them more willing to use technology with their students.” These expectations of K-12 students will be reinforced as they continue on to higher education. In fact, some of the top 10 IT Issues for Higher Ed in 2023 by Educause include: “using technology, data insight, agility to create a frictionless student experience, updating IT services to support remote/hybrid work, and developing a learning-first and technology-enabled learning strategy.”


Colleges and universities have invested substantial amounts to procure new technologies through their own institutional funding sources along with government grants. As part of the 2020 CARES Act, approximately $14 billion went to the Office of Postsecondary Education in the form of the Higher Education Emergency Relief Fund (HEERF). This funding was intended “to better meet students’ basic needs, whether through need-based grants or better on-campus resources.” Many colleges and universities utilized this funding to provide emergency aid to students and improve access to technology. The future challenge for institutions is when this funding dries up. The Department of Education issued a notice that the deadline for the HEERF performance period has been automatically extended to June 30, 2023. Future funding has not been announced. Funds used to invest in technology will need to be taken on by the institution itself to maintain or improve what they purchased. Grant funding was very beneficial, but it is not a “one and done” proposition. Deferred maintenance of these investments may become a challenge for some colleges and universities in the future.


It will be important for higher education to nimbly react to inflation and recession pressures. Cash-strapped institutions may not be able to afford borrowing dollars to fund future technology investments. During a recession, higher education could dramatically see budget reductions, especially at public colleges and universities. One option is to raise tuition, if their individual state legislatures approve such a move. In an article last October by Heidi Rivera on, “According to a study by the Lumina Foundation, college tuition prices tend to rise when a recession hits. That’s because higher education is one of the first categories where state and local governments cut spending.” And while recessions can cause budget cuts, historically they coincide with an increase in student enrollment. With the potential for increased tuition, either students would need to take on additional loans or look at other educational options and training, perhaps through two-year colleges or certifications. As higher education struggles for funding solutions, external grants or donor contributions may help fill the gap of investments in technology and other student needs.


Whether in higher education, business or government, the impact of the pandemic on technology use may very well be permanent. A 2021 survey by The Atlas posed the question, “Do you expect the software and technology adoption made during the pandemic to be permanent?” The survey found that in local governments, software and technology is here to stay, with 79 percent of respondents reporting they were using more technology due to COVID-19, and 72 percent reporting they expected that change to be permanent. These results relate equally to higher education. In a December article for Fierce Education, Susan Fourtané cited Global Market Insights predicting that the e-learning market will exceed $1 trillion by 2028, and the technology trends to watch out for in 2023 include such technologies as AI, VR/AR, IoT, blockchain, cloud and gamification. Carefully selecting tools and pooling college and university purchases may also be advantageous. These trends, while enticing, will require careful prioritization and subsequent institutional investment. Being economically nimble and savvy will be important to ensure success in 2023.
Jim Jorstad is Senior Fellow for the Center for Digital Education and the Center for Digital Government. He is a retired emeritus interim CIO and Cyber Security Designee for the Chancellor’s Office at the University of Wisconsin-La Crosse. He served in leadership roles as director of IT client services, academic technologies and media services, providing services to over 1,500 staff and 10,000 students. Jim has experience in IT operations, teaching and learning, and social media strategy. His work has appeared on CNN, MSNBC, Forbes and NPR, and he is a recipient of the 2013 CNN iReport Spirit Award. Jim is an EDUCAUSE Leading Change Fellow and was chosen as one of the Top 30 Media Producers in the U.S.