Struggling US regional colleges’ best hope is to embrace CX and AI

Declining enrolments are causing regional US colleges and universities to close or merge at a precipitous rate, inflicting economic, social and cultural damage on the communities they serve. Stopping the diminishment is vital. But it won’t be straightforward.

We know that the challenges are not due just to demographic shifts. Increasingly, high school graduates are opting not to attend college, a trend that is boosted by an increasing number of employers no longer requiring college degrees. Incumbents in the online delivery space, such as Arizona State University and Southern New Hampshire University, continue to claim more of the overall higher ed market share. Meanwhile, investment in artificial intelligence (AI) and edtech is surging, creating ever more advanced educational tools for a range of audiences.

The current environment finds well-resourced institutions better positioned than ever to capitalise on competitive advantages, such as financial margins, waiting lists and brand recognition. For regional universities, though, the choice is to innovate or, potentially, to die.

In 2021, on the heels of the pandemic, I proposed that such institutions “play to strengths” by leveraging regional assets and building a culture of change. That remains true, but in the current climate these approaches must be augmented by an urgent focus on consumer experience and AI.

The quality and utility of the consumer experience (known in business jargon as CX) takes on increased importance in a highly competitive market where opportunities for distinction are limited. Regional universities must strive to excel in all three key areas of CX in higher education: customer service, classroom engagement and student support services.

In higher education, the notion that friction and bureaucracy are a necessary part of the experience is an unfortunate but persistent vestige of our legacy. The recent problems with the rollout of FAFSA, the student aid applications system, have not helped in that regard.

However, in the business world, firms that lead in customer service demonstrably outperform competitors. And consumers increasingly expect elite in-person experiences. In retail, for instance, consumers with unmet expectations can easily turn to the cheapness and convenience of Amazon and other online vendors.

Whether or not students ought to be considered customers is a topic of frequent debate in higher education circles, but providing elite, personalised service to all-comers ought not to be confused with that. The focus on customer service will only increase as competition intensifies.

Faculty play a critical role in engaging students, mainly via their teaching. Hence, making class attendance optional might not do students any favours, especially underprepared students. The benefits of an engaging in-person classroom experience are both academic and social. Knowledge is best built together, alongside other students who share a sense of agency. And regular attendance fosters a sense of belonging, helping to combat feelings of loneliness and social isolation.

Robust student support services are also requisite at regional universities, where students come from a range of backgrounds and circumstances. In times of financial exigency, student services tend to be among the first to experience cuts. But cost reductions can no longer come at the expense of delivery.

How to square that circle? While it is not a panacea, AI can be used to complement and even improve student services functions. Examples include early alert, collecting and assessing feedback, reviewing resumes, reading transcripts, recommending courses, determining course equivalencies for transfer and career services. Universities are also turning to virtual mental health service providers, such as BetterHelp and UWill, for assistance with their increased workload in this area. Increasingly, focusing on human-centred AI will enhance consumer experience.

In addition to improving processes, AI can also save costs. The bar for entry into generative AI was obliterated in November 2022, when ChatGPT became free to the public, and the technology is already finding its way into budgeting, financial aid, admissions and marketing and communications, as well as teaching and learning. But successful harnessing of AI will require vision and creativity.

According to the book Power and Prediction: The Disruptive Economics of Artificial Intelligence, published around the same time as ChatGPT was launched, we are in “between times” regarding AI. Just as it took 40 years from the light bulb’s invention to 50 per cent of households having electricity, AI will need time to ramp up to its full effect. It is during this window of ambiguity that enterprising institutions will advance.

Regional colleges can take advantage of their smaller size and infrastructure to demonstrate nimbleness, implementing “point solutions” to complement existing processes or designing “system solutions” to entirely re-engineer processes, from A to Z.

Hard choices await. At a time in which new AI-driven technologies are increasingly available, regional institutions will need to make decisions about investing in commercial products versus building homegrown solutions. Integrating them will raise different issues for each institution.

Innovation requires managerial bandwidth in the form of resources and time, not to mention an entrepreneurial bent that includes tolerance for trial and error. Not all colleges will meet the bar. But for those embracing AI creatively, the return on investment can be enormous.

The only constant is change. In an era of exponential technological advancement, renewed focus on human welfare is paramount. How CX and AI are leveraged, strategically or passively, will determine much about an institution’s future. Regional colleges mastering these two elements will take demonstrable steps towards not only survival but also success.

Eric Skipper is provost and executive vice-chancellor for academic affairs at the University of South Carolina-Beaufort.