Stories

Higher Education Market Trends Q2 2023

by Greg Fraikor

Exterior buildings with people walking and people sitting outside.
graduate hat

Recent changes to the higher education ecosystem will permanently influence and evolve the student experience regarding wellness, virtual learning, inclusivity, costs and environment.

Newest Trends

Influence of Tech/AI Campus

Perhaps the greatest change creating shockwaves in the higher ed community are the recent advances in artificial intelligence, more specifically ChatGPT. The artificial intelligence chatbot that can instantly create written material on nearly any subject is being called the “greatest creative disruptor to education and instruction in a generation.” Since being released in late 2022, the higher ed community is deep in discussions regarding ethics, plagiarism, and integration of AI in the workforce, and how this shapes what higher education of the future may look like for both students and educators.

What role will AI play in curriculum development and course delivery? Has the age of the robot professor arrived? Will the benefits of the in-person “college experience” be overcome by the cost to benefit considerations offered by virtual and AI learning?

Mark Zuckerburg’s investments in Metauniversity is a great example of a VR-enabled learning environment aimed at establishing virtual universities accessible from anywhere. The timing appears right, as the industry is experiencing a historic rise in the number of university closures, acquisitions and mergers, and consolidations of smaller and less financially secure colleges. The concepts presented in a remote ecosystem offer expanded opportunities particularly for rural communities that have been historically underserved. We can expect to see more of this gamification of learning throughout our educational system.

2X

Tuition increased by more than double between 2008 and 2020

4.3 %

Freshmen enrollment increased 4.3% in 2022, with applications up 20% from prepandemic numbers

12.5 %

American colleges and universities saw increase in philanthropic gifts of 12.5% in 2022

Trends to Watch

University Funding and Enrollment

Historically, obtaining a degree has been proven to increase an individual’s earning potential, civic engagement, and leadership. For the last decade, rising tuition costs have outpaced inflation, driving scrutiny on the ROI for college degrees.

Tuition costs trended downward this year for the first time in over a decade. Increased competition and recent recessionary pressures resulted in an average of 4.5% tuition decrease. Although welcome news for parents and students alike, smaller institutions reliant on tuition will continue to feel pressures. A positive shift from the previous few years is that freshmen enrollment in all institution types increased by 4.3% in 2022. Furthermore, Biden’s 2023 budget request outlines greater funding of our public higher education system with a focus on affordability in the form of enhanced Pell Grants and tuition-free Community Colleges, and historically underserved colleges such as HBCUs, TCCUs, and MSIs. Philanthropic gifts to American colleges and universities also saw an increase the past couple of years—a 12.5% increase in 2022 alone.

While enrollment is up, graduation rates are trending flat nationally hovering around 62.2% from four-year degree programs. Universities and colleges continue to seek creative ways to entice students with unfinished degrees to complete offering increased online courses and more transdisciplinary degree options.

Trends to Watch

Construction

Despite continued global economic uncertainties, the Higher Education design and construction market exhibits indicators of continued strength consistent with previous forecasting. While we continue to watch the AI and virtual revolutions evolve, student wellness continues to be a focus with new and major remodels of recreational and athletic facilities and student engagement projects moving forward. Facility security continues as an active and evolving priority and evaluation of mass timber solutions is gaining traction. Momentum additionally continues for the design and construction of interdisciplinary science and technology facilities and our outlook remains positive heading into the summer.

greenhouses

How Can We Help?

Prefabrication

While endowments and state spending are up for universities across the board, we still have record high inflation. DPR’s industry leading cost management systems and tools are allowing our institutional clients to choose the best design and construction solutions to achieve the highest value quickly.

Solutioning

Integration of DPR’s supply chain tools, prefabrication solutions and communicating those through interactive Join.Build cost analysis sessions, continue to offer our clients near real time cost and schedule solutioning in volatile and increasing interest markets.

Early Cost Modeling

Our early integration and cost modeling services provide critical project design and construction alternatives and information to help inform and execute successful procurements and projects.

Flexibility

Presenting innovative solutions to future flexibility is our biggest advantage as our university clients seek to maximize funds and repurpose existing facilities.

Report pages

Looking for more general market insights? Take a look at our full market conditions report of Q2 2023. Or take the full report with you by downloading the PDF.

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