Reduced return on investment for students, cuts in government spending, and “significant skills mismatches between graduates’ abilities and the jobs available” are driving six new trends in higher education, according to a new report from The Brookings Institution.

Authors Emal Dusst and Rebecca Winthrop argue that in addition to reduced funding, rising costs, and decreasing wage premiums in places like the US and UK, “there is also the worry that what students learn at university will not necessarily give them the skills needed for the jobs available”.

“This skills mis-match is particularly acute in fields like computer science where real-world practice easily outpaces academic curricula,” they add.

By 2020, they say, one million computer science-related jobs will go unfilled while many computer science programs at universities “are outdated”.

They cite one student with a degree from an elite public university that included an innovative tech program as saying – “my university courses taught me all about the theory of computer science, but I couldn’t actually code”.

Such comments come in the context of the six developing “notable” trends, which they say are:

Online education has become an increasingly accepted option, especially when “stackable” into degrees.

Enrolment in online courses has more than quadrupled in the last 15 years in the US, they say, and “while not as explosive in other countries”, online options are gaining traction around the world. Given the increased cost of higher education, “online programs are offering not just increased flexibility, but also a major reduction in cost”.

They cite a Coursera fully online master’s degree from the University of Pennsylvania in computer and information technology available “for one-third the cost of the on-campus version”. Several programs are also allowing students to “test” degrees by taking courses that can eventually be “stacked” into a degree, thus lowering their risk.

Competency-based education (CBE) lowers costs and reduces completion time for students.

There is an increase in CBE, they say, which allows students “to apply their work and life experience to their education. These degree programs tend to be less expensive, self-paced, and more career-oriented”. If students – either through workplace training, outside reading, or purely life experience – happen to have the competence and knowledge required for a particular subject, “they can take the test and get credit without having to take a class”.

Income Share Agreements (ISAs) help students reduce the risk associated with student loans.

In the US, they say, the private sector is improving the student loan dilemma for students with ISAs. “Countries like Australia have government-run agreements – where students don’t pay back their loans until they get a job and meet certain income thresholds – but currently, private companies provide ISA options in the US”.  One newly accredited applied computer science degree designed to take two to three years requires students to pay back 20 percent of their income for the first five years of employment “and if they don’t find a job, they aren’t responsible for payments”.

Online Program Manager (OPM) organisations benefit both universities and nontraditional, working-adult students.

OPMs help traditional universities build and maintain their online degree or program offerings, while opening new and flexible options to nontraditional students, they explain. “Generally, through a revenue share model, the university provides the content, while the OPM primarily puts it online and leads the marketing efforts.”

Enterprise training companies are filling the skills gap by working directly with employers.

“Given the massive mismatch in employer needs and worker skills, there are many companies working with corporations to ensure employees are rightfully skilled”, they write. As an example they cite Trilogy Education which “not only partners with universities … but also leverages its network of partners and its platform to help companies bridge their own tech-talent gaps in both hiring and training”.

Pathway programs facilitate increasing transnational education, which serves as an additional revenue stream for universities.

The “brightest students around the world that can afford to study abroad” are increasingly embarking on journeys overseas, primarily to the US, UK, and Australia. According to Studyportals, they say, the number of internationally mobile students is expected to increase from 4.5 million in 2015 to nearly seven million in 2030. “International students are increasingly attractive to universities, as they allow expanded reach and programs offered at different price points. Students from China, India, Saudi Arabia, and South Korea account for more than 50 percent of students who go abroad to earn their degree, with China as the largest source.

“Pathway programs, which are a small but fast-growing segment of the transnational education market, help foreign students get admission into US institutions through bridging academic entry standards. Companies such as the UK-based Study Group and US-based Shorelight partner with universities to set up these programs and use revenue share models, providing an additional revenue source for universities. Most of these programs are in countries that have been traditional draws for higher education like the U.S., but some are now also in countries like China that traditionally send many students overseas.”

They add that “there will undoubtedly be ongoing opportunities for new approaches and actors to innovate in higher education as the sector continues to face high costs, decreasing returns on investment, and skills mis-matches”.

Read the report in full here