For Immediate Release

Trends in Higher Education and the State of the College Textbook Industry

Presentation given by June Smith, Executive Vice President, Director, College Division Houghton Mifflin Co.

February 8, 2005

at the Independent College Bookstore Association Textbook Summit

In order to provide food for thought for the small group discussions, I will first talk this morning about the macro trends that are affecting higher education, several of which have already been mentioned by Jim Williams, and then how these trends are filtering down on campuses and in the classroom and how the Houghton Mifflin College Division as well as other publishers are developing and producing new products to meet the changing needs and expectations of our customers.

Last week, while working on my presentation, I read an article in the Wall Street Journal, which discussed the trends in higher education, and I incorporated some of its themes in my talk this morning. [June Kronholz, “Trends (A Special Report): Higher Education—More Students, Higher Prices, Tougher Competition, Wall Street Journal, January 31, 2005.]

Finally, after many years of no growth, enrollments are expected to increase steadily and peak around 2010. This increase is directly related to the huge number of immigrants who came to the United States from about 1990 to 2000. In fact, there are some estimates that suggest that 80 percent of the students who make up this increase will come from diverse backgrounds. There are also estimates that indicate that many of the incoming freshmen will be older and poorer than earlier generations and will speak English as a second language. Additionally, they will need more financial aid.

At the same time as more financial aid is needed, states have been and are cutting their spending on public universities and community colleges. I don’t have to tell you that this is not a good combination, and has led to enormous increases in tuition over the last five years—which “everyone is angry about but which everyone agrees will not go away!”

Although there are building booms on some campuses, it is clear that colleges are looking for ways to enroll as many students as they can without having to build any more classrooms. Some of their strategies include:

the continued practice of allowing students who pass Advanced Placement courses and tests in high school to receive college credit for those courses.
the use of online learning by allowing students to take both traditional and online courses at the same time or by encouraging the development of hybrid courses, whereby a student goes to class for, say, two lectures a week and does the third day online.
the use of competency assessments to allow students to skip whole courses or sections of courses

Another trend is the success of the for-profits, for example, the University of Phoenix and DeVry. Many college presidents are salivating over how they too can change the traditional teaching model and be more cost effective.

And, of course, there’s technology, which has been a compelling trend for a number of years and is still with us. Many people believe that technology has not come close to realizing its potential in the education marketplace, and that its utilization can improve student learning and increase cost efficiency.

The last large trend I’ll mention is Accountability and Assessment, which may, in the end, be the most revolutionary for the higher education arena. There’s no question in my mind that over the next ten years, under pressure from state and federal governments, as well as parents and students, public colleges and community colleges will be required to demonstrate through different assessment instruments that their students are achieving the desired outcomes. Think No Child Left Behind for College Students! In fact, last week President Bush described the new Secretary of Education, Margaret Spellings, as “a self-described ‘hawk’ on education accountability.”

Most of these trends have been around in various degrees for the last five years or so. In order to remain as viable and profitable for the next 170 years as it has been for the last 170 years, Houghton Mifflin has been working to reinvent itself to deal with the issues and challenges in our marketplace.

More than ever before, college publishers are being asked to deal with the different needs of our student and professor customers, which, as all of you understand, comprise an enormous spectrum from 2-year to 4-year students, vastly under prepared students (with more on the way), students with English as a second language, professors with different teaching styles who teach in disciplines, each of which has different requirements, and who are not trained to teach students who lack basic skills. Something like 50 percent of all college students are required to take remedial courses before they can matriculate into accredited courses.

In order to meet the needs of this broad spectrum of student and professor customers, publishers publish multiple textbooks for each course, each with different pedagogical systems accompanied by an array of both electronic and print ancillaries.

Additionally, we also develop materials for a different type of post-secondary institution with different goals—the proprietary school. These schools have moved more quickly to online solutions and publishers are responding by building complete courses online.

And, as you all know, there’s great pressure on professors by students, parents, and administrators to use technology in the classroom. It is the publishers, however, who are being asked not only to provide content and tools for electronic delivery but also to provide the training for faculty and, sometimes students, in their use.

College publishers are in transition between the print and digital worlds. We have become software producers as much as print publishers. Whereas in the past, we would develop and publish a book and then spin off digital products, we now are focusing on developing all our content digitally and spinning off the print product later. We are learning how to unlock our content and have it available in multiple formats.

At Houghton we see a day, for example, when our digital content will reside in a database and can be “transformed” into a traditional textbook, a no frills textbook, an e-book, a textbook accompanied by an online course, or a pure distance learning course. And, of course, the content in this more flexible format will make custom publishing for both print and digital products much easier to produce and much more cost effective.

We do not see books disappearing but we do think books will play a different role in the future—one in which the book isn’t necessarily the core of the course but rather one of several learning tools used to promote student learning.

We have an active bookstore advisory group at Houghton Mifflin. Last year, when our bookstore advisors visited us in Boston, we spent time talking about how these trends in our marketplace are affecting the development of our programs for introductory courses, programs that include core texts and integrated technology tools. They really enjoyed learning more about how all these pieces worked and how they all fit together, and I thought you would too. Here’s an abbreviated version of that presentation.

***(Power Point Slides Available)***

For many years, colleges have focused on cutting costs, increasing learning, and improving retention. And the instructional format has remained the same—the lecture format rules, and the instructor has been the sage on the stage. In this lecture environment, having a core text with some key print and technology supplements, has worked fine.

Today, many colleges and universities are looking for ways to redesign their approaches to instruction, using technology to achieve both quality enhancements as well as cost savings. Much of the focus of this redesign is the introductory course. Why? Because, while these courses make up only 1 percent of all courses on a typical campus, these introductory courses enroll 30-50 percent of all students on a campus. Therefore, if you could make these courses more cost effective, you have a chance of substantial cost savings.

One group doing research in this area is the Center for Academic Transformation. Using millions of dollars of Pell Grant funding, the Center worked with 30 schools across the country to revamp introductory courses. These schools are now using many different course design models. The redesigns, however, all include the following:

an integrated, interactive teaching and learning model
24/7 access to content, support, and collaboration
automated grading and assessment, assessment, assessment

All the schools working with the Center rely on readily available interactive courseware from college publishers, software producers, and faculty, including course management software. And all have moved away from the lecture-only format to formats that incorporate a variety of teaching and learning strategies.

The results at these schools have been pretty amazing:

on average, there was a 40 percent reduction in the cost of running the redesigned introductory course
learning outcomes improved significantly
and retention rates increased

Now I’d like to talk about the types of content, tools, and services that are being developed at Houghton Mifflin to meet the needs of large introductory courses in both the traditional and proprietary schools, as well as the types of redesigned courses just discussed.

Classroom Management Systems:

Over the past 3-5 years, the use of classroom management systems like Blackboard, WebCT and eCollege has increased significantly. Many campuses have adopted these systems campus-wide and some states have even chosen a standard. Initially, these were used primarily for the grade book and communication tools that comprise them. Professors teaching large enrollment courses liked the ability to grade and track their students’ homework using these platforms.

More recently, professors have been looking to publishers for “high value” content within these systems that correlates with the text and allows their students multiple ways to learn, practice, and test themselves. Now, within the context of a classroom management system exist complete online learning programs or courses with homework, tutorials, videos, audio, testing, and even core text content.

Houghton Mifflin offers an online learning program called Eduspace.

Online Homework within Classroom Management Systems:

In the past, professors teaching large lecture sections in quantitative courses like math, chemistry, and accounting were constrained by the amount of homework they could assign and grade. They had only so much time, and may or may not have sufficient teaching assistants to manage the work.

With the new classroom management systems they can now freely assign comprehensive homework sets that are algorithmically based, so their students get multiple versions of any given problem and have the opportunity for lots of practice.

Before answering a homework problem in Eduspace, for example, a student may choose to see an example of a similar solved problem, get a step-by-step walk through of how to solve the problem or simply try to answer it without any additional support. The answer, when submitted, is automatically graded and the activity, when completed, is scored and recorded in the gradebook.

Note that Houghton Mifflin and other college publishers are supplying the technology that handles online homework as well as the content, which is written specifically for this tool.

Tutorials within Classroom Management Systems:

Tutorials within Eduspace provide students multiple ways of studying the concept, using text, graphics and/or audio depending on their preferred learning style.

Automated Gradebook within Classroom Management Systems:

In an automated gradebook, the professor can click on any one score and be linked to that student’s assignment to see where she had problems. In addition, the instructor can get a snapshot of how an individual student is performing at any given point during the term or quickly review how the whole class is faring, item by item, test by test. This can help guide his instruction going forward. If the majority of the class performed poorly on a given type of exercise, he may want to spend more class time covering it. Maintaining these records over time allows the instructor to show how their students’ learning compares from one class section to the next or from one semester to the next as one means of supporting the increasing demand for accountability.

Grades are totaled and averaged, based on whatever criteria the instructor sets for the exam or exercise (point values, weighted values, e.g.)

Students have access to the gradebook, as well, but only for their own personal assignments. Because of the efficiency of automatic grading, students get feedback on how they performed much quicker than when papers are manually graded…they like this!

Testing:

One of the most important pieces of the program that we provide instructors is test banks. These house thousands of questions (also giving professors the capacity to add their own), which can be chosen for a specific test, randomly generated (i.e., different students get different tests), and delivered in multiple ways (print, online). Professors see this as a tremendous advantage in reducing preparation time and the need for proctoring during exam time, because each student can get a different version of the same exam.

In a test bank like the one that accompanies our Introductory Psychology text by Doug Bernstein, we provide the instructor with over 6,000 test questions, each of which has been class tested at, in this case, the U. of Illinois by thousands of students. Not only does the instructor get the questions, but an item analysis that tells her the level of difficulty, the question type/learning level being tested and th (NOTE: This is where the original page ends)