What Can Higher Ed Learn from the Finance Industry to Restore Trust?

Trust is a currency that cannot be undervalued. Yet, recent years have seen a concerning erosion of trust in private institutions across the United States. 

Recent social intelligence research by Campus Sonar analyzed more than 13,000 mentions on social media, forums and blogs. The study revealed that perceptions of college not being “worth it” were influenced by factors such as tuition costs, student loans, debt and financial aid. This perception was particularly strong when individuals felt their degree didn’t lead to meaningful opportunities post-graduation.

Rising tuition costs, as well as perceptions of inadequate transparency and accountability, have left many students and the general public questioning the value proposition of a college education. 

Yet the industry is not alone. 

Less than 15 years ago, the finance industry faced similar challenges following the 2008 recession that threatened to destabilize the industry. Finance faced significant challenges to its reputation due to various scandals, regulatory failures and instances of misconduct. 

However, through concerted efforts focused on regulation, transparency, accountability and customer-centric practices, financial institutions managed to regain the trust of their clients and the public. So how did they do it?

Transparency on Costs and Realistic Outcomes

Transparency is a fundamental principle in rebuilding trust. Since the 2008 crisis, financial institutions have implemented measures to provide clear and comprehensible information to their customers regarding products, services, fees and risks. The industry now prioritizes transparent disclosures on mortgages and ensures customers understand the terms and conditions associated with financial transactions. 

Similarly, private higher ed institutions can build trust by providing transparent and upfront information about tuition costs, financial aid options and outcomes data. 

By leaning into transparency and openness, institutions have the potential not only to build credibility and trust among prospective students and their families but also to differentiate themselves.

Accountable Brands Build Trust 

Accountability is another aspect of trust with which the finance industry has grappled since the recession. Establishing robust governance structures, compliance frameworks and internal controls ensured adherence to ethical standards and regulations where previously customers were left hung out to dry. This has resulted in increased accountability and a significant focus on proactively addressing issues and resolving customer concerns. 

Likewise, higher ed institutions can strengthen accountability by implementing mechanisms to address student grievances and academic integrity, as well as uphold ethical standards in similar ways. This move would demonstrate a commitment to accountability and responsible conduct that instills confidence and promotes trust in their brands.

Authentic Focus on Needs

Customer-centric practices are commonplace in most commercial industries, yet many private institutions struggle to adopt student-centric approaches to student success, engagement and satisfaction. 

By comparison, financial institutions prioritize the needs and interests of their customers, offering tailored solutions, personalized advice and responsive customer service. They invest in technology and digital platforms to enhance the customer experience and streamline processes to retain customers and find new ones.

Private institutions have the potential to offer similar personalized support services, academic advising and career development programs to meet the diverse needs of their student bodies. If institutions were to prioritize the student experience and place students at the center of their operations, institutions could unlock and build lasting relationships to earn the trust of their alumni and the public.

A Path to Restoring Trust in Higher Education

It’s easy to dismiss the finance industry as incomparable to higher education. Yet, the facts remain that trust can be restored in proven business and research practices commonplace in other industries. 

If higher ed institutions, especially private colleges, are to make progress in rebuilding trust, prioritizing transparency, accountability and customer-centric practices should be central to their strategies. 

The path to restoring trust in institutions and the sector is challenging, and it will require a collective concerted effort from institutions and government leaders to listen to the needs of the American people and acknowledge it is time for a new direction.