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Has the College Death Spiral Started? Mounting financial pressure because enrollment is steadily declining
Powerline Blog ^ | 08/12/2020 | Steven Hayward

Posted on 08/12/2020 7:57:27 PM PDT by SeekAndFind

I’ve been tempted to tweak my liberal friends with the mischievous thought that COVID-19 is actually a Trump five-dimensional chess plot to destroy universities, unionized K-12 public education, and Hollywood (since TV and movie production is largely shut down too).

Colleges and universities were already facing mounting financial pressure because enrollment is steadily declining and certain to get much worse in the coming decade (the result of falling birthrates back at the time of the housing crash in 2008-09). Add to this the financial hit they are taking right now because of the virus, on top of the huge loss this year of foreign students who typically pay full tuition rates and subsidize other students, and a large number of colleges and universities face a serious risk of insolvency. (There are many colleges for whom a large foreign student enrollment—especially Chinese students—is a key part of their business model.)

This week it is reported that 20 percent of Harvard freshmen are deferring a year; at other colleges, the rate of students saying they aren’t returning runs as high as 40 percent. At places further down the food chain than Harvard, how many students will decide not to go to college at all a year from now?

Now add today’s news that major college football isn’t going to happen, and you have the making of a death spiral for many colleges. Even schools that aren’t football powerhouses like Ohio State are going to take a huge hit from this, as football even at second-tier universities is still a money maker.

Ticket sales and TV revenues are one thing; football, and to a lesser extent basketball, are huge magnets for alumni donations, and if there’s no football, there’s no fancy skybox game day parties for college presidents to schmooze donors. And since huge football revenues cross-subsidize all the other sports, look for the sports portfolios of many colleges to collapse. Some schools, like Stanford, have already cut a large number of sports.

This could happen very fast. I expect by spring many colleges will be downsizing fast, and some will fold up. Will they cut administrative bloat and the politicized departments of gender studies? More likely, if there is a Biden Administration, a bailout of higher education will be a line-item in an “infrastructure” bill, which Democrats will call “investment” in education.


TOPICS: Business/Economy; Education; Society
KEYWORDS: college; deathspiral; decline; universities
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1 posted on 08/12/2020 7:57:27 PM PDT by SeekAndFind
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To: SeekAndFind

Universities are a huge waste of money now, especially in the non-technical disciplines.

Better start viewing the world through an entirely different prism.

It’s evolving at warp speed.


2 posted on 08/12/2020 8:01:21 PM PDT by BrexitBen
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To: BrexitBen

RE: Universities are a huge waste of money now, especially in the non-technical disciplines.

Many Antifa members were educated at our universities.


3 posted on 08/12/2020 8:03:05 PM PDT by SeekAndFind
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To: SeekAndFind

Peak Brick and Mortar Higher Edumacation.


4 posted on 08/12/2020 8:09:08 PM PDT by Paladin2
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To: SeekAndFind
Maybe all those lofty professors can learn how to code.

Or drive a sanitation truck.

5 posted on 08/12/2020 8:11:28 PM PDT by Newbomb Turk
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To: SeekAndFind
"Even schools that aren’t football powerhouses like Ohio State are going to take a huge hit from this, as football even at second-tier universities is still a money maker. "

Oh, How I hate, Ohio State [it's a know nothing Party School] is NOT a Foosball PH?

6 posted on 08/12/2020 8:11:46 PM PDT by Paladin2
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To: Paladin2

Comma placement [or lack thereof] can make a Yuge difference in understanding to meaning of English.

Just sayin’...


7 posted on 08/12/2020 8:15:08 PM PDT by Paladin2
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To: BrexitBen

[[[Universities are a huge waste of money now, especially in the non-technical disciplines.]]]

Have an acquaintance that blew through almost 300K for her daughter’s 4 year degree at Syracuse. I forgot what the degree (studies) was in but I remember saying to myself that it was a bullsh** degree. Nothing in the professions or engineering/technical for sure.

Nothing is worth that kind of money otherwise. Going to graduate school now. They’ll be into it for half a mil by the time its done with. Unbelievable.


8 posted on 08/12/2020 8:17:15 PM PDT by headstamp 2 (There's a stairway to heaven, but there's also a highway to hell.)
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To: SeekAndFind

Defund these Marxist education camps.


9 posted on 08/12/2020 8:18:45 PM PDT by Levy78
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To: SeekAndFind

Even a third tier University like Ole Miss will feel like the pinch from no college football this year


10 posted on 08/12/2020 8:20:20 PM PDT by MuttTheHoople (What if the Lord sent COVID-19 to immunize the world from something more deadly?)
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To: SeekAndFind

It’s a 5-dimensional move alright, but not by President Trump.


11 posted on 08/12/2020 8:27:05 PM PDT by philippa
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To: SeekAndFind

It’s been said before, and bears repeating, that the colleges and universities are business entities, which need to balance their budgets.

Even state supported colleges are discrete business entities, which will likely see less state aid, and thus have trouble balancing their budgets.


12 posted on 08/12/2020 8:28:52 PM PDT by Dilbert San Diego
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To: SeekAndFind

It’s true. And as manufacturing returns we’re going to need a lot more technically trained people. Not just engineers but material scientists, quality assurance, technicians, maintenance, and yes, even bean counters!

But not many gender studiers or English majors. Sorry, Garrison Keillor...


13 posted on 08/12/2020 8:29:24 PM PDT by bigbob (Trust Trump. Trust the Plan)
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To: SeekAndFind
For decades colleges and universities have been increasing tuition on an annual basis several times the rate of increase of the CPI. The students’response has been to sell themselves into slavery taking down student loans to cover the cost. When they “graduate” they find it next to impossible to get jobs now they have been indoctrinated with liberal studies about the evils of capitalism and the capitalists who inevitably end up as the providers of the jobs they need to pay off the loans.. For their next lesson they will discover that liberal arts just aren’t worth it.
14 posted on 08/12/2020 8:31:00 PM PDT by immadashell (Save Innocent Lives - ban gun free zones)
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To: MuttTheHoople

Mutt, you wouldn’t be a supporter of that university in Starkville, Mississippi, now would you ?

Just takin’ a wild guess.....


15 posted on 08/12/2020 8:31:58 PM PDT by BrexitBen
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To: SeekAndFind

The true economic fundamentals of college are not sustainable. Costs soar but productivity never increases.
Warren Buffett said something like, when hard times hit you soon realize what companies have been swimming naked. Same goes for Universities now.


16 posted on 08/12/2020 8:34:42 PM PDT by cornfedcowboy
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To: SeekAndFind

Yes, the death spiral has started. Not for Harvard. Not for Princeton. They will survive but they will lose half their endowment. Most of the other private colleges will close.


17 posted on 08/12/2020 8:34:58 PM PDT by ladyjane
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To: SeekAndFind
Even schools that aren’t football powerhouses like Ohio State

Um, Steven - you need to get out of the house more. THE Ohio State is one of premier football colleges in the country.

18 posted on 08/12/2020 8:35:20 PM PDT by Extremely Extreme Extremist (Trust the plan of the 17th letter of the English alphabet!)
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To: BrexitBen

Ole Miss is transitioning from a Plantation school to a Marxist indoctrination center.


19 posted on 08/12/2020 8:35:23 PM PDT by MuttTheHoople (What if the Lord sent COVID-19 to immunize the world from something more deadly?)
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To: headstamp 2

Don’t forget. Every good indoctrination center ( aka university ) has to have multiple layers of needless bureaucracy, such as “ diversity “ czars.

Flush that money right down the commode.


20 posted on 08/12/2020 8:35:25 PM PDT by BrexitBen
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