Posted on 06/27/2020 6:12:18 PM PDT by SeekAndFind
As colleges attempt to recover from the pandemic and prepare for future semesters, a New York University professor estimates that the next 5-10 years will see one to two thousand schools going out of business.
Scott Galloway, professor of marketing at the New York University Leonard N. Stern School of Business told Hari Sreenivasan on PBS’ “Amanpour and Co.” that many colleges are likely to suffer to the point of eventual extinction as a result of the coronavirus.
He sets up a selection of tier-two universities as those most likely not to walk away from the shutdown unscathed. During the pandemic, wealthy companies have not struggled to survive. Similarly, he says, “there is no luxury brand like higher education,” and the top names will emerge from coronavirus without difficulty.
“Regardless of enrollments in the fall, with endowments of $4 billion or more, Brown and NYU will be fine,” Galloway wrote in a blog post.
“However, there are hundreds, if not thousands, of universities with a sodium pentathol cocktail of big tuition and small endowments that will begin their death march this fall.”
“You’re gonna see an incredible destruction among companies that have the following factors: a tier-two brand; expensive tuition, and low endowments,” he said on “Amanpour and Co.,” because “there’s going to be demand destruction because more people are gonna take gap years, and you’re going to see increased pressure to lower costs.”
Approximating that a thousand to two thousand of the country's 4,500 universities could go out of business in the next 5-10 years, Galloway concludes, “what department stores were to retail, tier-two higher tuition universities are about to become to education and that is they are soon going to become the walking dead.”
Another critical issue underlying the financial difficulties families and universities both face is the possibility that the quality of higher education has decreased.
Galloway argues that an education in the U.S. is observably unsatisfactory for the amount that it costs, given that if you “walk into a class, it doesn’t look, smell or feel much different than it did 40 years ago, except tuition’s up 1,400 percent,” he said during an interview with Dr. Sanjay Gupta.
And the pandemic, according to Galloway, has served to expose the quality of higher education.
“Students I think across America along with their families listening in on these Zoom classes are all beginning to wonder what kind of value, or lack thereof, they’re getting for their tuition dollars,” he said.
Here's what Professor Galloway expects to happen:
In the next six weeks, after receiving deposits/tuition, more universities will begin announcing they are moving to all online courses for Fall. The scenario planning via Zoom among administrators rivals D-Day. But likely all scenarios will lead to one realization: the protocols mandated by the surge in US infections will diminish the in-class experience to the point where the delta between in-person and Zoom will be less than the delta between the risks of each approach.
Parents and students may still decide to send their kids back to campus, and make their own decisions concerning the risks they can tolerate with a hybrid experience — online learning while living on or near campus. They should/will enjoy the lawns at UVA and Royce Quad with friends — marked for distancing. But in-person classes should not take place.
Universities will face a financial crisis as parents and students recalibrate the value of the fall semester (spoiler alert: it’s a terrible deal). In addition, our cash cows (international students) may decide xenophobia, Covid-19, and H1-B visa limits aren’t worth $79,000 (estimated one-year cost of attending NYU). This has been a long time coming and, similar to many industries, we will be forced to make hard decisions. Most universities will survive, many will not. This reckoning is overdue and a reflection of how drunk universities have become on exclusivity and the Rolex-ification of campuses, forgetting we’re public servants not luxury brands.
The outspoken professors ends with another uncomfortable truth: Universities that, after siphoning $1.5 trillion in credit from young people, cannot endure a semester on reduced budgets do not deserve to survive.
they are not worried about the kids, it is the profs and other career workers that they worry about.
Wonder what all those commie teachers will do?
Thanks for your input, and I agree.
Good idea, but we will still need STEM studies to compete with the world. Not sure the STE in STEM will work without hands-on labs. Math is math, and can be done on-line.
How is your aerospace kid doing? I would think with the success of SpaceX and others like Boeing, he has a bright future. Private/corporate space exploration is the future. NASA is old news with its bureaucratic/political interference.
Just read that NASA has a plan to send a remote drone to map the surface of Mars. Musk has a plan to colonize. Currently, he is focused on paying customers to orbit and/or circle the Moon. The big money folks will make that a profitable enterprise, which means quicker development of his vision.
Yes Mom, I have a minor in Feminist Studies of the Sudan. Both will get me a job in Human Resources.
This is great news. May the vast majority go under. They are worthless indoctrination camps.
I did correspondence courses in the Navy, although thru snail mail. The time can now be limited with the internet, but the "open-book test" is problematic. Not sure of a solution for that part. Someone smarter than me may find it since on-line education is growing.
He loves his job. He works for a third party company at a NASA facility. He graduated a week after Trump announced the Space Force. Talk about good timing.
“1. Problems in real life are all an open book test with unlimited time.”
Not true in all areas of life. In the Navy, your time may be limited to a fraction of a second.
In some courses I had, the final consisted of, “You have three hours. Use all the blue books you want. Tell me everything you learned this semester and what it means.”
OTOH, I have seen my kids in high school and college looking up answers in a textbook, entering them on line, and finishing well within the time allotted. A person who had never seen the material before could pass a test like that.
I’m not surprised to hear that MIT did things right, but how well would Southern Idaho Community College do?
When I went to Navy Counselor school in the Navy in 1986, they had the same idea. There were so many manuals with so many regulations that you couldn't possibly memorize all of it. The objective of the exams/tests were that you knew certain parameters and knew WHERE to look for the correct answer. Amazing how many failed and didn't graduate.
We were simple sailors, but the intricacy of military manuals with their (art.1) (chapter 3) (sub-chapter a-h) (sub sub letter designations 1 - 30) was just the first article in that ONE manual. It was sorta like Congressional staff associates spending hours on just one piece of legislation just to figure out what other law associates meant in the writing. Think Pelosi saying, "We have to pass it to see what's in it." Nobody knew.
Except for only 1 year of algebra, I did the same. Then joined the Navy, learned leadership skills, took over a small company and retired around 50. Unless you are going into certain sciences, writing skills are most important. They will get you in the door.
I thought the author was setting up the reader metaphorically by first telling the story of the buggy whip, where the point was that it was a higher-quality buggy whip manufacturer that was still making a product nobody wanted. The natural transfer of concept to college would have been that universities are also putting out a product that there is no demand for (which I believe is true, but not like the total market collapse of outdated technologies).To the point that "a career that will not make a return on the investment made," I believe it's a three-fold issue.
The causes for #1 are also two-fold:
- The job market isn't paying the salaries.
- The students aren't pursuing the marketable degrees.
- The universities are cranking out graduates without regard to whether the job market is there for the graduates. In other words, they are graduating buggy whips.
The causes for #2 are two-fold:
- The jobs are being off-shored to lower-cost geographies.
- The cheaper workers are being imported via H-1B visas and are displacing our graduates.
The cause for #3 is two-fold:
- The students are choosing social-justice degrees with no anchoring in reality.
- The K-12 schools are socially promoting students who either aren't ready for college or are better suited to trade studies.
I understand the point that the graduates made a series of bad decisions, and the students are also making a series of bad decisions, but I believe that leaving the analysis there is over-simplifying (you said I was over-thinking). In decision analysis, there is the concept of "good decision, bad outcome," and "bad decision, good outcome."
- The students have been socially indoctrinated to believe the only way to succeed is with a college degree, so everyone must now go to college.
- The change to government-sponsored student loans has made it easy for universities to pad their enrollments in order to get the funding to sustain their tenures and research programs.
In the case of getting into the buggy whip business, I think we'd all agree that it was a case of bad decisions with bad outcomes. I don't think the college degree analogy is necessarily the same.
The cost of a college degree is artificially high due to government interference with free market availability of student loans. If there were a market balance between supply and demand then the price paid would equal the cost plus profit. If the universities were balancing the supply of graduates with the demand for graduates, this would mean that the graduates were being paid a salary that allowed them to pay off their loans plus their living expenses.
The fact is that the university degree market is completely unbalanced and out of whack. Young students may be making good decisions to pursue a degree, but many are too uninformed at that age to understand that the universities are glutting the market right now. The universities have built up a capital investment in professors and manufactured an inventory of graduates that can't be sold.
The university result will eventually be the same as the buggy whip manufacturer: their inventory of unsold graduates will lose their value (in terms of alumni donations, university brand reputation, etc.), and the university might eventually go out of business if they can't get new student enrollments because the word is out that their graduates are unemployable.
Is all of this the fault of the student loan scam? Is it the result of students making bad career decisions? Is it the fault of businesses that are looking for cheaper workers or exporting jobs? Is it the fault of universities hungry for students flush with loan cash that they keep taking them in regardless of the ability of the job market to absorb the graduates?
-PJ
Stop federal guarantees for student loans. Have the college issue the loan. If the student can't get a job that pays enough to pay the loan, then the college eats it.
Suddenly, colleges would stop offering worthless majors, and stop accepting students who can't make it.
Learn a trade, then take classes in accounting and business administration so you can better run your business when you start your own company. Courses in how to use spreadsheets, and do online marketing would also be useful.
Once you take away the requirement to follow a fixed curriculum in order to get a degree, people can take classes in what they need. This would also result in instructors who can actually teach how to write well being in higher demand than professors who use their class time to promote Marxism.
Take away the value of the piece of paper, and instead only have knowledge have value, and the ideologues will be out of jobs.
You want to really shake things up? Tell the credentialing and licensing agencies that they may not require a college degree in order to take the licensing test, and that all the material that the test covers must be made available online for free.
Pass the bar exam? You are now a lawyer, regardless of whether you got your knowledge in law school or youtube. Same with the CPA exam, and the rest.
Good for him and good job you did raising him. His opportunities are only going to expand. You must be so proud.
That's the ticket!
Especially after President Trump starts defunding them.
Wonderful ideas i have always advocated
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