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.
This is the best news I've read in a month of Sundays.
Call them "Srawling Monuments to FASFA". The joke that was adult daycare for $50K per year, all at no cost up front, is what American Universities are. Zero down daycare for young adults.
End government subsidies of colleges and universities. Reallocate the funding to helping states create a world class network of two year vocational schools.
3 of my 4 kids have college degrees. The fourth is a trucker. He loves his job and is equivalent in income to two of the other three.
The other one went into aerospace engineering. His college was a small private geek school with none of the pathologies evident in the big universities.
Yes good news, but unfortunately the academic elites will not let this feeding trough go empty. I predict it won’t be long until young adults are forced to attend and pay for these indoctrination camps. They are just figuring out how to pull it off, or “sell it”.
They should keep the tier two and eliminate the ones.
“Ultimately, online ‘universities’ without ‘bricks and mortar’ expenses can and will win this battle.”
I have a question about that. How is one to confirm that the students have learned the material, and more, that they understand it well enough to apply it in the real world?
I have taken some correspondence-type courses, in the military and the private sector, and it seemed like it would be impossible to fail whether one learned anything or not.
It always felt to me like taking an “open-book test” with unlimited time.
The universe and the world is ever changing. Look at some
of the catastrophes involving Earth. Thus as time goes on
adaption becomes necessary for the future.
Planet Earth has went thru a lot and will in the future.
Beings will adapt or become extinct. Those that adapt
will set the ever changing course of history. JMO
The trades are going to be in heavy demand in the near future.
If I was young, I’d definitely pursue trade school, instead of my worthless, hugely expensive, college degree.
many colleges are likely to suffer to the point of eventual extinction
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Could be the only thing that saves us.
Colleges today train our young to hate America and embrace communism.
I hope the disaster extends to college athletics particularly football where institutional reputation is a function of wins on the field. College football is a scandal, corrupt and completely unnecessary as an adjunct to higher education. Witness the situation currently being revealed at Texas A&M and other notable state universities.
Me too.
1977 U of AZ College of Nursing Grad. Worked my way through starting at Micky D’s followed by Nursing Assistant at night. The leftist indoctrination was very strong in Nursing and required undergrad requirements. I managed to work 20 to 30 hours a week, graduated at the top of my class of 200+, and was selected Student Nurse of the Year in the state (All schools including ASU, NAU and numerous community college programs). Not bragging, it wasn’t that hard to fool the ELITE.
Now you are a plumber or electrician that has a solid reputation and can run your own business. The college degree is just fluff for the local bankers and country club membership board.
Hopefully your other two will learn in time, and find what they want.(if they haven’t already)
Let the college-age kids learn a trade and be of some use to society.
“Hey Mom And Dad, I’ve decided to go to NYU for a degree in philosophy!”
That is very interesting Jimmy. Can you tell your mother and me how understanding Kant’s Theory of Space will help you find a job other than at the car wash.
Just when you get tempted to be down good news like this pops up.
I agree with the author.
A large number of the universities that will fail were already on life support.
As insurance ruined the health care system, loans have ruined the higher education system.
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