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https://www.nakedcapitalism.com/2020...versities.html“Decimate” might be too charitable a forecast for American higher educational ins utions, since the word originated with the Roman army practice of killing one man in ten. Coronavirus is hitting pretty much all of the bad aspects of their business models at once.
Let’s list them:
Dependence on/preference for foreign students, often not for their accomplishments but for their ability to pay full and even premium fees. Chinese students accounted for one-third of the total. Their enrollment was already falling as of 2019.
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But Chinese students’ contribution to revenues is out of proportion to their numbers. From the New York Times in March:
Universities in English-speaking countries, especially Britain, Australia and the United States, have grown increasingly dependent on tuition from Chinese students, a business model that the virus could dismantle.Foreign students were dismayed by the way US schools shut down abruptly and gave little to no help in helping get them back home.
With qualifying exams postponed, travel bans spreading and anger rising among Chinese students and parents at the West’s permissive at ude toward public health, enrollment could plummet in the coming years, experts said, potentially leaving countries with multibillion- dollar holes in their universities’ budgets.
Skyrocketing prices leading more students to question college or emphasize “practical” degrees. As with mortgages, access to debt has led to higher prices. And with student debt terms so draconian, more and more students are trading down: going to cheaper schools or focusing on programs that teach harder skills that hopefully translate into market value.
Bloated adminispheres and gold plated facilities. MBA parasites have colonized universities, with the justification often that they increase fundraising. For what purpose? To pay themselves better, and to create naming opportunities for donors with new buildings, and to justify high charges via plush dormitories. Apparently swanky gyms are common.
All those expensive buildings have become an albatross.
Now consider the impact of coronavirus.
Litigation over terminating on-campus instruction. This is probably the least of their worries. Plaintiffs are seeking refunds for the degradation of the educational product. The schools argue quite explicitly that they are not in the business of educating but of conferring credentials, and it is they alone that determine what is adequate for them to hand out a degree. There is precedent supporting the universities’ arguments, albeit with less bad facts than these.
Low likelihood of resuming classes on campus this fall. My colleagues with contacts among university administrators say no one has any idea how to make dorms safe if coronavirus is still on the loose. This has many negative implications.
Why should students and/or their parents be willing to pay full prices for a degraded product? They won’t get interaction with instructors. For science and engineering classes, they won’t get lab work. They won’t get to make connections and meet potential mates. They won’t get tips from other students on career and summer job strategies. They won’t get to participate in extracurricular activities, which is a low-stakes way to learn to work with other people. They won’t learn how to grow up in a somewhat protected environment.
There is the very real possibility that employers will downgrade the value of degrees conferred during the plague years.
It’s hard to see how colleges and universities escape cutting tuition, save perhaps the most elite. I can’t see any schools besides the most elite can maintain their charges without seeing a big falloff in enrollment. And with them administering classes remotely, the cost of delivery has fallen. And that’s before seeing students postponing or abandoning degrees due to the horrible state of the economy.
And what happens to university budgets due to the loss of room and board income?
