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Higher Ed 2.0: Scott Galloway’s Reassessment of the Pandemic’s Impact

Higher Ed 2.0: Scott Galloway’s Reassessment of the Pandemic’s Impact

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As I mentioned in a previous post, the May 1 due date for college acceptance decisions seems to have coincided with several notable predications about the impact of the pandemic on changes in higher ed. Earlier this week, I commented on the Adam Weinberg opinion piece in Higher Ed Dive as well as the Brandon Busteed article in Forbes.

Concomitant with the other pieces, Professor Scott Galloway’s weekly blog post, “Higher Ed 2.0 (What We Got Right/Wrong),” reviewed his prediction from last year that the pandemic would change higher ed forever in a number of ways.

Professor Galloway’s sardonic sense of humor expresses itself when he comments that as we emerge from the peak of the pandemic, American colleges look like the rest of America; “specifically, the fifth installment of the Hunger Games franchise, wherein our society engages in the idolatry of economic winners, everyone else hopes to survive, and many meet a gruesome end.”

The explanation of the comparison of Higher Ed 2.0 to the fifth installment of The Hunger Games is based on the following:

  • The most selective colleges and universities received 17 percent more applications for the fall of 2021 than last year and the elite of the elite saw even greater increases. According to Professor Galloway, “The rich are getting richer.”
  • The explanation for the increases in applications include record numbers from poor students and students of color, resulting in the most diverse cohort of admitted students in history for the top schools.
  • Widening the lens, the trend is less encouraging. In a country where 3.5 million students graduated from high school last year, the Harvard freshman class of 1,700 is immaterial. The Ivy League colleges and universities have an aggregate endowment of $140 billion and share their wealth with just 17,000 freshmen each year.

A year ago, Professor Galloway predicted that elite schools would leverage their brands and partner with technology platforms to radically expand their class sizes. He admits that he was wrong and blames it on the leadership and alumni of elite universities who enjoy the “tremendous psychic reward from the Hermes-ification of their institution, versus any remaining claim of public service.”

Professor Galloway was not the only person calling for expansion of enrollment at the elite institutions. I blogged about several of these, arguing that the business model of elite colleges and universities isn’t built to add many students and that we should focus on the institutions that educate many more students than the elite institutions.

Professor Galloway predicted that there would be a culling of universities, and he published a list of those universities that would close based on a self-developed predictive model. I reviewed and critiqued his list and his methodology. He writes that so far, there has not been a surge in college closures.

Professor Galloway notes that the costs of operating during the pandemic as well as the decline in applications at non-elite colleges and universities indicate continued financial weaknesses in the sector. He adds a quote about the two ways you go bankrupt from Hemingway’s The Sun Also Rises, “Gradually, then suddenly.” Clearly, he believes there are more closures coming.

A year ago, Professor Galloway predicted changes in higher ed would occur on the supply side with elite institutions educating more students, reducing enrollments at the non-elite schools. He changed his mind and writes that the real impact to higher ed enrollments will occur on the demand side; specifically, that more employers are considering dropping the requirement that students have a college degree.

Similar to Brandon Busteed’s recent article, Professor Galloway cites technology companies like Apple, Google, and Amazon that have hired graduates from certificate programs without requiring them to have a college degree.

However, Professor Galloway goes further than Mr. Busteed by stating that non-elite higher education institutions are being unbundled, piece by piece, just like the newspapers were. He writes that there are a handful of elite newspapers that are thriving while 2,000 newspapers have folded since 2004. The unbundling of higher education could be just as bloody for colleges and universities.

Lastly, Professor Galloway writes that the U.S. needs to find ways to invest in its people who are non-college-bound and create on-ramps into jobs without requiring a $200,000 college degree. The innovation economy means people will need new skills throughout their lives. If corporations look to entities other than colleges to provide those skills as well as ongoing upskilling, he believes Americans will benefit.

The last point in Professor Galloway’s blog is complicated. Most U.S. colleges do not charge $200,000 for a college degree. In fact, our community colleges are the least expensive and also offer many components of unbundled education similar to the certificate examples.

Given President Biden’s campaign promise to offer a free community college education to all as well as the many initiatives underway by states (read Inside Higher Ed for a summary of the recent initiative in the state of Michigan), this movement alone has the potential to substantially disrupt enrollment at non-elite four-year colleges, particularly the smaller, non-elite private colleges. It could potentially disrupt enrollment at public four-year universities, but without details of a final plan, that disruption is less certain.

As I think about Professor Galloway’s observations complemented by those of Adam Weinberg and Brandon Busteed, I think about his comparison of the unbundling of the four-year college degree with the unbundling of the newspaper industry. The comparison should be frightening for anyone affiliated with a non-elite four-year college or university. Even more frightening is that his quote from The Sun Also Rises aptly describes what happened to the newspaper industry and what may likely happen to many four-year colleges who refuse to acknowledge changes are necessary until it’s too late.

Higher ed 2.0 will be much more different than the pre-pandemic version 1.0. The only item up for debate may be whether it occurs gradually or suddenly.

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Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President and Chief Financial Officer in 2002. In September 2019, Dr. Boston retired as CEO of APEI and retired as APUS President in August 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. For four years from 2009 through 2012, APEI was ranked in Forbes' Top 10 list of America's Best Small Public Companies. During his tenure as president, APUS grew to over 85,000 students, 200 degree and certificate programs, and approximately 100,000 alumni. While serving as APEI CEO and APUS President, Dr. Boston was a board member of APEI, APUS, Hondros College of Nursing, and Fidelis, Inc. Dr. Boston continues to serve as a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA), a member of the Board of Overseers of the University of Pennsylvania’s Graduate School of Education, and as a member of the board of New Horizons Worldwide. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus. In August 2020, the Board of Trustees of APUS appointed him Trustee Emeritus. In November 2020, the Board of Trustees announced that the APUS School of Business would be renamed the Dr. Wallace E Boston School of Business in recognition of Dr. Boston's service to the university. Dr. Boston lives with his family in Austin, Texas.

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