Eight Reasons Why Over 50% of Colleges will Fail by 2030
So what happens when the legacy power of an institution meets a rapidly changing business environment driven by emerging technology? Some will survive but many will not.
For this reason I’ve decided to focus in on eight core issues for colleges that will drive a wedge between business-as-usual and the unstoppable forces of change.
- Overhead costs too high – Even if the buildings are paid for and all money-losing athletic programs are dropped, the costs associated with maintaining a college campus are very high. Everything from utilities, to insurance, to phone systems, to security, to maintenance and repair are all expenses that online courses do not have. Some of the less visible expenses involve the bonds and financing instruments used to cover new construction, campus projects, and revenue inconsistencies. The cost of money itself will be a huge factor.
- Substandard classes and teachers – Many of the exact same classes are taught in thousands of classroom simultaneously every semester. The law of averages tells us that 49.9% of these will be below average. Yet any college that is able to electronically pipe in a top 1% teacher will suddenly have a better class than 99% of all other colleges.
- Increasingly visible rating systems – Online rating systems will begin to torpedo tens of thousands of classes and teachers over the coming years. Bad ratings of one teacher and one class will directly affect the overall rating of the institution.
- Inconvenience of time and place – Yes, classrooms help focus our attention and the world runs on deadlines. But our willingness to flex schedules to meet someone else’s time and place requirements is shrinking. Especially when we have a more convenient option.
- Pricing competition – Students today have many options for taking free courses without credits vs. expensive classes with credits and very little in between. That, however, is about to change. Colleges focused primarily on course delivery will be facing an increasingly price sensitive consumer base.
- Credentialing system competition – Much like a doctor’s ability to write prescriptions, a college’s ability to grant credits has given them an unusual competitive advantage, something every startup entrepreneur is searching for. However, traditional systems for granting credits only work as long as people still have faith in the system. This “faith in the system” is about to be eroded with competing systems. Companies like Coursera, Udacity, and iTunesU are well positioned to start offering an entirely new credentialing system.
- Relationships formed in colleges will be replaced with other relationship-building systems – Social structures are changing and the value of relationships built in college, while often quite valuable, are equally often overrated. Just as a dating relationship today is far more likely to begin online, business and social relationships in the future will also happen in far different ways.
- Sudden realization that “the emperor has no clothes!” – Education, much like our money supply, is a system built on trust. We are trusting colleges to instill valuable knowledge in our students, and in doing so, create a more valuable workforce and society. But when those who find no tangible value begin to openly proclaim, “the emperor has no clothes!” colleges will find themselves in a hard-to-defend downward spiral.
Ironically, we are entering into a period where the demand for education will rise substantially. Yet traditional colleges are such a mismatch for what future consumers will want that dropping enrollments will cause many to fail.
My own expectation is that we will continue to see a separation between the “teaching” and “gatekeeping” functions of education. Students will increasingly have the option of learning from a variety of sources, and will be able to select credential options independent of where they got their information.
Online options like Udacity or Coursera.org do a great job making high-quality information accessible. Information that has been “vetted” by reputable institutions can be made available for free to anyone with an internet connection. It is now possible for working people and casual learners to engage and even to learn at their own pace. The downside: the same easy accessibility and flexibility makes it impossible for these companies to succeed at the gatekeeper role, and it’s hard to see how they could fix that – other than to simply not try; to focus on what they do well, and let someone else tackle the problem of how to certify and document skills.
But anything is better than a college system where students earn tens of thousands of dollars in debt, learn little, and come out unemployable. Too many students are working at jobs that don’t even pay enough to cover living expenses plus the college loan payments.
For those who desire a free education and have the motivation, the following includes the: Top 10 Sites for Information about MOOCs:
Udemy Free Courses – Udemy is an example of a site allows anyone to build or take online courses. Udemy’s site exclaims, “Our goal is to disrupt and democratize education by enabling anyone to learn from the world’s experts.” The New York Times reported that Udemy, “recently announced a new Faculty Project, in which award-winning professors from universities like Dartmouth, the University of Virginia and Northwestern offer free online courses. Its co-founder, Gagen Biyani, said the site has more than 100,000 students enrolled in its courses, including several, outside the Faculty Project, that charge fees.”
ITunesU Free Courses – Apple’s free app “gives students access to all the materials for courses in a single place. Right in the app, they can play video or audio lectures. Read books and view presentations.”
Stanford Free Courses – From Quantum Mechanics to The Future of the Internet, Stanford offers a variety of free courses. Stanford’s – Introduction to Artificial Intelligence was highly successful. According to Pontydysgu.org, “160000 students from 190 countries signed up to Stanford’s Introduction to AI” course, with 23000 reportedly completing.” Check out Stanford’s Engineering Everywhere link.
Duke Free Courses – Duke offers a variety of courses on ITunesU.
Harvard Free Courses – From Computer Science to Shakespeare, students may now get a free Harvard education. “Take a class for professional development, enrichment, and degree credit. Courses run in the fall, spring, or intensive January session. No application is required.”
Yale Free Courses – At Open Yale, the school offers “free and open access to a selection of introductory courses taught by distinguished teachers and scholars at Yale University. The aim of the project is to expand access to educational materials for all who wish to learn.”
Carnegie Mellon Free Courses – Carnegie Mellon boosts “No instructors, no credits, no charge.”