The Gathering Storm in Higher-ed
In February of this year, the older of my two kids turned eight years old.
And as I think ahead and begin to imagine what the summer before her senior year of high school will look like, I have a hard time seeing us touring the archetypal brick and ivy covered college campuses, thumbing through catalogs of majors, and plopping down $60,000 per year in tuition so she can select a major that may well decide the course of her life thereafter.
Which, by the way, statistically speaking, has a rather poor chance of going well anyways.
Because while Covid-19 has been (justifiably) blamed for accelerating the demise of college as we’ve known it, the truth is that there have been swirling waters and gathering storm clouds for some time now.
Now I’m not really in the bold predictions businesses, but I am very much in the business of surveying the wind patterns and helping the organizations that I’m part of decide whether they should tack or jibe.
And when I look up and read the sails in the higher-ed space, here’s what I see…
The economics are (very) bad and getting (much) worse.
Since 1980 the cost of college has risen nearly 170%, while earnings for workers between the ages of 22 and 27 have increased by just 19%.
And this insane divergence between tuition and wages, combined with a system that just straight-up incentivizes rising tuition costs, has put us in a position where nearly 44 million Americans now owe a combined $1.7 TRILLION in student debt — which is projected to balloon to nearly $3 trillion within the next 15 years.
It’s now taking people an average of 20 years to pay off student debt with an average monthly payment nearing $500, all while accruing tens of thousands of dollars in interest payments on top of the principal.
Never mind the predatory lending practices that have seeped into the student loan space post-housing-crisis, because of course they did.
Or the fact that even if you were a victim of these predatory lending practices, but somehow managed to do the right thing and pay your loan bills, you are actually disqualified from any relief — because of course you are.
Or the gap between what college students think they will make when they graduate ($103,000) versus the reality of what they are actually likely to make ($55,000).
Taken all together, it’s hard to make the argument these days that a traditional four-year college degree makes economic sense for most people.
The perceived value of a traditional four-year degree is shifting
Similar to how Hemmingway described the process in which one goes bankrupt, it’d seem the traditional four-year college degree may come undone in much the same way over the next X years: gradually, then suddenly.
If you’ve not bothered to (or had to) think much about it, going right from high school into a four-year college may seem like the obvious thing to do. In fact, the overwhelming majority of the nearly 3.5mm graduating high-school seniors in the US each year are oriented precisely in that direction.
But as a general experiment, I’d encourage you to ask anyone over the age of 45 why someone should bother getting a traditional four-year college degree.
If you do, you will almost certainly get one of three answers:
- It proves you can set out to do something and stick with it!
- College gives you time to mature and learn more about yourself and what you want to do and be in life.
- College graduates earn X% more on average than non-graduates over the course of their lifetime.
Number one is fairly ridiculous on its face, and if that’s the best argument you can make for a traditional four-year college degree, then we can probably just stop this conversation here.
The second point is quite reasonable, but there are far better ways to accomplish this, which I will get into momentarily.
And while the third point is technically true today by most accounts, these numbers tend to get skewed because the jobs with traditionally high salaries (doctors, lawyers, engineers, STEM-based industries, etc.) typically require a specialized degree. Once you get into the categories that cover a broader swath of the workforce, it would seem that the lifetime earnings gap begins to narrow between those who hold four-year college degrees and those who do not.
In general, the future value (actual and perceived) of a traditional four-year college degree seems like it will come down to three big questions:
- To what extent will most employers continue to require a traditional four-year college degree for new hires?
- To what extent will increased lifetime earnings and four-year college degrees continue to be linked?
- To what extent will traditional four-year college degree holders see real tangible value beyond the above (cultural signaling, network opportunities, etc.)?
As a personal aside, I can tell you that I’ve managed and hired hundreds of staff (including many entry-level roles), and I can’t tell you where 99% of them went to college or what they majored in.
I’m actually hiring for an entry-level role right now, and I hardly glance at the college credentials on the resumes I see each day.
And as a factual aside, I can point to an increasing number of blue-chip organizations removing the college degree requirements for roles where that credential has been historically required.
In general, the simple trend I see here is just a rapidly widening disconnect between what the modern working world actually requires (and desires) and what these traditional four-year institutions are producing in terms of new entrants to the workforce.
Yes, these kids have the paper credential. Yes, they proved they could commit to something and stick to it! But in many cases, these kids are coming out of a four-year college experience with crushing debt, a bunch of gen-ed credits, and a complete lack of the relevant skills required for the modern working world.
What most organizations truly need today are growth-minded individuals with the confidence, adaptability, and global perspective required to navigate a rapidly changing world.
Not 16th graders with a Business Administration degree and a tenuous grasp of freshman chemistry and medieval history.
The kids are not ok
According to a recent survey of 33,000 American college students done by a Boston University professor, nearly half screened positive for depression and/or anxiety.
Another survey of 2,000 students at 100 colleges conducted this spring found that “one in five students had struggled with suicidal ideation during college.”
Even the CDC has cited “concerning trends” with respect to student mental health, calling this issue a “growing problem” and noting that “more than 1 in 3 high school students had experienced persistent feelings of sadness or hopelessness in 2019, a 40 percent increase since 2009.”
And does any of this come as a surprise?
If you are of college-age in 2022, it means that you were born in the wake of 9/11 and may well have seen your home and family turned upside down by a global financial meltdown around age 7 or 8. You have known nothing but endless war your whole life, seen school shootings on the news every other day, and now find yourself walking across the stage at your high-school graduation in the middle of a global pandemic that has absolutely upended life as we know it.
You are about to exit childhood and enter into the next phase of your life, having never known the relative peace, prosperity, and normalcy that your parents (at least kind of) did.
And so it makes perfect sense that these kids are rightfully skeptical and predictably rebelling against the status quo — hardened by crisis after crisis and now staring down the barrel of a system that seems like just another trap waiting to snag them.
Or worse, they are genuinely spiraling and suffering and on the edge of real collapse in clinically diagnosable ways.
And all of this is to say nothing of the immense cultural and societal pressures that support the entire college and university industrial complex, all of which are just the icing atop of this hellish cake.
More classes, more extra-curriculars, more clubs, better grades, work harder, apply to more colleges, I’m falling behind, must get ahead, no rest…
The kids are simply not ok.
The system is rigged, and this generation knows it
Now let’s say you’ve made it. You ran the gauntlet of modern youth and came out relatively unscathed, ready to head into college. Here’s the world you're looking at.
For starters, 2022 is shaping up to be the tightest college acceptance season on record, with Ivy League schools rejecting more than 95% of applicants and many state colleges and universities in California rejecting nearly 85% of those who apply.
In part, these rates have tightened due to many schools dropping (or making optional) their entrance exam requirements, which then inflates the denominator in these calculations as many more prospective students flood into admissions offices.
But it’s also an open secret that lower acceptance rates are one of many easy ways for a college or university to signal exclusivity and boost its ranking. And since everyone in the rankings business is feeding off of one another and expected to work within the honor system, guess what happens? People cheat and lie and submit false data and try and game the system on the regular.
So let’s not pretend, even for a moment, that the removal of entrance exams was a noble attempt from colleges and universities to expand their reach and be more inclusive. It’s all self-serving and below-board.
Take, for example, the completely disgusting practice where some colleges and universities will purposefully market to students that they have no intention of accepting, enticing them to apply, knowing that they will reject their applications, just so the college or university can deflate its acceptance rates.
Truly craven stuff.
But of course, if your parents are of a certain socio-economic status, you can just work around this pesky system. Simply photoshop your kid’s head onto some stock photos of water polo players, slip some cash to a middle man, and you’re good to go.
You might get caught, but you probably won’t.
In general, distrust in institutions is at an all-time high. The very pillars of society — government, monetary systems, healthcare, media, police, corporations, information, and truth — are all in various states of distress and tumult like never before.
And what we’ve known to be “traditional” post-high school education is now merely the latest crumbling brick in a falling wall.
It’s quite possible that at 44 years old, I may well be part of the last generation for whom this old system kind of worked out.
But now, these kids are skeptical that it will work for them, and rightfully so.
And so we’re seeing this messy friction that happens any time we are on the edge of a seismic cultural shift. Where one generation is gate-keeping and fighting to sustain a system in which the next generation no longer believes.
For the colleges and universities (and the systems that support them), it is adapt or die time in many ways. Fighting this increasingly stiff headwind will only prolong the inevitable, it seems. And will they adapt? Some will, most won’t. Because as the Sinclair quote goes: “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”
The real world is moving faster than the world of education
I cringe a bit every time I read the phrase “the great resignation.”
To me, this lazy shorthand completely oversimplifies and overlooks what seems to be a real and significant cultural shift in how the American people are beginning to think about work and happiness.
Calling this “the great resignation” just comes off as completely tone-deaf corporate-speak and sounds a lot like your crusty old uncle yelling about how “the kids don’t want to work anymore!”
When in actuality, what’s happening is that COVID has laid bare the absurdity of the world as we’ve known it with abrupt and stunning vividness.
These last 2+ years have thrust people into a space where they are pondering questions — both basic and existential — about how they want to spend their one “wild and precious life.”
Why does work have to happen in an office?
Why does it have to happen from 9 pm to 5 pm five days per week?
What am I racing towards, and who am I racing against?
What does work/life balance really look like?
What is it that matters in life?
What is it that will truly make me happy?
What’s happening is not just a “great resignation.” What’s happening is a great disruption. One in which many Americans (particularly of younger generations) are deeply reevaluating what matters to them.
After two years of a life-altering pandemic, it’s not just Sam who’s rethinking his goals. Americans are reevaluating their priorities when it comes to work and how it impacts their overall satisfaction. Nearly two-thirds of Americans said their idea of a happy life shifted during the pandemic, according to a new survey by The Harris Poll of more than 2,000 U.S. adults. The shift among younger workers was even more dramatic: 74% of millennials and 68% of Gen Z are reassessing their lives and goals. (source)
And to the extent that you’ve generally accepted the traditional four-year college degree as a vital piece of the past, you must now accept that as the status quo is questioned and broader cultural narratives are rewritten, so too will their component pieces.
You must be able to accept that this great disruption is causing a wholesale rethinking of modern systems, from which traditional education is in no way immune.
And the thing about questioning the status quo, is that once you start asking questions, it’s hard to stop.
As another simple thought experiment, ask yourself (or anyone else) these questions about college:
- Why is college four years?
- Why do I have to take all of these irrelevant classes?
- Why is it so expensive?
- Why do I have to do it in person?
- Why do I have to start college immediately after ending high school?
Like you, I can spin some answers to all of the above that sound vaguely convincing, but I don’t actually believe any of them. And increasingly, neither does this generation.
This is a generation that was raised on the internet. Everything is digital, everything is connected, everything is immediate and customizable and available and accessible in ways that even my generation could never have imagined.
It’s cliche to say that kids these days have the entirety of the world’s knowledge and information in their pockets, but it’s true. We live in a moment where the world has never been more full of opportunity, possibility, and potential for those who question the way things have always been done.
So it’s no wonder they are asking why learning at this age is still confined to the four walls of a classroom, laid out over four years, starting precisely one summer after high school ends, and delivered at crushing expense.
It’s no wonder they are asking why they should follow this ragged and dusty path that has begun to feel almost comically and quaintly out of step with a completely different reality that is staring them right in the face every day.
Back in late 1999, I recall sitting in a classroom at the Massachusetts College of Communications just outside of Boston in one of my “Internet Communications” classes.
I remember staring out the window, literally looking at the buildings next door and seeing people my age working at these early dot com startups, pioneers in this wild new space.
And I had this epiphany that would ultimately propel me out of that school and into the world, as I realized that the opportunity at that moment was out there and not in my classroom.
Because the pace of the world at that time was so rapid and turbulent, that by the time the professor began teaching us about a certain concept or technology, there was a high likelihood that it had all already become obsolete.
It was a unique point in time where the traditional education system just could not keep up with the pace of the real world, which was literally changing materially every day. And damn if it doesn’t feel a hell of a lot like that again right now.
So what now, then? Some thoughts…
In the short term, I think we will continue to see the crumbly middle of the college landscape slowly crater, with most of the interest dispersing to the poles of the market (cheap public institutions and super-premium elite institutions).
Overall, enrollment numbers will likely continue a bumpy and slow descent for some time, perhaps leveling off at some point.
Or who knows, perhaps the descent will accelerate — either naturally or due to some other unforeseen world-changing event — and the bottom will fall out more quickly. Disruption is a funny thing. One day it seems like a speck on the horizon, and the next day it’s smashing into your broadside, and you’re taking on water faster than you’re able to bail it out.
I think we will continue to see a rapid rise in what I’d call “modern trades”, where the focus is on precision learning, developing marketable skills quickly, and demonstrable and measurable ROI for students.
Of course, these types of paths have been around for some time now, but it feels like a space that will continue to accelerate — and quickly, as the market has a seemingly insatiable appetite for skill positions in digital marketing, software, green technology, and healthcare, where many entry-level roles pay well and only require specialized training that is often easy to complete and pays off very quickly.
Another trend that feels like it is on the edge of exploding, is the idea that learning is no longer constrained to a classroom, in a building, on a college campus, where a professor is lecturing to you at a fixed time on a fixed day each week.
Much like the realization that working from home is as good (or better) as working from an office, I believe that “education anywhere” (and everywhere) is an idea that will soon be enthusiastically embraced by more and more students here in America.
Yes, the “college experience” is still quite strong here culturally. But so is the lure of seeing the world, carving one’s own path, and simply having the ability to combine the best of traditional education with this newfound appreciation for asynchrony and mobility that the world and life have now afforded us all.
Why not do your readings and listen to your lectures remotely, while traveling abroad? Why not be out in the world, working on service projects, exploring new countries, interning internationally, and augmenting your college education with a hands-on, immersive, modern, global education at the same time?
Today, the study abroad experience within most colleges and universities looks like it has for many decades. During your Junior year, you pack up and head overseas, to largely replicate the same experience you have at your home college (campus, dorms, lecture halls, etc), but just in a different language and time zone.
But again, why? Why do we accept such a narrow definition of study abroad? What if we decoupled the education from the fixed locations? What if we truly embraced and leaned into the possibilities that this remote-first world is presenting to us? What might a truly multi-faceted, modern, global education look like then?
I can’t even begin to tell you how many podcast ads I’ve heard in the last five years that promise to “CUT OUT THE MIDDLE MAN”. Everything from mattresses and steaks, to razors and glasses, are now coming to you “direct to consumer”.
So many poor middlemen out of jobs.
But what would “DTC Education” look like? Or better yet, what does it look like already?
A couple of years ago, I took a Mini Marketing MBA class online, which cost me about $2,000 USD.
The course was mostly pre-recorded lectures and readings, with some light (but useful) community bits thrown in here and there. I’m obviously not privy to the P&L for this particular business, but I can’t imagine the overhead is very high. There are marketing and administrative expenses I’m sure, and there is the tech that delivers the content, but overall, it seems (to me) like a rather lightweight operation.
Back in June of 2019, the professor who runs the course posted this video, which claims that — as of then — 3,900 marketers had taken this course since its inception in 2016.
For simplicity’s sake, let’s just say that the business has stayed totally flat at 1,300 students per year since 2016 (all paying $2,000). That’d mean this course has pulled in a bit over $15,000,000 in revenue since it began.
Now I’m no economist here, but this seems like a pretty perfect market.
You’ve got loads of people like me, who want to upskill or add relevant and practical educational training to their toolboxes, and you’ve got a rockstar professor to can probably make 25x his salary while doing 1/10th the work that he may do teaching a full course load at a proper university.
So you have to ask yourself, that as the delivery systems continue to improve, why wouldn't every rockstar professor at every major college and university, consider going direct to consumer with their courses?
Another small trend I see emerging is big companies investing more and more into in-house educational programs.
And again, this is not a new concept. Corporate universities have been around for decades, including McDonald’s “Hamburger University” which has been giving out degrees in “Hamburgerology” since 1961.
Disney has also run an internal training and internship program called “The Disney College Program” since the early ’80s, and more recently in the late 2000s, Apple established its own highly secretive Apple University.
As the hiring market tightens, and companies are looking for new ways to lure in and retain staff, there seems to be a real opportunity for larger organizations to build and offer robust internal training and skill development programs for entry-level roles that look more like in-house trade schools than your standard corporate onboarding.
What might the modern white-collar version of the old-school apprenticeships we see in the trades, look like? Hybrid internship/training programs in sales, marketing, finance, or management, where young people are fast-tracked into organizations in a manner that benefits all sides, seem like a no-brainer.
And lastly, something I am hoping to see come true more than anything is the idea that ultimately, education wants to be free.
The idea that anyone must save for a lifetime and/or go into crippling debt in order to get a college education in America is simply criminal.
And yes we can fight over whether or not college loan debt should be forgiven, argue about plans for free community college, and lament how difficult it is to actually change the incumbent system.
But at the end of the day, there is literally no reason, in 2022, that we should be accepting the status quo.
Merely starting with the basic premise that our entire educational system is really made up of two very fungible things: the way we choose to deliver education and the way we choose to value it once it's been delivered, is the first step to setting us all free.
Today, we have chosen to lock education away. We have chosen to gate-keep, to limit access, to construct and protect and perpetuate an entire class system based simply on how we deliver and value education in America.
But it doesn’t have to be that way.
In fact, I’d argue that right now, today, I can easily create the equivalent of a real MBA by stringing together free content and classes online, plus maybe an inexpensive paid tutor/mentor and be just as well off as someone who gets a “proper MBA” from Harvard or Brown for $200,000.
All we have to do is agree to value that open-sourced education, much of it exactly the same as I’d get inside those four brick and ivy colored walls at Harvard or Brown, fairly.
If only it were that easy.
In closing
To me, the question isn’t if this current system will be turned upside down — the question is when? And will it be a series of jabs, or will it be one big knockout blow?
COVID-19 dealt about as hard and sudden a punch as possible to this system, and the core of college as we know it, while wobbly, is still standing for now.
But it’s hard to look at the conditions in the space and in the world, and see much in the way of stability in higher-ed today.
So again, while I am not in the business of bold predictions, I would likely bet short on things hanging on as they are a bit longer, and bet long on the system being totally unrecognizable by the time my kids are entering this phase of their lives.
