By Timothy D. Naegele[1]
As I wrote almost twelve years ago about the Danish author Hans Christian Andersen’s magnificent work:
In the fable “The Emperor’s New Clothes,” two make-believe weavers purport to spin a fine suit of clothes for the emperor, which is made of beautiful material that possesses the wonderful quality of being invisible to any man who is unfit for his office or unpardonably stupid. The potentate and his subjects acknowledge that the garments are very fine indeed. That is, until one little child sees the emperor marching in a procession, and says at last: “But he has nothing on at all” — and the grand swindle is exposed for all to see.[2]
The grand swindle of a college education is being exposed for all to see too, as a result of the deadly Coronavirus pandemic that China unleashed on the world—which will not run its course until the end of 2021, at the earliest.[3]
As I wrote nine years ago in an article entitled “Are Colleges Dinosaurs?”:
The exorbitant costs associated with college educations have been rising for a long time now
America’s Middle Class is being priced out of colleges for their kids; and many parents are questioning whether college is worth it, and whether they can afford it. This is true to an even greater extent when it comes to graduate schools, such as law schools. As more and more Americans face economic problems during the balance of this decade, which will be true of their counterparts abroad as well, many will find that undergraduate college educations and graduate schools are luxuries that they cannot afford. Many families will be doing whatever they can just to survive. . . .
Certainly in the case of State-supported schools, where budgetary pressures are dictating that their expenditures be slashed, the twin pincers of parents who cannot afford to send their kids to these schools, and declining budgets, may break the backs of such schools.
Another old friend of mine, who covered Washington for many years as a talented and insightful political and economic reporter and editor, told me recently that colleges are effectively dinosaurs and relics of the past, like newspapers and newsweeklies in this Internet age. The educational institutions of the future will be online—or so my friend believes—which cost a fraction of what “bricks-and-mortar” educational institutions cost today. The kids now are computer literate like no generation of the past; and the idea of learning online is second nature to them.
Why spend money on college tuitions and campus living expenses, and professors’ salaries and the infrastructure of college campuses, when everything can be done online for a fraction of the cost? Why have professors repeating essentially the same lectures year after year, when such lectures can be taped once and shown again and again on YouTube? Why not eliminate “redundancy” and have the best professors teaching students online nationwide, and eliminate the costs of multiple professors? Why allow “teaching assistants” (or “TAs”) to educate our kids, when the professors are paid to do this? Why not eliminate colleges and graduates schools in wholesale numbers—just like libraries and book stores are closing or becoming “bookless” because everything is online?
The bottom line with respect to whether education shifts to the Internet might not be a function of conscious decisions by educators or parents: pure economics in America and globally will determine the results. Falling governmental tax revenues will dictate drastic cuts like never before; and declining personal incomes and home values and foreclosures, and other family sacrifices, will result in changes to personal life styles that will affect the way educational programs are perceived and delivered worldwide. [4]
What was not mentioned in the article itself, but was discussed in comments beneath it, is the fact that student loans have kept the colleges, universities and graduate schools alive financially, all the while saddling the students and/or their parents with massive student debts that must be serviced and cannot be discharged in bankruptcy.
As if to echo what I wrote, the UK’s Economist has an article entitled “The absent student,” which states:
In the normal run of things, late summer sees airports in the emerging world fill with nervous 18-year-olds, jetting off to begin a new life in the rich world’s universities. The annual trek of more than 5m students is a triumph of globalisation. Students see the world; universities get a fresh batch of high-paying customers. Yet with flights grounded and borders closed, this migration is about to become the pandemic’s latest victim.
For students, covid-19 is making life difficult. Many must choose between inconveniently timed seminars streamed into their parents’ living rooms and inconveniently deferring their studies until life is more normal. For universities, it is disastrous. They will not only lose huge chunks of revenue from foreign students but, because campus life spreads infection, they will have to transform the way they operate. . . .
Yet the disaster may have an upside. For many years government subsidies and booming demand have allowed universities to resist changes that could benefit both students and society. They may not be able to do so for much longer.
Higher education has been thriving. Since 1995, as the notion spread from the rich world to the emerging one that a degree from a good institution was essential, the number of young people enrolling in higher education rose from 16% of the relevant age group to 38%. The results have been visible on swanky campuses throughout the Anglosphere, whose better universities have been the principal beneficiaries of the emerging world’s aspirations.
Yet troubles are piling up. China has been a source of high-paying foreign students for Western universities, but relations between the West and China are souring. Students with ties to the army are to be banned from America.
Governments have been turning against universities, too. In an age when politics divides along educational lines, universities struggle to persuade some politicians of their merit. President Donald Trump attacks them for “Radical Left Indoctrination, not Education”. Some 59% of Republican voters have a negative view of colleges; just 18% of Democrats do. In Britain universities’ noisy opposition to Brexit has not helped. Given that the state pays for between a quarter and a half of tertiary education in America, Australia and Britain, through student loans and grants, the government’s enthusiasm matters.
Scepticism among politicians is not born only of spite. Governments invest in higher education to boost productivity by increasing human capital. But even as universities have boomed, productivity growth in the rich-country economies has fallen. Many politicians suspect that universities are not teaching the right subjects, and are producing more graduates than labour markets need. Small wonder that the state is beginning to pull back. In America government spending on universities has been flat in recent years; in Australia, even as the price of humanities degrees doubles, so it will fall for subjects the government deems good for growth.
There are questions about the benefits to students, too. The graduate premium is healthy enough, on average, for a degree to be financially worthwhile, but not for everybody. In Britain the Institute for Fiscal Studies (IFS) has calculated that a fifth of graduates would be better off if they had never gone to university. In America four in ten students still do not graduate six years after starting their degree—and, for those who do, the wage premium is shrinking. Across the world as a whole, student enrolment continues to grow, but in America it declined by 8% in 2010-18.
Then came covid-19. Although recessions tend to boost demand for higher education, as poor job prospects spur people to seek qualifications, revenues may nevertheless fall. Government rules will combine with student nerves to keep numbers down. Last month the Trump administration said new foreign students would not be allowed to enter the country if their classes had moved online. Sydney, Melbourne, UNSW and Monash, four of Australia’s leading universities, rely on foreign students for a third of their income. The IFS expects losses at English universities to amount to over a quarter of one year’s revenues.
The damage from covid-19 means that, in the short term at least, universities will be more dependent on governments than ever. The IFS reckons that 13 universities in Britain risk going bust. Governments ought to help colleges, but should favour institutions that provide good teaching and research or benefit their community. Those that satisfy none of those criteria should be allowed to go to the wall.
Those that survive must learn from the pandemic. Until now most of them, especially the ones at the top of the market, have resisted putting undergraduate courses online. That is not because remote teaching is necessarily bad—a third of graduate students were studying fully online last year—but because a three- or four-year degree on campus was universities’ and students’ idea of what an undergraduate education should look like. Demand for the services of universities was so intense that they had no need to change.
Now change is being forced upon them. The College Crisis Initiative at Davidson College says that less than a quarter of American universities are likely to teach mostly or wholly in person next term. If that persists, it will reduce the demand. Many students buy the university experience not just to boost their earning capacity, but also to get away from their parents, make friends and find partners. But it should also cut costs, by giving students the option of living at home while studying.
Back to the mortarboard
Covid-19 is catalysing innovation, too. The Big Ten Academic Alliance, a group of midwestern universities, is offering many of its 600,000 students the opportunity to take online courses at other universities in the group. There is huge scope for using digital technology to improve education. Poor in-person lectures could be replaced by online ones from the best in the world, freeing up time for the small-group teaching which students value most.
Universities are rightly proud of their centuries-old traditions, but their ancient pedigrees have too often been used as an excuse for resisting change. If covid-19 shakes them out of their complacency, some good may yet come from this disaster.[5]
Amen to all of this. The only caveats that I have about effectively “gutting” colleges is that many students fool around with their online classes, and do not take them seriously; and hence, they run the risk of learning little or nothing. And missing from a totally-online education is the social interaction that a college campus and environment provide. Lastly, at least in America, college sports provide much-needed relief from the pressures of everyday life, which have increased dramatically—and beyond all reckoning—because of the Coronavirus.
© 2020, Timothy D. Naegele
[1] Timothy D. Naegele was counsel to the United States Senate’s Committee on Banking, Housing, and Urban Affairs, and chief of staff to Presidential Medal of Freedom and Congressional Gold Medal recipient and former U.S. Senator Edward W. Brooke (R-Mass). He and his firm, Timothy D. Naegele & Associates, specialize in Banking and Financial Institutions Law, Internet Law, Litigation and other matters (see www.naegele.com and Timothy D. Naegele Resume-20-6-30). He has an undergraduate degree in economics from the University of California, Los Angeles (UCLA), as well as two law degrees from the School of Law (Boalt Hall), University of California, Berkeley, and from Georgetown University. He served as a Captain in the U.S. Army, assigned to the Defense Intelligence Agency at the Pentagon, where he received the Joint Service Commendation Medal (see, e.g., https://en.wikipedia.org/wiki/Commendation_Medal#Joint_Service). Mr. Naegele is an Independent politically; and he is listed in Who’s Who in America, Who’s Who in American Law, and Who’s Who in Finance and Business. He has written extensively over the years (see, e.g., www.naegele.com/whats_new.html#articles and https://naegeleblog.wordpress.com/articles/), and can be contacted directly at tdnaegele.associates@gmail.com
[2] See Timothy D. Naegele, Viewpoint: Greenspan’s Fingerprints All Over Enduring Mess, American Banker, October 17, 2008 (http://www.naegele.com/documents/GreenspansFingerprints.pdf); see also https://en.wikipedia.org/wiki/The_Emperor%27s_New_Clothes (“The Emperor’s New Clothes”)
[3] See Timothy D. Naegele, The Coronavirus and Similar Global Issues: How to Address Them, 137 BANKING L. J. 285 (June 2020) (Naegele June 2020) (Timothy D. Naegele) [NOTE: To download The Banking Law Journal article, please click on the link to the left of this note]; see also https://naegeleblog.wordpress.com/2020/08/04/chinas-goal-is-global-domination-and-it-must-suffer-the-soviet-unions-fate/ (“China’s Goal Is Global Domination, And It Must Suffer The Soviet Union’s Fate”)
[4] See https://naegeleblog.wordpress.com/2011/07/29/are-colleges-dinosaurs/ (“Are Colleges Dinosaurs?”) (footnotes omitted)
[5] See https://www.economist.com/leaders/2020/08/08/covid-19-will-be-painful-for-universities-but-also-bring-change (“The absent student”); see also https://www.economist.com/briefing/2020/08/08/covid-19-could-push-some-universities-over-the-brink (“Uncanny University”—”Covid-19 could push some universities over the brink”—”Higher education was in trouble even before the pandemic”—”Covid-19 has put immense pressure on all universities. But the problems are about to get particularly severe for those in America, Australia, Canada and Britain that have come to rely on international students to fill their coffers. . . . Even before the pandemic, many such universities worried about worsening relations with China, the biggest source of international students. . . . Academics, used to tricky questions, now face an existential one: how will universities survive with many fewer students in them? The problem is that campuses make an excellent breeding ground for the virus, and students travelling across the world are a good way to spread it. A study by researchers at Cornell found that, although the average student at the university shares classes with just 4% of their peers, they share a class with someone who shares a class with 87%. The potential for the rapid spread of the disease was shown by the arrival of recruits at Fort Benning, an American army base. When 640 arrived in spring, just four tested positive. A few weeks later, more than a hundred did. According to the New York Times, some 6,600 covid-19 cases can be linked to American colleges. . . . The risk is that, beyond the lecture hall, youngsters will ignore many restrictions. In July the University of California, Berkeley reported an outbreak involving 47 covid-19 cases, with most traced to parties in the fraternities and sororities. At the time, administrators urged students to keep gatherings to below 12 people, to hold them outside, to stay at least six feet apart and to cover their faces; they have since announced that all classes will be online and only 3,200 of the university’s 40,000 students will be allowed to live on campus. . . . In America an estimated one postgraduate in three was studying fully online last year, up from one in five in 2012. . . . [I]n America, New York University is home to the most international students with 19,605; in Britain, University College London is, with 19,635. The experience of either city—with all the possibilities of exploration and romance which urban life brings, even under semi-lockdown—cannot be replicated through video calls in a parental living room. . . . [E]ntry restrictions currently prevent students from getting to lots of countries. Since February all Chinese visitors have been banned from entering Australia. Pilot programmes to fly in groups of a few hundred students were abandoned when the local case count rose. Currently Canada will not let in students who did not get a visa before March. Some Indian students are allowed into America, but Chinese ones are not. Both would be welcome in Britain, so long as they quarantined for a fortnight. . . . If the pandemic drags on, if a vaccine is not forthcoming or if the economic climate becomes particularly bad, then things will get bleaker still. Politicians will have bigger things to think about than protecting universities. The first two decades of the 21st century were ones of extraordinary growth for universities in many countries. That golden age is over”)
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