Although I have my misgivings about the direction higher education is headed these days, I have to wonder about the prediction being made by Mauldine Economics writer, Jared Dilliard, in his dramatic lookahead piece It Was a Good Run. For example, consider his opening attention-grabber [my bold emphasis]:
I predict that 20 percent of colleges and universities will shut down or merge in the next 10 years, and probably more.
It was a good run.
That grabbed my attention. There were 4,298 degree-granting postsecondary institutions in the US as of the 2017-2018 school year, according to the National Center for Education Statistics. If Dilliard is correct, in the "probably more" sense, that means that possibly a thousand schools will go under in this decade. A scenario like that merits consideration.
"Who is this guy?" I wondered. Being somewhat chronically skeptical myself, I was amused by the slogan at the top of Dilliard's bio page: "I try to be cynical, but it is hard to keep up." That could partially explain his dark outlook for the future of college. But he has his rational reasons. Here are a few that may offer some perspective:
Most people fail to understand that higher education is in itself countercyclical. When the economy is bad, and people lose jobs, many of them will go back to school … You might not have heard that total enrollment has been declining for the last eight years as the economy has improved. What comes next will pulverize nearly every institution of higher learning in the country, private and public.
The reason: demographics. Basically, an echo of the baby bust of the early seventies … Enrollment will drop 15% on average, on top of the eight-year correction that schools have already experienced. This may not seem like much, but finances at colleges and universities have deteriorated sharply, and many of them will not even be able to withstand a drop of a few percent ...
These Colleges Have Shuttered
One doesn't have to look far for examples of colleges that have already closed, some for the exact reasons Dilliard cites. Inside Higher Education has a list that "includes private, nonprofit colleges that have closed from 2016 to the present. The list does not include colleges that have merged with or into other institutions." Here it is:
St. Catharine College (Kentucky)
Trinity Lutheran College
Memphis College of Art
Saint Joseph's College (Indiana) (suspended operations, but technically did not close)
St. Gregory's University
Atlantic Union College
Concordia College (Alabama)
Mount Ida College
College of New Rochelle
Green Mountain College
Oregon College of Art and Craft
Southern Vermont College
And, of course, Dilliard addresses my favorite soapbox topic of choice: student loan debt:
… you probably know that college is expensive. It is expensive because it is implicitly subsidized by the federal government, which will lend any amount of money to any student without regard for willingness or ability to repay ...
… Today, 45% fewer 18- to 29-year-olds say going to college is "very important" than in 2013. A 45% drop in just seven years … Higher education has become so expensive that … [n]ot even a Wall Street job is going to be any help in paying off $200,000 to $300,000 in debt.
As a sidebar, refresh your awareness on this frightening reality with: Millennials Are More Than A Trillion Dollars In Debt, And Most Of Them Don't Even Own A Home. Dilliard continues:
So we have fewer students going to college and fewer students wanting to go to college.
… New academic buildings, new athletic facilities, new residence halls with swimming pools, climbing walls, and recreation facilities. Lots of administration and diversity staff … When the cuts come, they won't come for the administration or the diversity staff. Academic programs will be the first to go, which raises some interesting questions about what the purpose of a university is …
I've not cited Dilliard's argument about college sports -- mainly football -- which, he contends, are a drain on college resources. I know, don't mention this to any Crimson Tide or Nittany Lion alumni, but Dilliard isn't talking about NCAA Division I Top 10 teams' schools.
What About Recruiting and Enrollment?
… Some schools are … trying to recruit folks outside the rapidly shrinking pool of high school seniors… millions … who have "some college" … are potential customers, depending on how much debt they have left over from the last time around. Schools will also be recruiting foreign students heavily. But it won't be enough to plug the gap. Smaller liberal arts colleges are already closing or [merging]with larger schools to stay afloat. [See the list above.] But state schools will suffer too, and many of them will require explicit taxpayer assistance, which will be politically distasteful to say the least …
I see a lot of articles about "prepping for Doomsday." When I was a youngster, my parents always encouraged me to "save for a rainy day." Dilliard definitely thinks there is a monsoon of Doomsday proportions heading toward the higher education community and he's not at all encouraged by the level of prepping there.
… My suspicion is that universities … have done pretty much zero to prepare for the coming bust. Many schools have lots of debt, not much cash, and a lot of fixed costs … operating under the assumption that the Department of Education continues … to lend money as it has been in the past …
… Colleges and universities employ a lot of people and in many cases are the lifeblood of a single town. You've probably noticed that the nicest buildings in your town are the academic buildings. Wait until they are all empty.
Other than that, Mrs. Lincoln, how did you enjoy the play? Dilliard paints an ominous fresco of the future. I'm concerned, too, but not at the 20 percent-failure-rate level he proffers. If you've followed the main themes of my posts over the past dozen years or so, however, you can't miss my concerns about the detrimental effect of loan debt on young people and the "Is college right for everyone?" conundrum. Dilliard enhances my concerns with his take on specific consequences.
Is this the future of college? I'll let you know ten years from now.