Admissions

Are Colleges at Risk of Closing?

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Wondering which colleges may not survive for long? Just ask Scott Galloway. Who?

As one of his critics describes him, Galloway is "a marketing professor at NYU. As such, he is incredibly highly paid and influential. He has 266K Twitter followers, best-selling books and a lively racket posting his blogs to Business Insider ... In his latest blog/column he talks about how important it is for very fancy universities to brand themselves (perhaps they could hire Scott Galloway, professor and columnist, as a consultant!) and cut costs." High praise, indeed, sarcasm aside.


I'd like to comment about that July 17 Galloway blog/column. I'll also include an observation or two from Galloway's esteemed critic quoted above. My point is that I happen to agree with Galloway's contention, as alluded to in my title, that some colleges are heading for extinction, due in part to the ongoing COVID-19 pandemic.

Galloway's analysis is strongly quantitative, mildly subjective, rational, and convincing, despite the critical assaults (more on that later). Members of College Confidential's forum have discussed his warnings and expressed their own issues with some of his deductions. See for yourself, starting with post 11,199 on this huge thread. He reinforces his statements with numerous links to supporting data, which can slow down his readers a bit. However, if students need a fine example of how to mount logical arguments, look no further than Prof. Galloway.

If you've followed my posts over the past half year, you've no doubt noted my trumpeting of a similar but less sophisticated theme that echoes Galloway: A significant number of American colleges are in jeopardy of failing due to the pandemic. This reality doesn't take any special knowledge to see. The evidence is available to anyone willing to process the news about what has been happening in the realm of higher education over the past several years. And then came COVID-19.

Could Pandemic Worsen Existing Issues?

So what is Scott Galloway saying in his sobering column? One metaphorical paragraph sets the stage:

Think about this: Next month, as currently envisioned, 2,800+ cruise ships retrofitted with white boards and a younger cohort will set sail in the midst of a raging pandemic. The density and socialization on these cruise ships could render college towns across America the next virus hot spots

In case you missed the metaphor, he's talking about colleges that are welcoming their students back to campus for in-person classes — business as usual, with safety guidelines in place. This prompts his accusatory question: "Why are administrators putting the lives of faculty, staff, students and our broader populace at risk?" The answer comes from Business Insider's introduction:

  • He says that universities planning to reopen for in-person classes in the fall are swept up in a "tsunami of denial" about the dangers of the pandemic because they're so dependent on student tuition to stay up and running.

Ah, the old bottom line. Speaking of bottom lines, though, that Galloway critic I referenced is David M. Perry, a journalist, historian and senior academic adviser in the history department of the University of Minnesota. Perry's bottom line is that he has issues with some of the numbers Galloway uses to substantiate the case for doomed cruise-ship colleges, specifically this one that Galloway cites: "... The average salary of a professor with a PhD (before benefits and admin support costs) is $141,476, though some make much more, and roughly 50 percent of full-time faculty have tenure …"

Perry claims the salary figure Galloway references is false, and accuses him of misreading the data from his source. He quotes the author of Galloway's source: "More than 1,000 institutions representing 378,865 full-time faculty members responded to the AAUP's Faculty Compensation Survey, from which the new report is derived. The average full professor salary this year was $104,820 …" Perry's callout of this error is especially pointed and implies that there may be more than numerical inaccuracy going on.

Bard, Dickinson Among Galloway's "Perish" Predictions

Galloway's rationale for making his ominous predictions are, in my view, well thought out. He put together an analysis of 436 colleges and universities, gathering hard numbers from various data sets. He then placed the 436 into one of his four "Value vs. Vulnerability" quadrants, labeled Thrive, Survive, Struggle and Perish. Here's a baker's dozen of the 89 schools that fall into the "Perish" category, according to Galloway's calculus:

  • Bard College
  • Dickinson College
  • UMass Boston
  • Sarah Lawrence College
  • University of Hartford
  • Eckerd College
  • Simmons University
  • University of Indianapolis
  • Florida Tech
  • Gannon University
  • University of New England
  • Maryville University
  • Robert Morris University

Some of these names are shocking. Galloway identifies 131 schools that, in his view, should "struggle," 128 that should "survive" and 88 that should "thrive." Check his post for specific names from each category.

Here are the characteristics of those 436 schools that placed them into one of Galloway's four quadrants:

  • Thrive: The elite schools and those that offer strong value have an opportunity to emerge stronger as they consolidate the market, double down on exclusivity, and/or embrace big and small tech to increase the value via a decrease in cost per student.
  • Survive: Schools that will see demand destruction and lower revenue, but will be fine, as they have the brand equity, credential-to-cost ratio, and/or endowments to weather the storm.
  • Struggle: Tier-2 schools with one or more comorbidities, such as high admit rates (anemic waiting lists), high tuition, or scant endowments.
  • Perish: Sodium pentathol cocktail of high admit rates, high tuition, low endowments, dependence on international students, and weak brand equity.

I don't see any of those 89 "perishable" schools being out of business by this time next year, maybe not even two years from now. My instinct is that many, if not most, of this group are currently either "surviving" or "struggling" and it will take more than one admission cycle plus quick cultural change (increasing vocational school enrollment) and acute pandemic consequences to see any perish. A college's collapse doesn't happen overnight, at least not before symptoms of failure become painfully apparent.

Galloway's "pandemic panacea" for colleges:

University leadership across America should immediately announce fall classes will be all online, no in-person classesSchools will have to undertake what firms ranging from Nike and Condé Nast to Wells Fargo and Walgreens have done — cut costs and prices. Most important, colleges should not waste this crisis and should demand their organizations become facile with big and small tech to dramatically increase enrollments while lowering costs

University leadership and faculty aim to help young people find their greatness. Part of that charge is to instill grit, perspective, a sense of curiosity/innovation, citizenship, and a comity of man. We should lead by example.

Obviously, all this is just one person's opinion. I'm not a marketing professor and my math skills are problematic at best, but I agree with Galloway, in general. I've proffered my predictions of higher education's woes in previous articles. Market forces are powerful, especially when supercharged by unanticipated left-field pandemic curveballs. They can wreak havoc on corporations and colleges that are currently hanging by a thread or two, in peril of being clipped by COVID-19.

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