As higher-education costs have grown over the years, attending colleges and universities has become an increasingly imposing prospect for more and more high-school students. Are institutions of higher learning pricing themselves into irrelevance? One consequence of the high cost of education was that university tuition revenue was expected to face a downturn in 2020.
Then came the great COVID-19 shutdown. Starting in March, colleges joined elementary, middle, and high schools in closing their doors for the remainder of the year, with an eye to a fresh start in the fall. However, reopening plans continue to evolve as regions face uncertainty controlling the pandemic. Some colleges and universities are scheduled to open fully, some have proposed hybrid plans, where students take some classes online, and others will remain entirely virtual. Whatever the camp schools fall under, they face long-term financial challenges, as do students who continue pursuing purely remote learning. While there are clear potential health consequences for the new year, the following monetary predictions are real, too.
Students Will Rethink Value
According to a Pew Research Center analysis, about 30% percent of adults under the age of 30 possess college debt. Currently, students entering college are more likely to take out loans than those in previous generations were. By early 2020, student loan debt had already reached an astounding $1.56 trillion dollars, a repayment-burden that will be exasperated by the health crisis.
High unemployment, health concerns, and financial uncertainty dominate the landscape; as a consequence, some parents and their children will either defer a start to college, find the cost prohibitive, or question the return in value for the outlay. Those that seek to continue on a planned educational path will, in many cases, have look to creative and unplanned-for means to fund the experience, including increasing borrowing and tapping into family savings.
Colleges Will Bite the Tuition Bullet
This volatile financial stew has one more ingredient. Students are growing resistant to paying traditionally high tuition and fees for what is perceived to be a reduction in educational services – where access to facilities is limited, at best, or learning is remote, at worst. The new-model honeymoon is over, as students and families have begun to hold back payments. It is not only that they miss out on the social and group-learning dynamics that are part of the on-campus experience, but they may face limited food services, new housing shortages, laboratory restrictions, or entertainment and exercise area closures.
Colleges will have to reduce tuition and fees to keep up enrollment. Just as faculty members have been charged to re-imagine teaching under remote models, administrators moving forward will need to provide value-added services under budgetary constraints. Schools of higher education have to work toward providing educational opportunities and outcomes at previous-levels while finding creative ways to maintain operations and facilities standards for any on-campus learning; most importantly, implementations must be made safely, even as guidelines evolve.
Schools Must Find Resources or Whither
It is not as if Universities and Colleges have raised tuition over time in order to pad the administrators’ coffers. Many schools have instituted plans to refund portions of fees and tuition payments from the preceding year. However, they will not be able to continue to do so. Schools that hold large endowments should be able to more than survive. Smaller schools, regional institutions, and state universities may have to either streamline services or shut down. Faculty and support staff may be laid off, and those furloughed may not be brought back.
In the coming years, schools that continue to thrive must be creative about and open to all avenues of funding, just as students will have to enlist new financial resources, and schools will have to employ programmatic outside-the-box thinking. For example, they may have to look to philanthropic visionaries such as venture capitalist Mark Stevens, who understand and value education as a critical resource, even as tuition and government funding dry up; and they may have to rely on each other, sharing resources when it becomes safe to do so.
Schools Will Do the Right Thing
Higher education has always been about bettering the individual. When financial reality hits, however, that idealism breaks down. There is little of value in graduating a social worker who owns enormous college debt that will take a lifetime to pay off – and who has to leave the field as a result. Now, the COVID-19 pandemic means colleges have a moral obligation to ensure students can be better off sooner rather than later after leaving school. Life in the foreseeable future will be extraordinarily challenging for a significant portion of society. Colleges will have to step back and revisit their values to make certain they
This time could prove an opportunity for schools. If they can find approaches to providing topflight education at reduced costs, they will prove a lifeline to struggling students, while keeping themselves financially afoot.
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