Seth Godin is an author and a marketer who makes a bold claim in his latest blog post: higher ed is on its way to a melt down.

He lists 5 reasons why this melt-down will happen (for details on each one, see his blog post, he has some interesting arguments):

1. Most colleges are organized to give an average education to average students.

2. College has gotten expensive far faster than wages have gone up.

3. The definition of ‘best’ is under siege.

4. The correlation between a typical college degree and success is suspect.

5. Accreditation isn’t the solution, it’s the problem.

However, he didn’t list the two main reasons that I think higher-ed is on its way to a melt down – from an insider’s point of view. I believe that the things he lists, while important, are just window dressing on the big issues facing higher ed.

Morgan’s two reasons why higher ed is facing a “meltdown”:

1. Cash flow and leverage Colleges and universities are ever more reliant upon an ever shrinking pie. Legislators are cutting back, and universities are highly leveraged. I won’t name any names – but I happen to know of more than a few universities who have leveraged to the hilt in order to build up programs based on expectations of increases in federal grant funds. If you think being highly leveraged isn’t a problem, just look up the name “Enron” on Google. What happens if the US government decides to (or is forced to) exhibit some real fiscal discipline? With a US debt at 12 Trillion dollars (yes, Trillion!), there is going to be a reality check at some point, sooner or later. No university administrator that I know of is actually thinking about this or preparing for it.

Highly leveraged institutions are particularly susceptible to cash flow crunches. They’re like one of those toothpick bridges you build as a kid – start taking out just a few toothpicks, and the whole thing falls down.

I’m not trying to be chicken little here – but I would like at least a few university and college administrators to wake up to this challenge and to be proactive about it, rather than to keep operating in reactive mode until it is too late.

(aside: It reminds me of a faculty meeting we had about a year before the economic crash of 2009. We were talking about some major building renovation plans, and had 3 different optimistic scenarios – all of them assuming that the money would be there, and that the renovation would proceed in 2009. After the presentation I raised my hand and said “what if the money isn’t there, do you have a plan B?” People looked at me like I had just walked in the room after a dip in a sewage pond – and then kept talking about the rosy optimistic renovation plans. Guess what? It’s now 2010, more than a year after the renovation was supposed to begin, and it hasn’t started yet, nor is it slated to start at any specific date in the near future. The reason for the indefinite delay is the “unexpected economic crunch”. Worse, my university is now in a mad, desperate scramble for space in the wake of not having a “plan B”. How sad that this could have been spared with a bit of proactivity.)

2. The internet. If I can go online and learn quantum mechanics by watching archived videos of Richard Feynman, why should I learn quantum mechanics from the local college professor? What compelling value does the latter offer that the former doesn’t?

Colleges and universities have yet to come up with a good answer to this question. Most are focused so much on recruiting top-notch researchers, that the idea of recruiting a top-notch educator is foreign to them. Hence, the quality of teaching is usually not all that stellar. There are some bright points – I had a few stellar professors as an undergraduate, and I have a few colleagues who really work to be stellar teachers – but the system is not set up to reward that, so it is a relative rarity. (I must admit, I work to be a good teacher, but not a great teacher – because there is no reward for doing so, whereas there is reward for becoming a great researcher and grant writer).

What do the local university or college offer that you can’t get on the internet? About the only two things are:

a) name and prestige – this will not go away, but just wait until some enterprising university or college figures out how to give a “brand name” reputable degree online. Then the whole game changes.

b) hands on experience in labs and etc. This is a vital aspect of getting an education – but does this really influence the “buying” decisions of prospective students? I don’t think so. I believe that aspects like cost and prestige far outweigh considerations of hands-on experience.

Universities are slow to move. Every time an issue comes up, a committee is convened to study it. While I’m sure such committees are being convened to discuss topics like this around the globe – internet time is ticking. Internet time doesn’t wait for a committee to make a decision. It moves ahead at a blindingly fast pace, and no university committee will keep up.

People will increasingly realize that they can get an education online for a fraction of the price of attending a reputable university or college. What are universities going to do without a “plan B” for this one?

So, Seth, I agree with you that there are some big challenges on the horizon, and I’d argue that they are even bigger than the ones you mentioned. I happen to be fond of the higher education system (despite some recent frustrations with it), so this reality is saddening.

But sometimes a natural self “cleansing” of sorts is necessary in any system that develops untoward excesses – which is where we are with higher ed today. I suspect that in 10 or 20 years – after the “melt down,” higher education will be leaner, meaner, and will have figured out how to operate on internet time.

Those .edu’s who don’t get with that program will not exist. Those that do, will thrive.

2 thoughts

  1. I agree with you wholeheartedly on this issue and it is one that actually resounds around the globe. In my country , the funding of the major (public) universities come from the Government. There has been a 20% budget slash recently so most researchers are scrambling to produce results with less funding. When research output is directly related to the outlay cost, something is going to get sacrificed somewhere.

    1. It is unfortunate that education is often the first thing sacrificed when there is a budget shortfall. But, the constituency is not very outspoken about it. And, often it takes years after cutting higher ed budgets until the effects start being seen “on the outside” (less slots for students, poorly trained workers, etc). It is always easiest to cut where the pain is delayed.

      But I do think there will (maybe) be one good benefit: starving out some of the rampant bureaucracy in higher ed. The bureaucracy seems a bit overfed at my institution.

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