Tuesday, June 25, 2013

A Market Opportunity for a College with Vision

This piece presupposes you read my last post on Why Colleges Are Doomed. If you don't have time, in it I outline why the typical liberal arts college has a business model that's about to get disrupted upside the head, and few, if any, see what's coming.

The case I made was one that projects less demand and far more supply, but I also suggested that most colleges just aren't getting the job done anymore. Come, drink beer, get a diploma. But worse, universities generally have adopted poisonous philosophies of political correctness. This hasn't caught up to them because of all multi-decade forces that have supported the higher ed model in general (again, see last post). But it will.

Let's be blunt. Universities, particularly in the Northeast, have lost their collective minds. They have allowed their curricula to be polluted with useless, angry, ideological majors such as Women's Studies, Afro-American Studies...pretty much any major that ends in the word "studies." At formerly great institutions like Bowdoin you can study important matters such as "Queer Gardens." Thirty-two  courses like that and they hand you a diploma.

And then...what? Since there's no place in the private sector anymore for people with useless majors, many "studies" grads get recycled right back into academia and become professors, teaching their bile to another generation who, just in case they didn't know they were supposed to be angry with "the system," will be now. Anger on anger, with none of the participants adding anything to society or the economy.

A great deal for 60k a year, no?

Then there's the pitiful record colleges have on free speech, which is to say they're all for it unless it's speech they don't approve of, which is to say anything conservative. Conservatives getting shouted down during campus appearances is a near weekly occurrence. University administrators routinely do nothing, further encouraging campus Maoists.

Graduation speakers? Conservatives need not apply.

I could go on (and on), but I won't, because any informed person reading this already knows about the overwhelming bias in academia. If not, spend five minutes with Google.

So, given the impending apocalypse of the higher education model, it might be time for one or two enlightened colleges to do something radical to ensure their survival, no?

To wit, I have a modest proposal: brand yourself as "conservative." Toss out every half-assed, ideologically-based major. Gladly accept the resignations of the scores of outraged professors. Establish a core curriculum with an emphasis on the Western canon. Require a course on constitutional history. Embrace the study of all cultures but not the notion that all are equally wonderful. Some of them suck.

Don't let anyone graduate without some grounding in math, hard sciences, and at least one foreign language.

Require econ majors to learn Von Hayek and Friedman. Ban Keynes and Krugman? No, that's not what this is about. This is about balance, about understanding both sides of an argument, and then learning how to reason them through on your own. That's what conservatives do. Colleges today are more about indoctrination.

Protect free speech for all, but only for those who express it with civility. Students can embrace the tenets of "Occupy," whatever those are, but they can't occupy the damn quad if it's against the rules.

Ironically, I'm describing how virtually every college in America used to be, circa anytime before around 1968, so one might brand this as "traditional," rather than conservative. But I'm not sure it describes any well-known colleges today.

So, back to the opportunity. Americans very consistently, over time, describe themselves as conservative. The percentage has remained about 40% for a very long time. This doubles the number who describe themselves as "liberal," and this is also very consistent.

Now, of the population of parents who actually foot the tuition bills, how do you suppose those percentages fall out? I'd say it was a safe assumption that north of 50% are conservative.

What if they had just one brand name option that pursued the course I described above? What if just a single college, say a Trinity or a Middlebury, embraced this very different path?

Well, here's what I think would happen. Applications would skyrocket, as would alumni giving. Their national profile would be raised. Maybe, just maybe, it will be enough to thrive through what's to come.

Oh, there would be a very brief and difficult transition, and the New York Times would weigh in disapprovingly, but it would work. You have to think of this in business terms. College is a market, driven by supply and demand. Right now, there is plenty of liberal supply and zero conservative supply, and yet we know there are more conservatives out there than liberals. Real life businesses rarely find market imbalances that are so cut and dry.

Will anyone try this? It would require an incredibly ballsy president, not to mention an iron-willed and board, one that could withstanding the collective howl of the liberal establishment. So, no, in other words.

They will go down with the ship.

Monday, June 24, 2013

Why Colleges Are Doomed

Know what a run-of-the-mill liberal arts college charges these days? About $60,000 a year. This number has been rising faster than just about anything else over the last couple of decades. Why? Basically, growing demand and fixed supply. Fixed supply is understandable; universities don't just pop into existence to meet growing demand, but this is about to change. Demand growth is also about to change, but first let's see what's been driving it until now:
  • Demographics - the echo boom has been applying to college in droves.
  • Internationalization - applicants from newly wealthy countries like Korea.
  • Availability of cheap student loans.
On top of this abundance, university endowments had a great, multi-decade run through 2008. It's been a very good time to be a university president. The wind has been at their backs for a long time. When this happens in the business world, though, it invariably breeds a lot of lazy and inefficient practices that get exposed when the weather changes, and it is about to change drastically indeed for the higher ed business model. Many won't survive.

Growing endowments? Gone. Demographics? Now on a declining curve. Cheap student loans? With a federal government that's essentially broke, this game won't last either (I'm not even mentioning all the government grants here). And unless our colleges want to fill their dorms entirely with the children of Russian oligarchs and Chinese billionaires, the internationalization game has largely been played out.

But it's worse than that, because the supply part of the equation is about to change too. Ever hear of Kahn Academy? Coursera? How about iTunes U? These are all free, online options that offer best practices education, many taught by some of our finest educators. In other words, you don't have to go to college to learn anymore. Knowledge has been liberated from ivy tower oligopoly.

The undergraduate model, in particular, is highly threatened because, frankly, most schools just don't do a very good job anymore. They are four year summer camps for kids who got trophies for showing up. Now, they get degrees for showing up. Gone are most course requirements and core curricula, in their place, useless exercises in things like race and gender studies. Studies show that the amount of homework the average college kid does has been cut in half over the last couple of decades.

So, what are colleges left with to justify their existence? Two things, as best I can tell. First, they remain desirable "brands," at least some. Google and Goldman Sachs still buy the brands, not the self-taught. But this will change, and probably sooner than we think. How? A Google or an Apple will discover that they can find good employees who have excelled at, say, Coursera, where one is graded. It will get a lot of publicity, and this will cause parents to start questioning why they are mortgaging their houses to pay for tuition when they can get it done for free.

Second, there is socialization. You make friends in college, and these friends are a lifelong asset, in both an emotional and practical sense. This advantage may be the last one on to which colleges hang. I suspect, though, society will find a solution for this. Perhaps some college somewhere will toss all its expensive, tenured, professors and throw its doors open for students to pursue collaborative learning experiences. There will be ways to meet people and make friends that don't cost 60k a year.

All this is going to go down very hard. Any institution that has thrived under a successful model for generations doesn't just sit down and reinvent itself overnight, particularly if the new model requires destroying the old one. Well, actually, some businesses do. IBM, Amazon, and Netflix come to mind, but these are extraordinary companies with courage and vision. There are far more Eastman Kodaks and Blockbuster Videos out there.

And, let's face it, universities are not run like businesses. In fact, they think it's beneath them. Does anyone think that there are frank discussions going on at the board level about any of this? The small, expensive, liberal arts colleges will get hit first and hardest. I would not want to be in charge of Bates or Ohio Wesleyan right now.

On top of all this, there is the crazy ideological direction that most schools have pursued, making them even less tenable. But in this, there is an opportunity. I will address that in my next post.