Is the Collegiate Death Spiral Coming Soon?
Our nation's colleges and universities are long overdue for a fiscal reckoning.
For those of us on the Right, it’s about time. Our colleges and universities have for years grown unchecked by free-market principles, fully enabled by a corrupt deal between spiraling tuition costs and endless government subsidies. And all this while serving as leftist indoctrination camps for our children.
It’s a noxious bubble that can’t burst soon enough.
“Colleges and universities were already facing mounting financial pressure,” writes columnist, scholar, and university professor Steven Hayward, “because enrollment is steadily declining and certain to get much worse in the coming decade (the result of falling birthrates back at the time of the housing crash in 2008-09). Add to this the financial hit they are taking right now because of the virus, on top of the huge loss this year of foreign students who typically pay full tuition rates and subsidize other students, and a large number of colleges and universities face a serious risk of insolvency.”
Add to these pressures the reduction in enrollment of foreign students (they pay top dollar for an American college education), the cancellation of this year’s fall sports season (football, with its ticket sales, lucrative TV contracts, and licensing deals, is the meal ticket for nearly every other university sport), and the decision by many students to put off college at least temporarily, but perhaps permanently, and we can see why even Stanford has found it necessary to cut 11 of its sports programs altogether.
Last week, we also learned that 20% of Harvard freshmen are deferring their enrollment for a year. King Crimson, of course, with its massive $40 billion endowment, can weather just about any storm. But Harvard is Harvard, and every other school isn’t. Elsewhere, a recent survey found that 40% of students say they’re probably not attending any four-year college this fall, and 28% of returning students who have the option to return to their campus say they’re not going back or haven’t yet decided.
As Hayward mused, perhaps the coronavirus is actually a five-dimensional chess plot orchestrated by Donald Trump to destroy universities, unionized K-12 public education, and Hollywood in one fell swoop. If only.
Historian and classicist Victor Davis Hanson saw the higher-ed reckoning coming a while back. “What,” he asked last October, “do widely diverse crises such as declining demography, increasing indebtedness, Generation Z’s indifference to religion and patriotism, static rates of home ownership, and a national epidemic of ignorance about American history and traditions all have in common? In a word, 21st-century higher education.”
In part two of Hayward’s essay, he delves into the deeply flawed business models of our colleges and universities, including a funny lesson in Austrian school economics: “Markets set values depending on the subjective and always changing preferences of consumers in the marketplace. Who today would spend $5.99 for a Pet Rock? It may have been worth $5.99 in 1978, but it’s worth zero today, no matter how much labor you put into the rock.”
Higher ed as the modern-day version of the faddish Pet Rock?
Hayward expects this colossal correction to occur in relatively short order — perhaps as soon as spring 2021. But he also expects a Harris-Biden administration to come riding to the rescue with a big bailout, which Democrats would sell to the rest of us like they always do — as an “investment” in education and, therefore, an investment in our children’s future.
Which is just one more consideration on November 3.