Close to 90 US Colleges Could Perish Due to COVID-19: Research
Close to 90 colleges in the US could “perish” due to the coronavirus pandemic, according to an analysis by New York University Professor Scott Galloway. With college revenues dropping and lack of clarity in student admissions, many colleges are struggling to cope with the winds of the economic assault caused by COVID-19.
In a blogpost, Galloway, a marketing professor, has listed schools expected to “perish, struggle, survive, or thrive.”
He predicts that 10 to 20 percent of US higher education institutes can close permanently within a year. Professor Galloway details 437 US colleges and universities in a quadrant breakdown, where he lists colleges based on their existing value compared with tuition costs and vulnerability to COVID-19. Vulnerability, in this context, indicates lower endowments and high rates of dependence on tuition and fees from international students.
In his research, Galloway used data from the US Department of Education, US News & World Report, and student life scores from Niche.com.
The Quadrant Theory
Galloway’s analysis of the state of schools during the coronavirus pandemic is based on the quadrant theory.
A thriving school is of strong value and can emerge even stronger due to its exclusivity. Schools that are deemed to survive will weather the storm with endowments, good credential-to-cost ratio, or brand equity.
Struggling schools have scant endowments, high admit rates, and low brand equity, while schools predicted to perish have high amidst rates, weak brand equity, and depend mostly on international students.
While 131 schools are estimated to ‘struggle,’ 88 schools are set to ‘thrive.’
Prof. Scott Galloway talks to Anderson Cooper about how the pandemic could disrupt higher education.
Cooper calls it the “most interesting 5 minutes I’ve had in a long time.”https://t.co/gdUKLQsckE
— Open Culture (@openculture) May 27, 2020
Cracks to Chasms
Edmit, an educational consulting startup, wrote that close to one-third of US higher education institutions are at financial risk, and close to 90 percent of parents may not send their children to college if online learning continues.
Galloway’s correlation between alcohol consumption and university existence sought criticism from University Business. In a series of posts by professors at Clark University, which falls in the ‘perish’ quadrant, aspects like data inaccuracy, empirical validation, and regional discrepancies in COVID-19 risks came to light.
Calling Galloway’s analysis ‘embarrassing and irresponsible,’ the professors recognize the impact of COVID-19 on higher education and call for careful research.
Elmore Alexander, dean emeritus of Ricciardi College of Business, said that the “cracks in the ‘struggle’ and ‘perish’ cells” already existed. “Coronavirus has just turned them into chasms,” he said in a conversation with Business Journal.
Need for Action
Mentioning what needs to happen, Galloway called for federal government support and all-online classes for the fall semester across America.
Alumni involvement and assistance can help mitigate the effects by contributing to the alma-mater. He also suggests that schools replicate the corporate way of cost and price cutting and look to increase enrollments. To survive the pandemic, colleges must look at reinventing themselves with creative solutions, he writes.