The shake-out is coming: the Wall Street Journal looks at higher ed’s future

Last month the Wall Street Journal published an article about the future of higher education with a clear and provocative title, “U.S. Colleges Are Separating Into Winners and Losers”.  In it Douglas Belkin offers a dark argument: that a chunk of American higher ed is in existential trouble.

The editors summarized this argument as “the shake-out is coming”.

Here I’d like to pull out some key aspects of the piece, as they add to our understanding of the future of higher ed, and in particular what I’ve elsewhere referred to as “peak higher education.”

Belkin does a good job of quickly summarizing the long-term boom and bust narrative for American higher ed enrollment:

For generations, a swelling population of college-age students, rising enrollment rates and generous student loans helped all schools, even mediocre ones, to flourish. Those days are ending… In 1980, 47% of high-school graduates enrolled in a two or four-year college. Today, it’s nearly 70%. But between 2011 and 2016, enrollment at the bottom 20% [of campuses in the WSJ ranking] declined 2%. The top 80% of schools grew 7%.

So: a long arc of growth, followed by a recent decline.

Belkin also identifies geographic differences – utterly known to you, my readers:

Because the demographic dip is so pronounced in the Midwest and Northeast, low-ranking schools there are the most vulnerable to enrollment declines. Schools in Pennsylvania, Ohio and New York made up a quarter of the 237 schools that saw a 10% or greater decline in enrollment between 2011 and 2016.

Schools like Edinboro University (1022 on the WSJ ranking) in northwestern Pennsylvania are scrambling to realign their academic offerings to attract more students as they cut costs. Between 2011 and 2016, first-year enrollment has plummeted to 1,051 from 1,482 and the faculty shrank by nearly a quarter.

A death spiral. Photo by Paul Downey.Now within that overall and geographically markets decline is a divide, which is key to the analysis.  Belkin mentions the WSJ running an analysis of more than 1,000 colleges and universities (roughly 1/4-1/5th of US higher ed) and reaching this conclusion: “U.S. not-for-profit colleges and universities are segregating into winners and losers—with winners growing and expanding and losers seeing the first signs of a death spiral.”  This finding and its phrasing alike both echo Slate’s notorious 2014 celebration of the death of small colleges (“If the demise of a few schools can make the rest of higher ed a bit healthier, then let the death spiral whirl”).

The article doesn’t go into detail about how the analysis works, but suggests that it’s strongly driven by economics, unsurprisingly.  “The Journal uses 15 metrics to determine quality and rank. They include return on investment, student engagement and academic resources.”  For example, “At Clemson University, the Journal found, graduates on average earn $50,000 a year 10 years after entering college and the default rate on student loans is 3%; the average Concord graduate earned $32,000 and the default rate is 15%.”

So we see one projection for the future of American higher ed, that a good number of institutions are facing serious, even existential threats.  Identifying which institutions are thus endangered becomes a matter of assumptions and models.

Now, this then leads Belkin to show some strategies whereby these campuses fight the death spiral:

…academic program prioritization (“Edinboro Provost Michael Hannan said if he could go back a decade, he would urge his school “to move much more quickly to evaluate which academic programs are attracting students and begin launching new ones that do a better job.”)

…closer ties with business (“Clemson’s success is tied to its embrace of the labor market, said Chuck Knepfle, associate vice president of enrollment management. The school has several corporate partners and has tied curriculum to their needs.  ‘Our students get jobs, we put successful people out there and that is well known,’ Mr. Knepfle said.”)

…aggressive recruitment from far away (“At Concord, Jamie Ealy, vice president of enrollment management is increasing efforts to enroll students from out of state and overseas. He has hired people in Florida and Virginia to market the school and is trying to attract students from Scandinavia, Africa and Asia.”)

…and cuts, including queen sacrifices (“All these schools have just been doing their own little thing and hoping all these problems will go away,” said [Charles Becker, Concord’s vice president for business and finance]. “They haven’t and they won’t. Consolidation and right-sizing is ahead.”)

Again, my readers are familiar with all of these.  These are all strategies in play, shaping where campuses head next.

Consider: recruiting aggressively out of state and out of country, which runs into all kinds of problems (rising nervousness about heading to the US; state governments unhappy with public universities focusing effort elsewhere), and hence a variety of politics.  Close ties with business is also heightening political tensions over the purpose of higher ed, not to mention anxiety about either certain businesses (cf the current anti-Silicon-Valley moment) or about business in general (cue left politics, or worries about wealth inequality).

Academic program (re)prioritization brings up another suite of politics.  We can see the arguments most brilliantly displayed in Chris Newfield’s response to the Stevens Point story.  Again, what is the purpose of higher ed?  What is the role of economics, from a program’s financial sustainability to graduates’ incomes?

I don’t know if these politics will escape the academy.  In my work I’ve found the rest of the United States blissfully ignorant of most of higher education’s realities, from the shift to adjunctified labor to the transition to a new student body.  Perhaps some arguments and signals will escape academia’s event horizon to reach state legislatures and national media, translated or scrambled in the process.

Overall, though, I’m not seeing much interest in directing public monies to buoy up struggling publics, nor public appetite in ramping up our extraordinary debt even further to pay for privates.  In recent talks I’ve been describing this as “crunch time”, and will write more about that theme shortly.

PS: on a meta-note, this post is about an article many people can’t see, because it was trapped behind a paywall.  Recently that newspaper experimenting with making more content available to some non-paying readers.  Should I keep writing about these non-open stories, or avoid them?  Or should I summarize them, as I did here?


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13 Responses to The shake-out is coming: the Wall Street Journal looks at higher ed’s future

  1. Malcolm Brown says:

    Bryan, thanks for sharing. By all means, continues to discuss articles behind paywalls; you summary of the gist of such articles is very helpful

  2. Phillip Long says:

    Bryan: keep writing about things behind paywalls. You’re the peephole into them for many who otherwise would join the blissfully ignorant.

  3. Phil Katz says:

    I concur — please keep writing about articles behind paywalls. It is important to know what diverse audiences are reading and saying about higher ed. How else can we influence people who might be outside our usual bubbles? Plus, many of us actually have access to these articles via academic or other libraries — and, in the case of the Wall Street Journal, they often post stories to their Facebook page with free access to the full text. (I was able to find the full text of the Belkin article that way.)

    • Beth McGarry says:

      I was able to obtain the article directly thru WSJ without a paywall or a subscription. We have already begun to see colleges in the midwest in trouble, particularly in the State of Illinois and now we are seeing some mergers as well and to name a few areas, Boston, Ind. and Florida.

      • Bryan Alexander says:

        Thanks for the thought and tip, Phil.
        Beth, is that due to their recent change?

        Agreed on those changes in Illinois.

  4. Caleb Clark says:

    Please to keep writing. I’m especially interested in the challenges of small and micro liberal arts colleges in the North East.

  5. Paul Czarapata says:

    Please keep it up Bryan, this is very helpful

  6. Matthew Henry says:

    Yes, please continue to write articles behind paywalls. Many times, the paywalls are get what you pay for and are the best articles 🙂

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