Higher ed presents a promise for America and the world. But every year, my industry falls further from that promise. The underpinnings of that view are simple and static: Higher ed has increased its prices by 1,400 percent since the late 1970s, but the product has not appreciably changed — the biggest cost driver is administrative bloat. And, rather than catalyzing economic mobility, U.S. higher ed is stifling it. At 38 of the top 100 colleges in America, including five of the Ivies, there are more students from the top 1 percent of income earning households than there are from the bottom 60 percent.
Yet, higher ed’s brand strength (nobody donates $20 million to name a building on Apple’s campus), cash reserves (among elite institutions), and stranglehold on the American psyche have insulated it from disruption for decades. The litmus test for success — and for determining your role in our species — is if (and which) college your daughter graduates from. Suzy might be a heroin addict, but if she’s at Dartmouth, all is forgiven.
Last year, we predicted the pandemic would be the fist of stone that finally meets higher ed’s glass jaw. Were we correct regarding the coming storm? Or were we alarmist, underestimating institutional strength (or rather, inertia)? The answer is … yes.
K-Shaped (College) Recovery
As we begin to emerge from Covid-19 (God’s ears), American colleges look like the rest of America. Specifically, the fifth installment of the Hunger Games franchise, wherein our society engages in the idolatry of economic winners, everyone else hopes to survive, and many meet a gruesome end.
The most selective schools received 17 percent more applications than last year, and the elite of the elite saw even greater increases: Yale, 33 percent; Harvard, 43 percent; MIT 66 percent. The rich are getting richer. (...)
Admission to a top school can be life changing, but in a country that graduates over 3.5 million people from high school every year, the 1,700-person freshman class at Harvard is immaterial. Over the past 30 years, the number of seats at Ivy League schools has increased only 14 percent, while the number of high school graduates has expanded by 44 percent. The Ivy League sits on a total endowment of $140B, and shares this wealth with just 17,000 freshmen each year. (...)
A year ago, I predicted that these schools would leverage their extraordinary brand strength and the forced adoption of distance learning technology to partner with big tech and radically expand their class sizes. “In 10 years,” I told New York magazine, “it’s feasible to think that MIT doesn’t welcome 1,000 freshmen to campus; it welcomes 10,000.”
I was wrong. The leadership and alumni of elite universities continue to register tremendous psychic reward from the Hermès-ification of their institutions, versus any remaining claim of public service.
A year ago, I predicted that these schools would leverage their extraordinary brand strength and the forced adoption of distance learning technology to partner with big tech and radically expand their class sizes. “In 10 years,” I told New York magazine, “it’s feasible to think that MIT doesn’t welcome 1,000 freshmen to campus; it welcomes 10,000.”
I was wrong. The leadership and alumni of elite universities continue to register tremendous psychic reward from the Hermès-ification of their institutions, versus any remaining claim of public service.
Wildlings
While the lords of American higher ed fortify their walls, and the erasures of second-tier castles multiply, there is a gathering force about to ignite a fire the North has never seen. Last year, I believed the change would occur on the supply side, with expanded enrollments at the top schools. It now looks as if the demand side will change the game: Employers are rethinking certification.
From Elon to Apple, some of the most admired employers are dropping the college degree requirement from more and more jobs. Over 130 companies have committed to accepting Google-certified courses as equivalent to credits earned at traditional four-year colleges. More than 250,000 people took Google’s IT certificate program in its first two years — and 57 percent of them did not have a college degree.
Similarly, Amazon announced a partnership with Lambda School, launching a nine-month, full-time training program in software engineering, designed to put graduates in jobs with an average base salary of $80,000. Students are not obligated to pay anything upfront; instead, they pay based on their salary after graduation. Again: no college degree required.
Here in Florida, Governor DeSantis has proposed using $75 million in federal Covid relief funds to invest in vocational training programs. There’s a scarcity of skilled tradespeople, and those are good paying, secure jobs — it will be a long time before robots replace electricians and plumbers.
This is bad news for schools without the global brand equity of the elites. They are being unbundled, piece by piece, just as newspapers were dissected (classifieds, movie listings, news, sports) and sold for parts to benign billionaires. Today, we have a handful of elite newspapers that are thriving, a wasteland of dead/dying second-tier papers, and a roiling maelstrom of tech-enabled news sources serving the mass market. Since 2004, two thousand newspapers have shuttered. It could be as bloody among universities.
While the lords of American higher ed fortify their walls, and the erasures of second-tier castles multiply, there is a gathering force about to ignite a fire the North has never seen. Last year, I believed the change would occur on the supply side, with expanded enrollments at the top schools. It now looks as if the demand side will change the game: Employers are rethinking certification.
From Elon to Apple, some of the most admired employers are dropping the college degree requirement from more and more jobs. Over 130 companies have committed to accepting Google-certified courses as equivalent to credits earned at traditional four-year colleges. More than 250,000 people took Google’s IT certificate program in its first two years — and 57 percent of them did not have a college degree.
Similarly, Amazon announced a partnership with Lambda School, launching a nine-month, full-time training program in software engineering, designed to put graduates in jobs with an average base salary of $80,000. Students are not obligated to pay anything upfront; instead, they pay based on their salary after graduation. Again: no college degree required.
Here in Florida, Governor DeSantis has proposed using $75 million in federal Covid relief funds to invest in vocational training programs. There’s a scarcity of skilled tradespeople, and those are good paying, secure jobs — it will be a long time before robots replace electricians and plumbers.
This is bad news for schools without the global brand equity of the elites. They are being unbundled, piece by piece, just as newspapers were dissected (classifieds, movie listings, news, sports) and sold for parts to benign billionaires. Today, we have a handful of elite newspapers that are thriving, a wasteland of dead/dying second-tier papers, and a roiling maelstrom of tech-enabled news sources serving the mass market. Since 2004, two thousand newspapers have shuttered. It could be as bloody among universities.
by Scott Galloway, No Mercy No Malice | Read more:
Image: Prof G Analysis of Ivycoach Data
