When it comes to academics, I’m a pro at the Scantron sheet! ABACADABA was the go-to guessing strategy back then (and hasn’t failed me yet). I’d like to take this incredible ability and do a little guesswork on what will happen to colleges over the next 10-20 years.
With colleges starting up again in this new semi (or fully remote) environment there is a lot of uncertainty on the future of colleges. The current issue we see is that the cost of colleges and universities is growing at nearly 8% a year (source: Finaid). You can see what that means in real dollars by checking out my recent post. The numbers are staggering. If things continue on this trajectory, college for my three-year-old son could approximately cost $900,000.
We all know expenses will continue to increase and inflation will always exist. The issue, however, is that over the past 25 years wage inflation has hovered somewhere around 5% per year. This means the cost to send someone to college is growing faster than the increase in one’s ability to earn more money. The other issue at hand is the average salary of a high school graduate is approximately $35,000/yr, while a bachelor’s degree gets someone approximately $59,000/yr.
What this data implies is the necessary evil to get a college degree. That said, it’s becoming an increasingly shrinking benefit going to college, especially when you consider the student loan one usually accumulates to fund this income differential.
I believe “creative thinking” is how big problems get solved. If I try to think through this logically, I come to the following realizations.
- Things can’t continue on this growth rate.
- College is still a good investment.
- Technology is a huge resource.
- These institutions are mostly for profit.
- There is a need to make more money.
If I had unlimited funds, I would start a university tomorrow. What a great way to make money! I’d have a resource people will literally mortgage their homes to obtain. However, these stodgy universities are working off an old business model. Is that about to change with a Covid push?
What I would do is still open a traditional four-year university. I’d have a gorgeous campus where students can lay on the quad and play ultimate Frisbee. I’d have frat and sorority houses like all the other universities. I’d also charge fair market value compared to other institutions. The one major thing I would do differently; however, is to put a camera in every classroom. I’d have 100,000 (heck make it 500,000) enrollees in my college that would come under a different model–online only. They could still get an education but at an online price.
The university will basically have a small investment in technology to monitor these students and allow them the ability to attend the lecture remotely. The costs to the school would be minimal and thus the profits enormous. Furthermore, it would allow the college to go downstream and offer a low-cost college education.
There will have to be some distinguishing factor as to the difference in the degree. Maybe those that go to the university and pay the higher in-person price get first access to job opportunities. But at the core, it’s nothing but upside. It’s a win-win as the university makes more money and more people inevitably get a college education.
In the end, I think this is the perfect solution. It’s supply and demand in its truest sense. Why limit your client base when all you have to do is invest in some technology and you are able to reach more people at a more affordable rate?
As an employer, the other harsh reality is that I don’t really care where you went to college. I especially don’t care if it was in person or online. At the end of the day, having the degree is important, but making sure you can do the work and fit our culture is paramount.
There you have it–Andrew Rosen’s official ABACADABA guessing act at what the future of college will hold. I do have 3 kids I’m hoping go that route and am banking on something having to give. Love to hear your guesses if you got anything interesting to share!