Chances are you have clients with college-age kids or grandkids who are wondering if they’re still getting their money’s worth. Perhaps you have your own. You may also have generous clients contemplating large gifts to their alma mater. Either way, it’s a stressful decision and many feel they’re getting ripped off.
Most colleges aren’t budging on tuition, even during these difficult times. As The New York Times reported last week, a few universities have offered tuition discounts, but most are holding firm, arguing that remote learning and other virus measures are making their operations more, not less, costly at a time when higher education is already struggling
While universities generally give themselves high marks for how the handled the swift transition to remote learning last spring, our unscientific poll of current students gives colleges a 2 or 3 on a scale of 10 when it comes to their remote learning experience.
Top Hat’s nationwide survey of over 3,000 students found remote learning left a lot to be desired.
- Seven out of eight students (85%) said they “miss the social experience with other students.”
- Over two-thirds of student responses selected lack of “regular access to classmates” as having an impact on them.
- On a scale of one (low) to four (high), students rated their “ability to stay connected with classmates” as pretty low.
- 84% said that they “miss face-to-face interaction with faculty.”
- Over half of the students selected lack of “regular access to faculty” as having an impact as well.
At Rutgers University, more than 30,000 people signed a petition calling for an elimination of fees and a 20 percent tuition cut. More than 40,000 have signed a plea for the University of North Carolina system to refund housing charges to students in the event of another Covid-19-related campus shutdown. The California State University system’s early decision to go online-only this fall has incited calls for price cuts at campuses from Fullerton to San Jose.
At the University of New Mexico, students face a tuition increase even though the school is offering a mix of online and remote classes. One senior, who helped lead a protest against the increase, told The Washington Post: “it’s unethical to charge more when students are getting less.”
“The question is why are we paying the same amount — if not more — for way, way less?” she asked. “I know this is what’s best for public safety, but there’s no doubt the level of learning is lower online.”
Alumni giving and enrollment were down before the pandemic
Kyle Walters (#thepersonalcfo), a partner at L&H CPAs and Advisors in Dallas, told me the other day that the academic community will have no choice but to compress 5 to 10 years’ worth of innovation into 18 months if they want to survive. I know the conversion to online learning wasn’t easy last spring. But if you’re in a competitive marketplace and you’re still charging the same price for a product that is not nearly as good as it used to be, you’re asking for more competition (state schools, community colleges, online colleges) or possibly disruption (Google University).
Also, don’t try to convince students that Remote College Is Still More Valuable Than a Gap Year as Theresa Ghilarducci a Professor of Economics at the New School for Social Research, wrote in Bloomberg recently. She argued that taking a year off can cost more than $49,000 over a 20- to 40-year career. You can read for yourself how Ghilarducci arrived at the math, but her assumption seems based on students being up to their ears in debt and on not being able to earn any money at all while taking their gap year. Those are dangerous assumptions. There’s a bigger opportunity cost for colleges when they intimidate students and their families into paying full tuition for a watered-down experience—alumni donations will continue dwindling.
Even before the pandemic, there were signs that the growth of alumni giving was down. Moody’s Investors Service, which in March downgraded the higher education sector to negative from stable, wrote that even before the pandemic, roughly 30 percent of universities “were already running operating deficits.” That’s not surprising when alumni can account for one-third of a school’s operating budget.
Pissed off students today = stingy alums down the road
A few years from now, when universities start sending annual pleas for alumni giving, how do you think those young adults and their families will react when they think back to how they were treated in 2020? Not great.
One undergrad who responded to the aforementioned Bloomberg Op-Ed said: “If many of these students experience college virtually, they will have little to no allegiance to their alma mater once they graduate. That means when their college calls/emails them asking for donations, it will be A LOT easier for them to say NO since they have no emotional ties to their college aside from online experiences which for the most part are 100 percent forgettable. Less donations means less budget for faculty and academic programs down the line.”
When you have fewer and fewer customers willing to keep paying more for an inferior product, how sustainable is that business model? Maybe it’s time college administrators and their high-priced consultants dusted off their Econ 101 notes. The laws of supply and demand are not in your favor long-term.
What’s your take? I’d love to hear from you.
#gapyear #collegetuition #remotelearning #tuitionripoff