So what really happened to all that money? You know: the hundreds of billions of dollars awarded to large corporations in the bailouts of the 2008 recession, and the hundreds more earned throughout the 12-year rebound?

As a coterie of massive firms have announced mounting difficulties amid the COVID shutdown, many people have asked pointed questions about their finances. Did these firms save… anything? Where did all those profits disappear to? How could some of the wealthiest corporations in the world be brought to their hands and knees over such a relatively short period of time?

Pause. Hold that thought for three paragraphs.

For higher ed, the COVID crisis is only a dramatic evolution of a structural problem that has been unfolding for more than two decades. For many schools, particularly those in the North East and Midwest, the problem isn’t economic – at least not per se.

Since the 1960s, the birth rate for American households has been on a steady decline. In 1950, the birth rate was at an all-time high – 25.26 per 1,000. Today, that rate has dropped by more than half to an historical low of 11.92.

The time-frame displayed in the data coincides with the most rapid period of expansion ever undergone by higher education. In the last sixty years, more institutions have emerged than at any other time in history, and the total population of college-going Americans has similarly exploded.

Back to the question about private finances. I’m more likely than anyone to point my finger at greed and poor fiduciary stewardship to explain the sudden whiplash expressed by firms that should, by all rights, have prepared for the eventuality of a crash.

But there is another part of me (perhaps the part that has built two businesses) that understands why these firms are “failing.” They aren’t, really – at least not fundamentally. Successful businesses under duress from Corona are failing only relative to the conditions of success that they, their shareholders, and the American and global economy have come to expect.

In most cases, a failing corporation is not in danger of collapsing outright. It is simply squaring up to the fact that growing, or even maintaining its current position, may no longer be possible given the material conditions of the economy, the world. A market can go from bull to bear overnight. When that happens, growth-oriented firms go on their asses, cash-flows collapse, and layoffs ensue.

In a sense, higher ed is grappling with an identical dynamic, only protracted over a much longer period.

Historical conditions of demographic surplus (the baby boom in the 20th century) underwrote the growth of higher education to its current teeming scale. More institutions emerged, those that already existed expanded enrollments. To deal with the growth, new faculty, administrators, and consultants were hired. Revenues grew alongside expenses.

But as the birth rate dipped toward the end of the century, the tides of fortune began to wash out to sea.

(Demographic changes were only one of the factors that influenced the current position of higher ed. I’ll be talking about others in upcoming posts.)

Like most sectors of the economy, higher education has actively negotiated the slow collapse of demographic & economic supports for decades. By the time the 2008 recession hit, the industry had developed a toolbox of compensatory adjustments to rival those in the corporate world. These included increasing reliance on non-tenure academic labor, optimized resource allocations (STEM, anyone?), and across-the-board budget cuts.

These tools were mercilessly applied to cut the “bloat” that had accumulated in higher ed across many years of growth and prosperity. Yesterday’s success had collapsed into a full-blown labor crisis. The prophecy was complete.

On the student side of the equation, schools started to raise tuition costs out of pace with inflation. With an ever-shrinking pool of students to draw from, it became critical for schools to extract as much revenue as possible from those who remained.

* * *

Since 2008 (and before, really), schools across the country have been on an accelerated track of downsizing, outsourcing, and specializing. Previously, a high tide of tuition-paying bodies produced revenues that allowed schools to maintain solvency without focusing on certifications, specialized programs, or on STEM at the expense of all other disciplines.

But today, nearly all schools are having to make a hard choice – between maintaining (and, moreover, funding) their foundational pedagogical and mission commitments and pivoting to accommodate educational consumers who demand “more employable” forms of skill training.

The most elite schools in the country, sustained by a growing roster of dreamy-eyed student-applicants, may likely never have to choose. For everyone else, however, the culling is nigh.

When the culling begins in earnest, it will likely drive from east to west. It is an unfortunate fact that the regions facing the greatest demographic cliffs are also those with the highest concentration of higher ed institutions. High school graduates in Michigan are down 16% from peak, with an estimated 15% reduction still to come. Connecticut: 11% down with 18% more loss expected. Vermont: 27% down “since a pre-recession peak with a forecasted decline of 8%.”

For students, there are a few reasons why it may be important to understand the factors behind the vulnerability of higher ed.

For one, coming to grips with the demographic forces that prop up (or not) the market is necessary to making a minimally-informed decision about what it means to enter into school at this admittedly unstable time in history.

There is also a potential strategic insight for those who are determined to matriculate. Understanding the detailed trends unfolding on a regional level (what kind of students are in short supply) may provide students with a framework for leveraging their own value as a potential source of revenue for a school. That may seem crude, but these kind of calculations are top of mind for schools seeking to maximize their own market value and remain competitive.

You know that admissions cliche about “asking why the institution deserves to have you as a student”? Well, presumptuous though it may be, it’s not a bad piece of advice.

In the dirty market of higher education (because, yes, it is a market), the single most valuable resource is you: an educational consumer – a precious, precious tuition-paying body. As someone who spends about two hours a day talking to presidential cabinets at schools all around the country, take my word on this.

Is this reality good for the project of education in America? No, almost certainly not. Does it create real leverage for students? Time will tell.

If you’re here it’s likely because you, like me, are drawn to interesting takes about the world of higher education.

Maybe, also like me, you wish there were more content out there that looks at the state of higher education, the trends, the figures, and assembles these data into something that combines grounded analysis with a healthy dose of speculation.

Who am I? My name is Alex. I’m an entrepreneur with a graduate degree in political theory. I’ve been working in education for a long, long time. My first job (6th grade!) was as a tutor. So was my second, and my third. When I graduated college I co-founded a tutoring and college counseling company in the Bay Area – graduating from being a tutor to employing tutors. Finally, now, I own and run a consulting company that builds esports programs for colleges and universities across the country.

These experiences let me see the world of education from a variety of positions. I’ve been an undergrad, a graduate student, a teacher, an employer of teachers, and a consultant to some of the biggest educational brands in the world.

Why am I all about education? The industry has been a long-time interest of mine, ever since my junior year of college when I read Wendy Brown’s Undoing the Demos.

That book introduced me to the complexities of the higher educational landscape – the patchwork of private and public institutions, some hundreds of years old, that have provided intellectual, moral, and political training to the American population since the country’s inception. (And even before that. Did you know that Harvard predates American independence by a cool 140 years?)

Brown’s basic argument: Higher education is changing. Gone are the days when educational institutions could “afford” to build their pedagogies around the liberal arts, when the economic value of a college degree was unassailable, when the demand for “educational products” met or exceeded the supply of schools available to provide them.

Today, higher education is in a state of free-fall caused by factors that you may already be familiar with. In the future I’m sure we’ll cover these in deeper detail. But for now…

Demographic Shifts
Throughout the 20th century, colleges and universities benefited from high birthrates and high levels of public investment in educational accessibility. Over time, and particularly since the 2008 financial recession, the birth rate has gradually decreased. This has left many institutions with a shortfall of bodies (and tuition revenue) below the levels they have grown to depend on.

Market Saturation Driving Down the Value of a Degree
Remember that “high levels of public investment in educational accessibility”? As a larger share of the US population has received a college degree, we have seen a process of “degree inflation,” where the credentials once required to stand out in a job pool have increased over time. As the market has flooded with college-educated labor, the marginal value of any single degree has decreased.

The Rise of (For-Profit) Remote Education
Vertiginous tuition prices at many traditional schools, wage stagnation, and lack of educational access has created the conditions for distance learning organizations to capture serious educational market share. Many of these offerings are provided by elite institutions or for-profit colleges that attract students with low-completion time or inexpensive degree and certification programs.

Acute Financial Crises (e.g., Corona!)
Every now and then, good old capitalism undergoes a crisis that brings to a head the increasing dynamics of inequality and precarity that define our economy. In 2008, the financial recession melted state and philanthropic support for higher ed institutions while dealing a massive blow to endowments. The result was a period of austerity in which budget cuts were balanced with highly asymmetrical allocations of capital to STEM programs. Today, amid Corona, even elite institutions are announcing 15% cuts across the board. If schools fail to reopen in fall, the consequences will be dire. Many institutions may not survive.

Each of these factors, and all of them together, contribute to an increasingly competitive, over-saturated, and existentially fraught marketplace for higher education.

We are, historically speaking, not used to thinking of educational institutions as businesses. Indeed most colleges and universities today are non-profit organizations. But the convergence of these social, political, and demographic phenomena have transformed the underlying economics that allowed the ecosystem of higher education to remain undisturbed (even to thrive) over more than two centuries.

There is an arms-race unfolding in higher education today. Schools of every kind are adopting the operational characteristics of private firms, desperately searching for a profitable niche, lest they risk extinction via redundancy.

New programs, concentrations, and degree-tracks are springing up at schools across the country, ostensibly aligning the educational offering of institutions more closely with the landscape of economic opportunities available to graduates. These program investments have been balanced out by increasing budget cuts and outsourcing of academic labor. Whole departments in the social sciences and humanities are being erased from cash-strapped institutions. Meanwhile, new master’s programs in public health, STEM, and business are on an explosive growth track.

The point of this post–and this site–is not to bemoan the state of higher education. At least, not only.

Most publications that focus on the trends affecting higher education have an adult audience in mind. Publications such as the Chronicle of Higher Education and Inside Higher Ed focus on attracting a reading audience of professional academics, administrators, and business-people working in higher ed.

By contrast, I have found that educational media dedicated to students tends to be more coddling, less substantive, and overall more poorly written.

As any article about college choice will tell you (usually in the first few sentences), the decision to go (or not) to college is one of the biggest decisions a student can make make. Where most go wrong, however, is in assuming that students lack the ability to perform a sophisticated, wise, and often self-directed evaluation of their options.

From my direct experience as a college counselor, I know the extents to which a motivated student will go in order to make a critically-informed choice about if, where, and why they want to go to school.

The goal of this site, then, is to arm students with deeply considered information about higher education that will be an asset in helping them frame their decisions.

To me, that means more than just comparing rankings, or producing another listicle about how to write a good common app essay. It means:

• Understanding the relationship of social, economic, and political trends to institutional reactions and investments.
• Exploring the technological transformations that are touching down on campuses and changing what it means to be a student.
• Looking at the broader economy to offer frameworks and predictions about the direction of higher education.
• Discussing demographic shifts in a way that helps students think more strategically about their application process.

At the same time, I do want to provide some more immediately concrete ideas to students who are going through the college search process, writing their essays, or trying to figure out scholarships. I am, after all, a part-time college counselor and long-time writing coach. I want to use these skills as best I can to help guide students in the right direction.

Well, that’s all for now. If you’re reading this, thanks for sticking it out. I’m going to be working on a list of topics over the next week. I’m hoping to get something up as soon as I can.

Until then–

AM