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Higher Education in Post-Covid America*

The widespread arrival of effective Covid-19 vaccines means, although it is obviously not certain, that colleges and universities must plan for a full opening in the Fall of 2021. What will the new normal in higher education look like? To answer this important question, we first must acknowledge the true state of the academy.

Colleges and universities are often thought of as unchanging – as functioning in the same way as they have for decades, and in some cases for hundreds of years. Given this, a high percentage of students, parents, faculty and academic administrators probably expect that next academic year everything will go back to the way it used to be.

But the “old normal” was not a stable one.

Colleges and universities operate a business in the sense that they offer services – research and teaching – in exchange for tuition and grants. If their revenues (including gifts) do not exceed their expenses, they must close their doors. Tuition, housing and meal revenues are the primary source of revenues for most private colleges and universities. The typical 4%-5% annual “spend” from their endowment is not large enough to be a significant source of revenues. That is true for both private and most state universities.

Tuition has been under pressure for a long time. For more than ten years, there has been a significant demographic dip in the number of college-eligible high school seniors in the United States, especially in the Northeast. This has made growth in undergraduate tuition an unattainable source of increased revenues at all but the elite colleges and universities, where the large endowments also reside. Public and private institutions sought to fill the revenue gap with foreign students paying “full freight,” – i.e. without institutional financial aid – especially graduate students from China and India. However, the 2008 Great Recession in China and India, followed by the Trump Administration’s restrictions on visas for Muslims, as well as deterioration in relations with China and a general anti-immigration stance resulted in sharp drops in the number of foreign students at American colleges and universities. Desperate schools raised tuition and fees where they could, but against strong resistance. All of this led many observers to conclude that the business model of higher education was broken.

Economic woes and high college costs also meant that many students and parents shifted their view of higher education from a time for experimentation to one of job preparation. The Great Recession, resulting unemployment, and then the pandemic supercharged this trend and put extra pressure on smaller liberal arts colleges to defend the values of liberal education to “customers” who wanted training to get good jobs and careers. Even before Covid-19 dominated the story, every year there were more colleges pruning faculty, departments and whole programs, and even closing their doors or merging with other colleges.

Beyond its damage to the economic model of colleges, Covid-19 had another, important negative impact. Most of the students who became freshman in the Fall of 2019 and 2020 have had their college experience seriously damaged academically, socially and as an orderly transition to adulthood. They have spent all, or a large part of their college years taking classes on a screen in their dorms or off-campus anywhere in the country or the world. And it hasn’t been a great experience.

Online live classes and video recorded lectures can be very effective, but they call on a different skill set for the faculty and a different pedagogical approach for the delivery of knowledge and analytical skills. Today it is common to hear faculty complaints of burnout in switching to online delivery with very short notice and student complaints of boredom and ineffective teaching and inadequate learning. Both are probably right. In remote teaching, faculty and students miss the numerous nonverbal clues that convey meaning and feedback and provoke interest and attention. Most faculty had neither the training nor the experience to be really effective at remote teaching. Although the technological quality has improved each year, the level of dissatisfaction with the teaching and learning process is very high. And the loss of the social experience of college remains almost total.

Now, let’s leap ahead to the Fall semester of 2021.

The business model of higher education is still broken, foreign students have gone to other countries, American students and their families are even more focused on job preparation and how they will repay their student debt, and the initial faculty resistance to online education has been smashed by the pandemic. Students will be back in dormitories and classrooms. Will vaccination or a sufficient level of antibodies be a condition of their ability to return? If they refuse vaccination, will the institution provide online access to live or recorded classes? If so, will there be reduced tuition? Should questions like this be decided on a national, state or institutional level?

Out of this dramatic swirl of pressures and unknowns, I see five key conclusions.

First, employers and knowledge workers – including in higher education – have discovered remote working. Many will want to continue working from home, at least part time. Others may want to move away from congested cities to more remote areas and only make occasional trips to the office. Employers will switch to trading desk space and “hoteling,” embracing the reductions in their real estate costs that follow. This means that the ability to teach, learn and collaborate online will be a critical skill of the undergraduate learning experience. Combined with cost savings for the institution from online education, it appears inevitable that remote learning of various kinds will be embraced by colleges and universities.

Second, small liberal arts colleges will continue to experience shrinking numbers of students majoring in the Humanities. The argument that liberal education creates a more agile and adaptive mind, while true, will become dramatically less persuasive in the competition for enrollment. Small colleges will be under pressure to find the funds to increase their Economics departments and offer degrees in Finance. Computer Science, Artificial Intelligence and Market Analytics will continue to grow in response to market demand. The same is true of Psychology and integrated undergraduate and graduate programs in the health sciences, as important aspects of medical care are delegated to nurses, nurse-practitioners, physicians assistants and various specialists in physical, occupational and rehabilitation therapy and pain management.

Third, there is an astonishing lack of communication between the academy and employers, except in certain professional areas like medicine. Much of the existing communication is governed by licensing exams. Institutions graduating nurses, lawyers, board-certified physicians-to-be, accountants and the like generally abhor the notion of “teaching to the exam” because of its trade school flavor. But if their graduates are not becoming licensed in their chosen professions because they cannot pass the exam, they have failed utterly in their most basic obligations to their students. Employers want young professionals who have more knowledge and skills than those required to pass the licensing exam. Without an ongoing dialogue between the academy and various sectors of the economy, the curriculum will often be mismatched with the real needs of the students because the ideas of the controlling faculty in that area are out of date.

Fourth, this same dialogue between schools and employers is also the key to responding to the pressure faced by colleges and universities to generate new revenue streams. Institutions with extensive research efforts (like those involved in the race for a Covid-19 vaccine) can participate in the revenues generated by the application of their work. But for most mid-sized and smaller institutions, the answer needs to be adult education. The pace of change in virtually every area of work has been supercharged by technology and artificial intelligence, destroying jobs and creating new ones very quickly. The need for retraining has not been this critical for seventy-five years or more. Someone will fill that educational gap. It is a tremendous opportunity, but one that requires a very different mindset from the culture of most colleges and universities. The substance must be employer-driven. It must be offered online in a convenient way and at convenient times for adult students who have full-time jobs. And it requires a continuous feedback loop with market testing for relevance and usefulness so that it can be continually updated.

Finally, online teaching and remote learning demands a new pedagogy adapted to that development. Faculty need to think in fresh ways about how best to deliver each packet of information, each process and each analytical technique. It will take substantial investment from the sponsoring institution in software and training, as well as time, to do this well and integrate it into a hybrid curriculum.

Every industry has experienced wide-spread disruption in the last few decades. Higher education, long in denial about the need to fundamentally change, must now embrace its moment to cross the Rubicon.


* "Higher Education in Post-Covid America" was originally published by Jackson Hole Economics ( on December 2, 2020.

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