HBS professor Clayton Christensen has gone on record as saying that online education is so cost effective that half of US universities could go out of business within the next 15 years. Professor Christensen is the co-author of The Innovative University which discusses the challenges posed to these colleges by online, for-profit universities.
Christensen does mention that most large donors give generously to colleges because of personal relationships they developed at the schools and pointed out that is something the disruptors won’t likely be able to replicate.
We’ve seen research from Moody’s that small colleges, in particular, are going to be more likely to merge or close. We’ve also been concerned with the facility spending on items such as luxury dormitories.
Time will tell of course, but please don’t hesitate to share your thoughts below.
Forbes published an article earlier today that reexamines Harvard Business School Professor Clayton Christensen’s 50% college failure prediction. In 2017-2018, the average tuition discount rate grew to 49.9% for first-time, full-time freshmen. This is well above the 35% threshold that the National Association of College and University Business Officers believes signifies financial irresponsibility. The Forbes article also states the population of 18 year-olds is starting to decline and will decline more rapidly beginning in 2026.
They’re not going to all fail. Too many college aspirants. The high discount rate just means colleges are becoming like the outdoor markets where everyone has to negotiate and only a few dumb tourists pay the price the vendor initially requests.