By 2030 over 50% of colleges will collapse: Part 2.

Author:Frey, Thomas
Position:DEMYSTIFYING THE FUTURE - Column
 
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Last month's column explored the different metrics impacting the world of higher education: rising costs and student loan backlash, digital-era trends and the demand for online courses, employment statistics, and shifting trends. This month's column will now look at several reasons why some colleges will collapse in the future.

Eight Reasons Why Over 50% of Colleges Will Fail by 2030

So what happens when the legacy power of an institution meets a rapidly changing business environment driven by emerging technology? Some will survive but many will not.

For this reason I've decided to focus in on eight core issues for colleges that will drive a wedge between business-as-usual and the unstoppable forces of change.

  1. Overhead costs too high--Even if the buildings are paid for and all money-losing athletic programs are dropped, the costs associated with maintaining a college campus are very high. Everything from utilities, to insurance, to phone systems, to security, to maintenance and repair are all expenses that online courses do not have. Some of the less visible expenses involve the bonds and financing instruments used to cover new construction, campus projects, and revenue inconsistencies. The cost of money itself will be a huge factor.

  2. Substandard classes and teachers--Many of the exact same classes are taught in thousands of classroom simultaneously every semester. The law of averages tells us that 49.9% of these will be below average. Yet any college that is able to electronically pipe in a top 1% teacher will suddenly have a better class than 99% of all other colleges.

  3. Increasingly visible rating systems--Online rating systems will begin to torpedo tens of thousands of classes and teachers over the coming years. Bad ratings of one teacher and one class will directly affect the overall rating of the institution.

  4. Inconvenience of time and place--Yes, classrooms help focus our attention and the world runs on deadlines. But our willingness to flex schedules to meet someone else's time and place requirements is shrinking, especially when we have a more convenient option.

  5. Pricing competition--Students today have many options for taking free courses without credits versus expensive classes with credits and very little in between. That, however, is about to change. Colleges focused primarily on course delivery will be facing an increasingly price-sensitive consumer base.

  6. Credentialing system competition--Much like a doctor's ability to...

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