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United States Universities Living On Borrowed Time

The gig is up.   That is the best way to describe higher education in the United States.   The foundations that were built on the model of European Universities in the Middle Ages is now less and less relevant.  Simply put, U.S. collegiate education has not adapted to new technologies, has not pursued new ways of educating, and is headed for complete failure.

Every class, every subject, and every skill is now on the Internet.  The best in the world at each school of thought, math, science, arts, and music are now teaching on the Internet independently.  Students now have the choice of spending a few weeks with the best in the world or spending a semester with someone with average knowledge.   The price for both is the same.  The quality of education is infinitely higher with the world expert than the average professor. Which would you choose?   Which looks better on your resume?

If you want to learn theoretical physics, why not attend an online class with Professor Stephen Hawking instead of Bob Jones at your state educational facility?   The money is the same.  Tuition costs in the United States have risen so rapidly that it is now cheaper to higher the best in the world for private tutoring than to study at a University.

In recent years a major trend has started in business to look at skill levels over sheep skins.   The bad decisions made by upper management and executives hired through the “old boy’s” network has been one of the primary catalysts in the move away from analyzing candidates by the source of the degree.  Now business looks at talent.  Your resume showing a month with Stephen Hawking is infinitely more powerful than just a degree.

In a New York Times Article : Academic Bankruptcy (Universities becoming less relevant, yet more Expensive) Mark C. Taylor accurately describes the upcoming crossroads for American Universities.  With tuition scheduled to be over $300,000 for a four year degree by 2020, American Universities know that they are facing a diminishing pool of potential paying students.   Unfortunately their solution is to expand their University base to foreign countries.  This is the pit from which there is no recovery.

The following graph shows the debt accumulated by American Universitites since 1972 shows the increasing risk of long term viability of American Universities.

We may well start to see the collapse of multiple private Universities over the next decade.  The point however is that with the rising debt, and with the bad decision to expand under the current model to foreign countries, American Universities are on a crash course.

The only way for American Universities to survive is to evolve to match the evolution of education.   The idea of the physical classroom is dead.   The idea of the “well rounded education” is dead.   The idea of tenured professors only teaching once a semester and then having graduate students teach the class for the rest of the semester is dead.  The idea of employing “loss leader” professors is dead.

The future of education is virtual classrooms, exacting education standards for specific skills, and price.  For American Universities to survive they need to hire the best talent in the world, publish their classes globally, and sell digital versions of the class content to those seeking to learn without pursuing a degree.  Students will pay a premium to attend the live classes via video teleconferencing, and pay less to simply learn through the videos published from that class.  That is where the future cash flow of education is coming from and it is what the surviving Universities will be engaged in within the next decade.


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