A savage irony inflects the debate over university campuses reopening this fall. All those campuses with their exquisite landscaping, their mausoleums to titans of private equity, their swanky LEED-certified buildings, and their recreation centers with climbing walls, all constructed at extraordinary expense to draw students and raise the ante in the college ranking game—all of them are potentially off-limits due to COVID-19.
Keep campuses closed through the fall, and administrators may plunge universities into insolvency. Open them up, and they risk fanning the flames of a pandemic.
Most universities are planning to open.
Some plan to bring some tuition-paying students back to their dorms, yet have most classes online. That seems backwards, since keeping students away from campuses—which have been compared to cruise ships and nursing homes as sites of rampant contagion—might seem like the highest public-health priority. Recently, an outbreak that infected at least 136 students at the University of Washington was traced back to fraternity housing, while Berkeley, which had enjoyed a relatively low incidence of the virus, traced 47 cases in one week to fraternity parties.
One must pity the administrators making these decisions—but not too much. The dilemmas they confront result from two generations of perverse transformation in higher education, for which they have been very well compensated. The great bubble that has funded university education in this period, characterized by ever-rising tuition, growing real estate footprints, and administrative bloat—paid for by an orgy of federally subsidized student loans and growing cohorts of foreign students paying full freight—is about to pop. An extinction event for a broad swath of American higher education looms on the horizon.
As it has in so many other areas of U.S. life, the COVID-19 pandemic is casting a harsh light on the dysfunction of American higher education and its move to a market paradigm. It’s not that university leaders necessarily want to open their campuses with new outbreaks looming in the fall. It’s that their business model leaves them no alternative.
AS OF JULY 19, some 85 percent of the 1,100 colleges tracked by The Chronicle of Higher Education were planning for in-person or hybrid classes. Why would so many institutions take unknown risks to hold in-person classes when online education is a well established, if hardly ideal, alternative?
The COVID-19 pandemic is casting a harsh light on the dysfunction of American higher education and its move to a market paradigm.
University administrators now confront a question that no one can yet answer: Are families willing to pay tens of thousands of dollars for an online education when they can get the same or better at a fraction of the cost? They’re betting the health of their students, employees, and communities that most will only choose to pay if campuses reopen.
Maybe the price tag is worth a degree from Harvard or Princeton, which fearlessly announced that nearly all their classes would be online this fall. But is it worth the cost to send your child to Colorado College, Washington and Lee, Colby, or Trinity, all of which pull vastly more of their students from the top 1 percent than they do from the bottom 60? Is it worth paying a prestigious out-of-state university to take online classes when you could sit in your living room and take the same class from your in-state university at one-quarter the cost or less?
One root of the current dilemma is the ever-rising price of tuition—and the ever-growing dependence of universities on tuition revenue. Not very long ago, public universities were very inexpensive and even free. As recently as 1982, in-state students paid no tuition to study in the University of California system (with annual fees just over $1,000). In 2000, tuition was just $3,086. Today, it costs $14,000 in tuition alone. Nonresidents pay $43,800, not including room and board. The City University of New York was entirely free until 1976. Forty years later, tuition accounted for nearly half of its total funding. The growth in prices has been even higher for private colleges and universities, where tuition regularly tops $50,000 per year, not including room and board.
Rising tuition costs have mostly resulted from precipitous cuts in public funding over the last 30 years, combined with college over-expansions. As the budget holes grew larger, tuition increases became the go-to source to fill them. Much of that tuition revenue comes in the form of federally subsidized lending. Today, 45 million borrowers collectively owe more than $1.5 trillion on student loans. Student debt now stands ahead of credit cards and auto loans as the second-highest consumer debt category—behind only mortgages.
Business was good so long as the bubble kept inflating. Universities followed a simple mantra: If you build it, they will come. Fancy dorms and other consumption amenities would draw students to glitzy campuses, and their tuition and room-and-board payments along with them.
In theory, the cost of college bears some relationship to a family’s resources, but that calculus has changed in recent years.
Alas, having brought the values of corporate entrepreneurship to higher education, university leaders are suddenly confronting a glaring flaw in their business model characteristic of the market’s boom-bust cycle: They find themselves stuck with huge fixed costs and a collapsing consumer market.
WHAT IS THE price of college? The opacity of the current system makes answers to that question difficult. Tuition today works much like an airplane ticket: You may have paid five or ten times as much as the person sitting in the seat next to you.
In theory, the cost of college bears some relationship to a family’s resources, but that calculus has changed in recent years. In their race for college rankings, schools frequently offer steep discounts to students with high SAT scores—a metric essentially correlated with family income. The most sophisticated families will shop around, as though buying a car, encouraging small-scale bidding wars among colleges to knock the price of tuition down as low as they can get it.
It is hard to exaggerate the effect the U.S. News & World Report rankings have on American higher education. Administrators’ jobs depend on the rankings, and they go to extraordinary efforts to game the system. They fight to keep students from transferring out, which hurts rankings, with retention specialists who rival anything Comcast can muster. Administrative fiats keep class sizes under the arbitrary cutoff of 19 to count as small, which helps rankings—but only in the fall, when U.S. News counts them.
Meanwhile, admissions offices encourage students with no chance of admittance to apply, thereby boosting selectivity numbers. Enrollment management teams bid on students with high SAT scores in the form of merit scholarships. Applicants with low SAT scores who can pay their way are sent into off-campus bridge programs for the fall—a tuition-paying gap semester often in exotic foreign locations—technically making them transfer students and not counting against the U.S. News statistics. (How did the U.S. News rankers miss this gambit?) The creativity of some of these tactics to exploit loopholes in the U.S. News algorithm becomes the stuff of campus lore.
Although most of these efforts bear only the most tenuous connection to the quality of a school’s education, they become the highest institutional priority—far higher than improving the actual pedagogical experience—because higher rankings mean a better ability to attract students who can pay full freight. They also mean bonuses for top administrators.
The rising numbers of students who qualify for financial aid or other discounts put ever more pressure on universities to find students willing and able to pay the sticker price, driving the competition for students from the top 1 percent. It becomes a vicious cycle: Swanky dorms and farm-to-table food serve as enticements for those who can pay, creating ever greater imperatives to spend more, resulting in an ever greater need for paying customers.
To supplement their tuition revenues, many universities have turned to the lucrative market of international students, who are ineligible for financial aid. The number of international students grows as the pool of Americans who can afford to pay full price wanes. In the 2018-2019 academic year, the number of foreigners enrolled in American universities topped one million, exceeding 5 percent of all students. More than one-third come from China. Surely it’s a strange irony that we rely on wealthy Chinese families to subsidize the education of poor American families because government policy refuses to step in.
Already suffering from years of budget cuts, state and community colleges were the first to announce that their classes this fall would go online.
At selective universities, the numbers of foreign students rise far higher. At Boston University, for instance, the number of foreign students has more than doubled since 2010. They currently account for one of five undergraduates, and more than 30 percent of the total student population. The numbers are similar at New York University, which prides itself on having the largest number of international students in the United States. Many STEM (science, technology, engineering, and math) and business school programs now rely largely on foreign students to keep their budgets out of the red. One administrator at Northeastern University even has a title fit for a multinational pharmaceutical company: “associate vice president for international enrollment management and dean of the Office of Global Services.”
The foreign-student market was already under stress from the fallout of President Donald Trump’s policies. COVID-19 has just accelerated the trend. Now anticipating a sharp drop in foreign students, university administrators are panicking. The Johns Hopkins Carey Business School, where foreigners account for 90 percent of the student body, just announced a “pivot to the domestic market,” cut 10 percent of its staff, and slashed the student services programs that had catered to its huge body of foreign students.
With university officials burning the furniture to heat their homes, getting tuition-paying students onto campus could hardly be a higher priority—and not just for the universities themselves, but also for the millions of people who work for them and for the economic benefits that redound to local communities in towns and cities across the country.
Steven Senne/AP Photo
At Boston University, a staff member places safe-distancing signage on glass doors on the school’s campus, May 21, 2020. Boston University is among a growing number of universities making plans to bring students back to campus this fall.
A DEEPER, existential question looms over these debates: What is the college experience?
Here, it’s worth pausing to dwell on the diverse landscape of American higher education. At the risk of oversimplifying, it would be possible to divide American universities—at least as they relate to the pandemic—into three camps.
On one end of the spectrum, we find the institutions that educate the vast majority of American students. One might not know it from reading the pages of The New York Times, but the four-year residential college experience constitutes a minority of higher education. More than 40 percent of college students attend community colleges, while public universities award more than two-thirds of bachelor’s degrees.
Today, almost half of students are food-insecure, and 22 percent are routinely hungry. Fifteen percent are homeless—a number that rises to 20 percent in high-rent California. Many of these are commuter schools and branch campuses of large public systems, where students earn their degrees as working adults, veterans, single mothers, and other “nontraditional” categories.
Consider Wright State University, a medium-sized public university in Ohio, where in-state tuition now costs over $9,000. Thirty-eight percent of full-time undergraduates receive Pell grants. Sixty-two percent take out student loans. One-third of the students will leave after their first year; one-third will receive their degrees within six. Just 19 percent of students live on campus.
Even as they take on crushing debt loads, these students, often the first generation in their families to attend college, sacrifice to complete their education, many of them working part- or even full-time jobs. The problem here is not lazy students overspending on avocado toast brunches. So difficult were the conditions at Wright State that even the faculty went on strike after accusations of years of financial mismanagement.
The University of Akron, meanwhile, recently cut over 15 percent of its full-time professors, along with dozens of staff. But COVID-19 is only part of the cause. Those layoffs follow a major restructuring in 2018 that abolished 80 academic programs. Administrators say the most recent cuts will save the university $16.4 million. The local chapter of the American Association of University Professors notes that over the last ten years, the university has annually lost $21.5 million on its athletic programs.
Already suffering from years of budget cuts, these state and community colleges—with their nonresident students and their finances largely untethered from room-and-board fees—were the first to announce that their classes this fall would go online. The California State system, which educates 482,000 students, made the decision in May, before the last academic year had even ended. Wright State is letting faculty choose how they prefer to teach, with many choosing to go online. For Wright State and institutions like it, the pandemic is less an existential crisis than one more in an ongoing series of indignities that seem likely to continue long after a vaccine for COVID-19 is found.
No one knows what American higher education will look like when the COVID-19 crisis recedes. One semester of online classes was financially difficult. Two will prove ruinous.
On the other end of the spectrum are the ultra-competitive elite colleges and universities. Although they may constitute a minority, these institutions retain huge cultural and economic power. For poor families, they stand as one of the very few quasi-guaranteed on-ramps into the middle class. For those already in the anxiety-ridden middle class, they stand as security against the relentless downward mobility of the contemporary American economy. Such anxieties stretch high up the social ladder, as testified by the college scandals that saw wealthy parents buying their children’s way into elite universities through million-dollar payoffs to consultants and coaches.
A few of these institutions are so wealthy they can afford to shrug off a few years of tuition revenue. Yale generates just 5 percent of its revenue in tuition and fees; Princeton, just 3 percent. On any given day, the value of Yale’s $30 billion endowment might fluctuate by more than its annual tuition income. Little surprise that Harvard and Princeton went ahead and announced that their courses would all be online. For them, the COVID-19 disruptions are more of a hassle than an existential threat.
In the middle camp lie the large numbers of private liberal arts colleges and research universities. The COVID-19 fallout will hit these the hardest. Squeezed by the pressure to reopen campus and maintain their tuition and room-and-board revenue, few private colleges seriously considered moving all their classes online. Sincerely committed as they might be to the mission and model of liberal arts instruction, the financial imperatives here are too pressing.
Xavier University, a small Jesuit college just outside Cincinnati with about 5,000 students, is 73 percent dependent on its tuition revenue. It found itself losing $1 million per week when its students moved out of their dorms. Given the university’s modest reserves, those losses very quickly translate to ruinous cuts. There was little debate about the question: Classes this fall will be in-person.
Faced with similar pressures, Oberlin College has launched aggressive austerity measures. Notwithstanding its rich history of social activism—not to mention its $887 million endowment, which pays out more than $3 million in investment management fees annually—it took an extraordinarily bellicose posture in negotiations with its unionized food service and custodial workers. Although they offered extensive cuts in salary and benefits, Oberlin is firing them anyway, outsourcing their jobs to a Minneapolis-based private contractor, prompting an alumni campaign to withhold donations to the college and give the money to laid-off workers.
Even much larger and wealthier private universities, with their billion-dollar endowments, rely to a surprising extent on tuition to keep themselves afloat. In her April op-ed in The New York Times, Brown University President Christina Paxson baldly framed the imperative to reopen campuses as a business problem. Although it recently received a $1.8 billion donation from Michael Bloomberg to pay for financial aid, Johns Hopkins University has also been pushing hard to get as much of its undergraduate teaching in-person as possible—much to the alarm of some of its own public-health faculty. It has even posted slick videos worthy of a product launch, emphasizing how excited everyone is to return to campus in the fall.
No one knows what American higher education will look like when the COVID-19 crisis recedes. One semester of online classes was financially difficult. Two will prove ruinous. More would be apocalyptic. We urgently need deep reflection about what kind of university system we hope will exist when the COVID-19 crisis passes. The danger isn’t just that we’ll return to the former commodified state. It’s that when it’s all over, we risk being left with a university system that mirrors the inequalities of American life: a small handful of exceptionally wealthy institutions on the one hand, and a large number of underfunded public institutions on the other, their clientele gradually poached by rapacious and exploitative for-profit universities serving their paymasters on Wall Street.
One of the last redoubts of social mobility in American life may be on its way out.
IF SO MANY colleges and universities have turned their education into a commodity, some have also, and perhaps paradoxically, fought on the margins to ensure some minimal access to their goods. A good deal of administrative energy on campuses today is driven by the necessity to mitigate, if only modestly, the ruthless inequities of American life. If opening campuses this fall is more than a business imperative in any respect, it is on behalf of these efforts.
With the college admissions game tilted so heavily in favor of wealthy families—with their tutors, admissions consultants, access to fancy internships, and so much else—universities have undertaken enormous efforts to overcome the very barriers they have helped put into place. One of the most impressive and sincere efforts is the attempt to expand the pool of “FGLI” students: those from first-generation, lower-income backgrounds.
A good deal of administrative energy on campuses today is driven by the necessity to mitigate, if only modestly, the ruthless inequities of American life.
These students represent one of the few ways in which elite higher education has not simply become a giant engine reproducing the American class system. Perhaps because of the rigidity of that class system, however, universities have learned that these students need more than just a key to the ivory tower; they both want and need substantial support once they enter.
For its FGLI students (and many others), universities now provide social services of all kinds, from housing to academic support to health care to legal protection against gender discrimination. Campuses have become mini–welfare states unto themselves: an archipelago of small islands of solidarity that temporarily shelter their residents from the harsh realities of American life. Small armies of administrators and staff engage in extremely labor-intensive activities, all in the Sisyphean struggle to overcome the giant structural gaps the country has produced among children by the age of 18.
Maintaining these campus-based efforts became a major preoccupation when students were sent home this spring. Should they stay home in the fall, such efforts to remedy the huge structural disadvantages of FGLI students at elite campuses will be severely handicapped. Ironically, at those institutions where FGLI students constitute a majority, and which provide a lesser shelter from the gross American inequality so exacerbated by COVID-19, the shift to online education is likely to be significantly less disruptive. For FGLI students at residential universities, by contrast, campus closures will hurt the most.
One begins to understand, then, the mind-boggling complexity of the campus reopening debate. In the end, what it mostly highlights are the ways in which the world of higher education, both elite and non-elite, now carries more weight in repairing the ills of American society than it should have to bear. Three-quarters luxury good, one-quarter welfare state, the elite American university system was already crumbling under its own contradictions.
Much as one wants to pity those university officials, it is hard to feel sorry for those who collaborated so willfully in the destructive trends that turned American higher education into a consumer good. Like the executives at companies thrown into bankruptcy, university presidents will walk away with their lavish pay packages while their institutions crash and burn.
Après moi, le déluge.
