One of the areas that is of great interest to me is the future of higher education as well as education in independent schools. My concern is summarized by two words, shiny things. We became aware of this in the example of the downfall of the University of the Arts in Philly. In a short period of time, the president resigned, and the board could not articulate the source of the problem. The students, faculty, and alumni no longer had a home. They had no time to make plans for their fall term as the closure occurred without much notice.
In addition to this we learned that John Fry, President of Drexel, became President of Temple. Early this week the Inquirer posted an article on his leaving Drexel and what he left behind. Drexel is cutting staff and benefits as it faces a 63 million dollars operating losses and 15 percent fewer first year students. This is no difference from what is going on with private equity firms buying medical practices to make money. The first thing they do is cut staff and services to the patients. The doctor receives a large check up front, and the equity firm makes a quick dollar. Who is it that suffers? The remaining staff and patients, the reason that they are in business in the first place. In one situation that I am aware of the equity firm not only cut staff and services but refused to give the staff raises since the firm took over.
It is unfortunate that colleges deal with a great deal of real estate to have a shiny thing to stand out in the competitive marketplace. Fry is the embodiment of this movement as well as various boards as his background is in business, but his work at Penn, Franklin and Marshall, and Drexel was to expand the real estate portfolio of these places of higher learning.
But there is something that created classism at these institutions as well as a business model that just can’t sustain itself in the future. The people who are suffering from a bad business model that is supposed to have leadership so that the students have what they need instead they get to look at shiny things. It is the student who must pay the debt where the school keeps moving forward with tuition costs going through the roof. There is no such thing as lowering of the cost of education coming to their rescue. This model is putting education on the edge of a cliff and produces the ongoing classism that exists in America. Where is your middle-class kid going to get the best education possible?
The answer is not to forgive student loans, however well-intentioned that is, for it just divides our nation between the haves and have nots as some people bit the bullet and worked hard or went to a less dynamic learning environment and others are resented now for the free lunch that they received because of a change in administration in Washington. It is not equitable.
At least 84 public or nonprofit colleges have announced, closed, or merged since March 2020. This has impacted 48,720 students. 80% of nonprofit colleges closed between 2004-2020. At this rate education in higher education and in independent schools is not sustainable. Of course, this does not affect schools with high endowments such as the Ivy League or St. Paul’s, Exeter, Choate and others with high endowments. At Penn a year’s study costs $85,738. They are heavily endowed and really don’t have to worry about marketing. You see this clearly in that they have a 7% acceptance rate. Coupled with this is the fact that there will be less people in the future population to want an education because of a changing population dynamic.
Notice with Drexel being an example that the cost come from cuts to faculty and staff while top heavy administrators received high salaries. The deficits are often done by real estate ambitions. So, who pays for this? The student in tuition driven schools. Then they get caught up in the get rich quick antics of student loan businesses where much has been written about their unsavory financial practices. What needs to be examined are what is driving the cost of education?
I don’t believe that everyone should go to college as what is received on the back end too often contains knowledge that doesn’t equip someone from doing what they want to do and earn a living. In the recent strike by the longshoreman, they can earn with overtime more than many who chase the fiction that an academic degree can guarantee you will have financial security. Sure, a liberal education is needed, but how will it equip a student for future employment.
In essence, education needs to move from an infrastructure which is top heavy with administration and the creation of more and more shiny things to focus more on the interface between faculty and student.
I have repeated my theme repeatedly that ethics involves money. Follow the money, and it will lead you to the ethical issues. This is a crisis in education that needs to be addressed now.
Here is a blog post from my son, Thaddeus, about the closing of the University of the Arts. It explored a number of the themes I raise above. He is the founder of Social Impact Commons. His work today at Social Impact Commons is helping nonprofit organizations share resources in the interest of greater efficiency, equity, and impact in the charitable sector. His area of expertise lies in nonprofit business models, economic trends in the charitable sector, and restructuring of nonprofit organizations.
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