Forty years ago, going to college in America was a reliable pathway for upward mobility. Today, it has become yet another 21st-century symbol of privilege for the wealthy. Through this period, tuition rates soared 260 percent,double the rate of inflation. In 2019, the average cost of attending a four-year private college was over $200,000. For a four-year public college, it was over $100,000. To sustain these prices, more students are now admittedfrom the top 1 percent of the income scale than the entire bottom 40 percent at the top 80 colleges. Universities have also opened the floodgates to wealthy international students, willing to pay full tuition for the American brand.
Covid-19 is about to ravage that business model. Mass unemployment is looming large and is likely to put college out of reach for many. With America now the epicenter of the pandemic and bungling its response, many students are looking to defer enrollment. Foreign students are questioning whether to register at all, with greater uncertainty around visas and work prospects. The “Trump Effect” had already begun to cause declining foreign student enrollment over the past three years.
The mightiest of institutions are bracing for the worst. Harvard, home to the country’s largest endowment, recently announceddrastic steps to manage the fallout, including salary cuts for its leadership, hiring freezes and cuts in discretionary spending. Most other universities have been forced to make similar decisions, and are nervous that if they continue with online teaching this fall, students will demand at least a partial remission of tuition.
Up until now, online education has been relegated to the equivalent of a hobby at most universities. With the pandemic, it has become a backup plan. But if universities embrace this moment strategically, online education could expand access exponentially and drop its cost by magnitudes — all while shoring up revenues for universities in a way that is more recession-proof, policy-proof and pandemic-proof.