Hampshire College, alma mater of filmmaker Ken Burns, announced in April that it will close after the fall semester. Sterling College, a 130-acre working farm in northeastern Vermont, will graduate its final class in May. The Huron Consulting Group projects that 442 private nonprofit colleges enrolling roughly 670,000 students are at risk of closing or merging within a decade. The instinctive response is elegiac: lament the shuttered campus, mourn the futures it might have made, hope for rescue. Mr. Burns called Hampshire’s closing “an extraordinary loss.”
Is it just me, or is this good news for America? Closing these institutions means students are slowly ceasing to overpay for scant added value. If more market correction is to come, that tells us something important—about higher education and about other education sectors we have built to avoid correction altogether. The question isn’t how to save these institutions. It is how to accelerate market forces.
The private-college sector didn’t rise in a laissez-faire market. It was built by federal loan programs, the postwar college wage premium and decades of expanding demand. In that environment, “more college seats” and “more social value” came to mean the same thing. They weren’t.