Over the last decade, higher education in America has faced an intense amount of scrutiny. Rising costs and increasing levels of student loan debt, coupled with falling academic rigor, have prompted some tough questions for America’s colleges and universities, but enrollment continues to climb.
Although alternative pathways to good-paying jobs have sprung up in recent years, most are still considered far outside the mainstream pathway of college as a route to a successful career. However, as the coronavirus pandemic continues to change different aspects of everyday life, one of its most lasting consequences could be how it changes the way Americans think about higher education.
The primary point of contention is the fact that the cost of attending a 4-year university has skyrocketed compared to the cost of attendance for previous generations. College tuition has more than doubled since the 1980s—outpacing any increases in the payoff graduates can expect from attending—and those rising costs have saddled millions with a substantial amount of debt.
Student loan debt now totals almost $1.6 trillion and is the second highest category of consumer debt, behind only mortgages. There are currently 44.7 million Americans paying off student loan debts and the median amount of debt is $17,000. Furthermore, unlike most other kinds of debt, student loan debt (often taken on in the late teens or early twenties) can rarely be discharged during bankruptcy proceedings.
Meanwhile, the academic rigor of the institutions has fallen precipitously. Grade inflation has increased unchecked for decades. A nationwide study of the history of college grading finds that an A grade was awarded in colleges nationwide 15 percent of the time during the early 1960s. However, an A is now the most common grade given and the percentage of A’s has tripled, to 45 percent nationwide. Currently, 75 percent of all grades awarded now are either A’s and B’s. This has meant that modern students rarely face incentives to work as hard as students from previous generations. According to economists Philip Babcock and Mindy Marks, compared to today’s students, “students in the middle of the 20th century spent nearly 50% more time—around 40 hours weekly—studying.”
The data are easily corroborated by frequent anecdotes from veteran college professors. Writing in the Wall Street Journal, Ohio University professor Richard Vedder explained, “I’m part of the problem: I’ve been teaching for 55 years, and I assign far less reading, demand less writing, and give higher grades than I did two generations ago.” On a podcast, Brown University professor Glenn Loury described the distinctly different nature of grades and modern higher education compared to previous generations:
You can find an education in the university. You can find one at Brown. You can find one at Berkeley or Stanford. But you can also spend four years there and not learn a God-d*mn thing worth knowing and come out with a degree. Grade inflation. Grade inflation is a horrible corruption, in my opinion. …
There's no turning back, man. There is no turning back, but it's--I now have to basically anticipate the possibility that a kid's going to go home and take a bottle of pills or something if I give him a C.
You know, 'You've ruined my life: I'll never get in the law school, I'll never get into medical school. Professor Loury, you can't do this to me, you can't do this,' you know, whatever. And, I say, 'Man, look at that paper that you wrote. You didn't write a very good paper. I'm sorry.' But, I end up with the B anyway, half the time, because I just can't do it.
Despite these well-documented developments, the wage premium associated with obtaining a college degree remains high and millions of new students enroll each year. Furthermore, employers are increasingly requiring a college degree for positions that did not require one in the past (and likely do not require one now).
This phenomenon, known as degree inflation, severely and unnecessarily limits the potential for those without a college degree to access higher- or increasingly even middle-income career paths. Moreover, the practice is likely also disadvantageous for employers, who are both unnecessarily paying wage premiums for college educated workers, hiring workers who have disproportionally high turnover rates, and narrowing the field of potential employees. Relatively few employers have dropped these requirements, although there are some recent examples of top tier companies, such as Google and Apple, that have. Perhaps more will follow suit in the future, but for the most part, employers seem content to keep such requirements in place.
The result is a rather bleak status quo, with employers wasting resources, students saddling themselves with increasingly burdensome amounts of debt, and the institutions of higher education delivering less actual education to their students. All the while, the credential gap is fueling a deepening economic division between Americans. Rather than college delivering students a wage premium—as is often touted by proponents—a labor market penalty for non-attendance seems more accurate. But with employers insisting on a degree for desirable jobs and considerable government subsidies ensuring a seemingly endless supply of new enrollees, the cycle appeared unlikely to change anytime soon.
Then the coronavirus pandemic swept the nation. With (often very valid) concerns about spreading the virus and endangering both students and faculty, many colleges and universities are considering a transition from in-person classes to either entirely virtual classes or some sort of hybrid approach.
The Chronicle of Higher Education is tracking how universities intend to operate for the Fall 2020 semester and has compiled a database of nearly 3,000 colleges. As of this writing, only 23.5 percent of colleges are planning to conduct classes either fully or primarily in person, with 26.8 percent reporting they plan to conduct classes either fully or primarily online, and a substantial 27 percent reporting that plans are still “TBD.”
With many universities closed for the Fall 2020 semester, a greater number of graduating high school students are already considering taking a gap year. Complicating matters further, a recent survey of US college students finds that 93 percent say tuition should be lowered if classes are online. The same survey also found that “75% of college students are unhappy with the quality of online classes and 35% have considered withdrawing from school.” While some colleges have lowered their tuition in response to moving classes to an online format, many have been quick to point out that moving classes online does not translate to lower costs for the institution.
For smaller colleges that can’t afford even relatively small drops in enrollment, the changes brought by the pandemic could mean that closing their doors permanently. While it’s too early to make sweeping claims about how the pandemic will change the nature of higher education in America, these trends suggest that students are more open to alternatives to the 4-year college pathway to employment than they have been in recent memory.
Fortunately, several promising alternatives have been gaining ground over the past several years and the disruption in typical higher education could be the catalyst that pushes such alternatives further into the mainstream.
One of the most successful alternatives is Lambda School, an online school that trains students to become web developers or data scientists. It first became popular with its pioneering use of income share agreements (ISAs) to offer students a way to enroll and learn the necessary skills for a successful career without paying tuition up front. Instead, payments are only made after the student becomes employed and earns above a certain level of income (aligning the incentive for both the student and the school). Lambda School offers a 9-month full-time program or an 18-month part-time program and has successfully placed its graduates in well-paying jobs at top tier companies, earning a reputation for being a highly effective alternative to the traditional 4-year college model. In response to the ongoing pandemic, Lambda School has even reduced its upfront tuition by 50 percent.
Another promising alternative is Praxis. Rather than offering a degree, Praxis offers a one-year program that includes six months of hands on skill building followed by at least six months of time building skills and a track record in a job. Participants can either pay upfront or defer payment until after they have landed a job—and Praxis will even return the cost of tuition if a graduate of the bootcamp is unable to find a job within 6 months. The focus is on building skills and gaining real-world experience that result in a starting point for a successful career while bypassing the credential-focused approach of traditional higher education. Already well-suited to students interested in taking a gap year, Praxis is an interesting up-and-coming alternative for those unsure whether the traditional 4-year college route would be a good fit for them.
The typical career pathway of getting a degree at a traditional 4-year college is not likely to change anytime soon, not least because the institutions of higher education enjoy so much taxpayer support. But as the pandemic continues to push students toward alternatives, the pitfalls of the traditional approach to higher education will become increasingly difficult to ignore.
As the scrutiny on the institutions of higher education builds and more Americans become disenchanted with the model, there may come a tipping point that results in a range of interesting and effective alternatives. The decisions made by students in the midst of the pandemic could be a significant step toward that future.