
Clayton Christensen: Half of U.S. colleges will be bankrupt in 10 to 15 years - uptown
https://www.cnbc.com/2018/08/30/hbs-prof-says-half-of-us-colleges-will-be-bankrupt-in-10-to-15-years.html
======
jedberg
I'm of two minds on this. One the one hand, nothing can replicate the college
experience of:

\- Living in a building with a bunch of other 18-22 year olds

\- Living in a town that is mostly populated by 18-22 year olds

\- Having to figure out how to take care of the laundry and dishes while
having time to study and go to parties with said 18-22 year olds.

That being said, I'm currently doing YCs startup school, which is run very
similarly to the large lectures I had in college. There is a main weekly
lecture or two that is viewable online, and then there is a small group
discussion with 15 or so others, led by a "TA". The discussion happens online
but is live at a scheduled time (conveniently for me at 7pm).

As a 41 year old with kids, this system has a lot of advantages for me. I can
watch the lectures at night after they go to bed, I can watch them in double
speed so that I can done quicker and my mind doesn't get bored and wander, and
I can do the discussion section from pretty much anywhere with internet.

So I think overall this system is better for me now, but if I were 18, I don't
think I'd prefer it.

~~~
nogbit
Nothing? Ever heard of the US DOD (Department of Defense)? It has many
branches, each of which is full of 18-22 year old volunteers, who are getting
paid to do exactly the 3 bullets you mentioned. The key difference is they are
getting paid vs. having to pay...and, they get that experience in numerous
cities/towns over the course of 4 years. Some branches are more like the
college life than others (USAF, from my experience).

Granted it's not an apples to apples comparison here, but there are less
expensive and more efficient ways (Peace Corp as well) of getting that
experience. Universities are (should be) for those that enjoy learning or must
have that 4 year certificate for the field there interested in working in.

~~~
TheBeardKing
The main difference there being subject to persistent and total authority vs a
high degree of freedom requiring personal initiative.

~~~
dx87
You've got the wrong idea regarding western militaries, there is a very big
focus on individual initiative. Contrary to the popular belief on this site,
people in the military aren't brainless drones who only joined because they
had no prospects after high school. A common saying I heard in the USMC was
"Tell your Marines what to do, not how to do it. They'll suprise you with
their creativity." Yes, you ultimately don't have any say in what task has to
be done, but leaders who don't let their subordinates take initiative and
figure out the best way to achieve that task are considered poor leaders. I've
seen multiple articles about military hacker spaces opening up for junior
enlisted to get creative with new solutions to problems. 3D printing is also
starting to become more popular with enlisted personnel since it allows to
them to make temporary replacements for easily broken parts instead of
potentially having to wait weeks for an official replacement to arrive.
Examples I can remember are the fan in the air intake of an M1A1 Abrahms, and
switches on the control panel of their cargo planes.

~~~
tcbawo
In the military, you probably don't get to change your mind and do something
different on a whim. And there's the whole killing/being killed thing.

------
glangdale
The standard criticism of Christensen's work on disruption is that it applies
better to products sold to business than those sold to consumers. The
perennial failure of Apple to die as per his predictions is a case in point.

He seems to have jumped into the "online resources will cause the traditional
university to fail" bandwagon a bit late. I haven't heard that much hype about
MOOCs lately, presumably because the dire completion rates have cleared out
the hype circa 2013.

It wouldn't surprise me if he's right, but not for the right reasons. Half of
US colleges could go bankrupt in 10-15 years simply because they don't really
provide a good education. They won't be replaced by a disruptor, they will
just no longer be able to crank out mediocre educational product to people who
now realize that a Bachelor of Something Or Other from Podunk U isn't actually
a ticket to the middle class.

~~~
lev99
> They won't be replaced by a disruptor, they will just no longer be able to
> crank out mediocre educational product to people who now realize that a
> Bachelor of Something Or Other from Podunk U isn't actually a ticket to the
> middle class.

A lot of people say this, but a College Education has an excellent ROI when
you look at median earnings of college graduates vs median earnings of high
school graduates.

Some majors such as accounting and engineering offer even better ROIs. Some
entire industries, such as Education, are almost entirely blocked to someone
without a college degree. Lifelong earning numbers are correlation and not
causation. We've all meet great engineers that did not complete college.
Still, as long as college graduates are out earning high school graduates by
significant amounts colleges will not have to worry about attracting new
students.

~~~
glangdale
You mention correlation and causation here already, but perhaps you should
take it further? A typical college graduate has considerably more factors in
their favor to the typical high-school-only graduate even before accounting
for the effect of an education.

The big question is, given a _particular_ student, will they do better with a
college education? I think the answer is probably 'yes' if they are able
enough to go to a decent (not necessarily stellar) school. However, there is a
vast educational hinterland offering terrible courses to weak students. These
are propped up by subsidies and the idea that "any college education is better
than none".

~~~
lev99
> The big question is, given a particular student, will they do better with a
> college education?

Maybe, it's really hard to measure. I suspect a good not great college is a
very good way to improve a particular person's life, but not the absolute
optimal use of four years and about $30,000.

While this question is really important for individuals to ask, I don't think
this question is going to destroy institutions of higher learning. I think a
lot of people will still take the relatively safe path of completing a four
year degree.

~~~
glangdale
I absolutely agree with you about "good not great" colleges probably working
out pretty well for people. I would imagine that these will survive. It's the
bottom half/third/quarter (not sure how far it will hit) that will have
problems, in my opinion.

~~~
lev99
Most bottom performing companies will have problems, especially on industry
downsides.

------
znpy
The flaw is, imho, in the fact that we are talking about _business models_.

If you look at thriving universities in Europe, in thriving countries (like
Finland, Sweden and Norway) you might see that they are basically run at loss:
this is because education is an investment, not an expense.

Education is supposed to be an investment for nations, not individuals (or,
more realistically, parents of individuals).

~~~
TheBeardKing
The assumption being that it's the government's job to invest in individuals.
I'm not here to argue either way, but at least half the country would disagree
that it is.

~~~
vkou
> The assumption being that it's the government's job to invest in
> individuals. I'm not here to argue either way, but at least half the country
> would disagree that it is.

Why is the government involved in teaching children how to read, write, do
arithmetic, and sit in a chair for 8 hours a day, then?

Absolute ideological opposition to government involvement in education -
period - is a fringe opinion, that is at best, shared by ~5% of the country -
not 50%. (Much of the 50% disagrees about the curriculum, but that's another
story.)

~~~
TheBeardKing
We're obviously talking about higher education here. We all agree basic
functioning citizens need 12 years of education. Educational attainment beyond
that varies depending on occupation requirements and personal interest.

~~~
vkou
Given the problems that people without post-secondary degrees face, I don't
think it's a stretch to say that productive, functioning citizens need 12 +
??? years of education.

For every example you give of a successful college dropout, I can give an
example of a successful person who only forced themselves to slog through 12
years of schooling for the sake of social signaling, and not running afoul of
truancy laws.

------
projectramo
I wonder if there some other services that colleges provide that he misses
out:

1\. Space just to get away and think

2\. meeting other people

3\. meeting people to date

4\. Physical scheduled deadlines to ensure that you complete the task

When the online system provides those, I think it'll be game over.

I can see a hybrid though: my underused hotel turns into a dorm with high
bandwidth connection to Stanford's curriculum and the local professor will
give coaching when necessary.

~~~
sevensor
Let's not forget where big public universities have really been spending their
(and their donors') money lately:

5\. Luxury student dorms.

6\. High-end gym facilities.

7\. Junior professional sports (Bonus: pay and benefits for the athletes is
peanuts.)

The things I don't like about universities are the hardest to replace.

~~~
tnecniv
> Junior professional sports (Bonus: pay and benefits for the athletes is
> peanuts.)

While they don't get money, the athletes at top schools do get compensated in
plenty of ways, including tuition, access to world class facilities, and
individualized attention from coaches and staff.

~~~
s73v3r_
Until they get hurt, when they're cast aside like yesterday's trash.

------
aluminussoma
He's been saying this since 2013, sticking the 15 year horizon (which would
now leave 10 years): "Fifteen years from now more than half of the
universities will be in bankruptcy, including the state schools. In the end, I
am excited to see that happen." (source:
[https://www.bizjournals.com/sanjose/news/2013/02/07/disrupti...](https://www.bizjournals.com/sanjose/news/2013/02/07/disruption-
guru-christensen-why.html))

Even if he is directionally correct, he could be way off on the timing.

------
Kagerjay
This doesn't really surprise me. There are so many terrible, and sometimes
predatory for-profit tradeschool/colleges out there. State tuition
scholarships are only getting worse over time, MOOC's are only getting better,
and branching out into larger fields. Many for-profit colleges/tradeschools
are using lynda.com and other partnerships with MOOCs anyhow.

Grad schools are now offering online equivalents that are treated seriously
(e.g. Georgia Tech especially) at affordable rates.

Even when I had courses in university, sometimes there was an online version
of every class. Why spend the effort of going to class, getting ready, when
you can just watch everything at 2x playback speed?

There are some classes that require hands on learning. But these are far and
inbetween, and mostly are STEM related anyhow. You can't replace the
collaborative experience, social connections of a college campus. And wisdom
from an instructor, or those connections. But you don't need to go through
that twice (grad school - unless for research) and tuition costs for online
grad degrees are only lowering down for these

~~~
ThrustVectoring
MOOCs aren't the competition for colleges: higher education largely sells
credentials, not skills.

The risk is a mix of a decline in credentialism (eg, no longer wanting a
college degree for babysitting or firefighting jobs) and a rise in an
independent credentialing bodies (like what actuaries have).

~~~
hak8or
Georgia tech is one of the best comp sci universities out there, and their
online masters program is not only accredited, it's indistinguishable from the
on site masters program. The peice of paper does not diffirentiate between the
two.

So the credentials are there for Georgia tech, I do not know about the others
though.

------
two2two
> Fortunately, Christensen says that there is one thing that online education
> will not be able to replace. In his research, he found that most of the
> successful alumni who gave generous donations to their alma maters did so
> because a specific professor or coach inspired them.

This is still my argument for in-person lectures. Online classes are okay, but
the insights gained from the unexplainable passion presented through oration
provides unparalleled value to one's motivation and internal framework.

~~~
crispyambulance
Lectures from professors who are supremely skilled at pedagogy are great.
Lucky students will have only a handful of those in their academic careers.
These can, however, be recorded. It might not be as electrifying as the real
thing, but the real thing is so rare.

There are other activities that simply can't be done alone, however:
laboratory classes, recitations and interactions where the students engage at
a personal level with professors, TA's and other students. This is how
students develop relationships that they carry with them past their time in
academia.

There is room, I think, for a hybrid approach. A combination of online
learning with some kind of periodic on-site and in-person practicum. This
drastically lowers the cost of the education, but still engages students on a
personal level.

~~~
tdfx
One of my CS professors used the "flipped classroom" technique. He would
assign the readings and expect them to be done by the time of the scheduled
class. Then we would jointly do exercises and collaborate on the topics that
were touched upon in the readings. He was ruthless if it was obvious you
hadn't done the reading. It was effective.

I think one or two days a week for 2 hours is the perfect amount of lab/in-
person collaboration time. Combined with an online forum for questions and
video lectures, that would be an ideal course of instruction for me.

------
monster_group
One thing I don't get about online schools and courses is their lack of
laboratory facilities. How is a student supposed to do engineering or natural
sciences without labs? When I was doing engineering we used to spend so much
time in labs doing experiments on expensive machines (electron microscope,
X-ray diffractor etc.) that costs hundreds of thousands of dollars. For me the
real learning happened in the lab. How do MOOC and online courses plan to fill
this gap?

~~~
dantheman
99% of course work students do doesn't actually involve labs.

I could see dedicated lab facilities being provided to students taking a MOOC
or some other class.

~~~
monster_group
Apparently even good universities like UT Austin don't care about labs
anymore. They offer an online grad degree in Mechanical Engineering with no
lab work! Imagine calling yourself a mechanical engineer without having set a
foot in the lab.

[https://executive.engr.utexas.edu/pme/msme.php](https://executive.engr.utexas.edu/pme/msme.php)

~~~
btrettel
I am a PhD student at UT Austin in mechanical engineering right now. The MS
does not require a lab class in either case. In my division, thermal/fluid
systems, you can take either a class on experimental methods or a class on
numerical methods (or both if you want) for a MS. Both are required for a PhD.

[http://www.me.utexas.edu/graduate/areas/tfs/courses](http://www.me.utexas.edu/graduate/areas/tfs/courses)

Multiple lab courses are required for a BS in mechanical engineering at UT.

------
apo
The interesting thing about the marketplace disruption model is how difficult
it can be to distinguish disruptive from sustaining innovations in their early
phases.

Take electric cars, an example that Christensen has talked about in his books.
He viewed electric cars as a disruptive innovation.

However, few of the predictions about the electric car market from this
perspective have held up. Tesla, the upstart, attacked the market from the top
end, not the bottom end with luxury cars. The company now has formidable
competitors in major auto makers including Mercades, and GM. Electric cars are
still pricy and appeal to an upmarket customer base willing to sacrifice range
for other factors.

Christensen's blueprint for the electric car industry was attack from the
bottom. Focus on markets where inexpensive, short range vehicles are an
advantage. He offers parents buying a first car for their kids as an example.

But that's not how things have played out. It turns out that replacing a
combustion-based powertrain with an electric one allows established players to
continue using the same business model that got them where they are. Petroleum
companies may be disrupted in the changeover to EVs, but that has little to do
with automakers who at the end of the day make a bug hunk of metal and plastic
for moving people around and sell it on credit.

It's tempting to think of online universities in much the same way as
Christensen thought about electric cars: as a disruptive innovation.

What if online universities are instead sustaining innovations that will allow
incumbents to preserve their existing business models (selling prestige and a
credential to families with college-age children) while proving hostile to
startups hoping to break in?

~~~
wahern

      However, few of the predictions about the electric car market from this perspective have held up
    

Clayton Christensen making predictions throws me through a loop. I feel like
he misunderstood his own thesis. My take away from Innovator's Dilemma was
that (1) at every step of the game the most economically rational, profit
maximizing strategy is to ride your successful business model all the way to
the cliff and (2) you _cannot_ predict what will become disruptive because
success is context dependent, path dependent, and highly dynamic. If you could
foresee all those interdependencies you could make a fortune in the stock
market over night; but you can't. Something appears disruptive only in
retrospect; beforehand it's just one among several competing alternatives,
most or all of which will be forgotten.

His big solution at the end of the Innovator's Dilemma was GE-style
conglomerates that spun off small ventures to test new ideas free from parent
companies' economic calculus. But look at where GE and similar corporations
mentioned in the book are now. That strategy does nothing to overcome the
fundamental impediments to perpetual business success. Failure is inevitable,
period. The only real "solution" is a financial market that can quickly
reallocate capital to the manifest winners. The more efficient that capital
and labor markets become, the less of an advantage large conglomerates will
enjoy. But it all comes down to allocation of resources _subsequent_ to the
emergence of identifiable market trends.

I never bothered to read his other books because what was the point? He was
_right_ in the first-half of the Innovator's Dilemma; everything he wrote
after that was a contradiction.

------
fiftyfifty
People here seem to think Christensen is saying higher ed is dying, but I
don't think that is the point he is making. Flagship state schools and the
Stanfords, MITs and Princetons of the world will be just fine, but there are
many small, private, liberal arts colleges (often with a religious
affiliation) that are in a big trouble financially. Many of these schools are
fairly expensive at 30k a year or more and they are having a really hard time
attracting students. This article has a lot more details about this trend:

[https://www.insidehighered.com/news/2017/11/13/spate-
recent-...](https://www.insidehighered.com/news/2017/11/13/spate-recent-
college-closures-has-some-seeing-long-predicted-consolidation-taking)

Something like 30% of the colleges in the US have less than 1,000 students and
those are the schools that are in trouble, a drop in enrollment for a school
that size is a death knell:

[https://www.chronicle.com/article/The-Real-Reason-Small-
Coll...](https://www.chronicle.com/article/The-Real-Reason-Small-
Colleges/236732)

Many of these schools haven't changed their curriculum in decades, in fact
they can't even give a reasonable definition to the term "Liberal Arts" and
with costs so high parents and students are expecting a little bit more to
justify the investment.

[https://hechingerreport.org/with-enrollment-sliding-
liberal-...](https://hechingerreport.org/with-enrollment-sliding-liberal-arts-
colleges-struggle-to-make-a-case-for-themselves/)

Personally I think the way we handle higher education in the US is totally
backwards; get the degree and then try to figure out what to do for the rest
of your life? What the heck kind of plan is that? If someone came to you with
a business plan written like some of these kid's plans for the future would
you invest $200,000 in their business? And yet somehow we loan kids money to
pursue this plan and/or parents spend the money to fund it. It is absolutely
insane that this has gone on as long as it has. Imagine if these kids had to
submit a 10-20 year plan before they could take a out a student loan?

~~~
wahern

      Imagine if these kids had to submit a 10-20 year plan before they could take a out a student loan?
    

Imagine if you had to pick a major when you were 6 years old. _That_ would be
insane. (Insane is a poor choice of words because this is effectively the case
in many countries for cultural reasons, but in the context of U.S. culture
would be considered imprudent and impractical.)

In a society like the United States where employees are expendable and life-
time employment will involve numerous different companies and positions,
there's something to be said for a generalist education. If the U.S. had an
industrial policy like Germany than a German-style educational model would
make much more sense. But the U.S. has consistently rejected those policies,
despite decades of economists of all stripes advising politicians to do so.
(The same is true to a lesser extent in the rest of the Anglosphere, which not
coincidentally also have higher education models more similar to the U.S. than
continental Europe and much of the rest of the world.) Therefore, employers
will value the more generalist approach. In the U.S. a 4-year biology degree
matters not because of what it says about your knowledge in biology, but
largely because it shows you persevered through 2+ years of writing, history,
etc. In other words, you had the discipline to take up other subjects you
didn't explicitly _choose_ ; not only pass their exams but to go to the
classes (i.e. show-up!) and do the coursework (obey orders). And, ideally, it
would show that you can integrate and apply those disciplines and
methodologies to various tasks. (This is more aspirational.)

------
ryandrake
How does this make sense given the astronomical year-to-year increases in
college costs with no end in sight? Where is all the money going? I assume
ballooning administrations.

~~~
secabeen
> How does this make sense given the astronomical year-to-year increases in
> college costs with no end in sight?

Do you have a citation for the above increases? There have been big increases
at state schools as state governments have reduced funding, but that's mostly
over (there's much less state funding to cut now.) Nameplate cost at private
institutions has gone up, but net cost to students (actual amounts paid by
students after grants and financial aid) has not gone up that much.

~~~
ashelmire
[https://www.usnews.com/education/best-colleges/paying-for-
co...](https://www.usnews.com/education/best-colleges/paying-for-
college/articles/2017-09-20/see-20-years-of-tuition-growth-at-national-
universities)

>net cost to students (actual amounts paid by students after grants and
financial aid) has not gone up that much.

I'm skeptical of that claim and would request a citation as well. College
Board says the opposite (tuition and fees increasing faster than aid):
[https://www.insidehighered.com/news/2017/10/25/tuition-
and-f...](https://www.insidehighered.com/news/2017/10/25/tuition-and-fees-
still-rising-faster-aid-college-board-report-shows)

And another important set of expenses to track are non-tuition related
expenses; it costs more than ever to rent an apartment and pay for other such
expenses today.

~~~
secabeen
So the US News graphs don't adjust for inflation (as they note). If you
perform that adjustment, it's a 50% increase over 20 years, which is
something, but not astronomical. That pretty much matches this inflation-
adjusted data: [https://trends.collegeboard.org/college-pricing/figures-
tabl...](https://trends.collegeboard.org/college-pricing/figures-
tables/tuition-fees-room-and-board-over-time)

Here's the net cost data, showing that the net real cost is only up about 10%
over 5 years. Some sub-numbers are even lower. Net tuition for private non-
profit schools is _flat_ across the last 15 years ($14,560 in 02-03, $14,540
in 17-18): [https://trends.collegeboard.org/college-pricing/figures-
tabl...](https://trends.collegeboard.org/college-pricing/figures-
tables/average-net-price-over-time-full-time-students-sector)

My argument is that college prices are up, but largely because of
disinvestment by state legislatures, pushing up the perceived cost of college,
which allows the private schools to increase their nameplate costs
significantly, while using financial aid to keep the actual increases to
students in-line with the increases in actual costs for state students.

Another way of looking at it is this: If colleges have been raising tuition
astronomically, what have they been doing with the additional money?
Additional expenditures on students or facilities are not much changed over
the past 10 years. Real expenses per-student are largely flat:
[https://nces.ed.gov/programs/digest/d16/tables/dt16_334.10.a...](https://nces.ed.gov/programs/digest/d16/tables/dt16_334.10.asp)

If colleges were jacking prices through the roof to spend way more on
unnecessary luxuries or administrators (as the common wisdom would have it),
that would show up in the expenditures data, and it's just not there.

I do agree that non-tuition related expenses are an issue, but that's not the
university's fault, other than not building dorms fast enough (and dorms are
usually pretty expensive, so it's just as likely that the issue is zoning and
building restrictions by university town government, rather than university
administrators).

------
koolba
Just wait and see what happens when they cut off federal student loans. That’d
pull the rug out from under the higher ed house of cards much faster than
10-15 years.

------
Zigurd
The title is clickbait. Enough third tier schools will in fact fail to give it
the aura of plausibility. And if the US becomes more hostile and closed to
foreign students, we _could_ totally screw this up.

But rising economies around the world will produce a lot more high quality
students than their home countries' elite universities can absorb, and that
will provide enough customers for good quality universities in the US. There
will also be a market for children of wealthy families who can't make it into
very selective schools. Probably for 30 years+. Beyond that, US schools will
face more competition, but a global middle class will continue to grow.

~~~
DoreenMichele
I don't have any sources at my fingertips, but the US has some of the most
lenient college admissions for "adult" students of any country on the planet.
In some countries, if you haven't decided on a college track by, say, middle
school, then you are going to a trade school, not college. And it's tough in
many countries to get into school at all later if you didn't get all your
ducks in a row for college right out of high school.

In contrast, the US makes it easier to go back to school past a certain age.
So a lot of foreigners go to school here because you basically need enough
money to pull it off. There are a lot of fewer things that automatically slam
the door shut in your face because you didn't do a thing at age 13 or
whatever.

Disclaimer: I haven't read the article. I'm just replying to what is in this
comment and agreeing that the US will likely continue to educate the world for
the foreseeable future.

------
mrnobody_67
Charlie Munger quotes--

“There’s a lot wrong [with American universities]. I’d remove 3/4 of the
faculty — everything but the hard sciences. But nobody’s going to do that, so
we’ll have to live with the defects. It’s amazing how wrongheaded [the
teaching is]. There is fatal disconnectedness. You have these squirrelly
people in each department who don’t see the big picture.”

“I think liberal art faculties at major universities have views that are not
very sound, at least on public policy issues — they may know a lot of French
[however].”

"Teaching people formulas that don’t really work in real life is a disaster
for the world.”

------
cosmosa
In my opinion moocs have a long way to go to be comparable to an in person
experience. First of all the execution of the pre-recorded lectures is not
nearly as good as in person. Writing on the board vs seeing slides and hearing
a voice vs seeing someone talk in person is very different. The pacing of the
pre-recorded lectures is very mechanical as I'm sure it's tough teaching a
camera, whereas in person it is pretty natural. The ability to ask questions
in class really helps too. Not meeting with other students/tas/professors in
person really has a bad outcome on learning.

------
j45
Education + colleges have been my full-time area of research and work for the
past 12 months:

\- The funnel of how we access learning has changed, and colleges are further
down on the bottom of the funnel. Many are already losing money each year.

\- Traditional education seems simply not able to keep up with the rate of
change in society.

\- How the majority of people today learn something, or acquire
knowledge/skill/competency seems to be distinctly changing:

1) Find something on Google/Youtube. Failing that,

2) Find a small e-course. Failing that,

3) Find a larger e-course. Failing that,

4) If there's a lot of courses we discover we need, we look for perhaps a
micro-credential or small course. Failing that,

5) If our need is beyond what a micro-course can provide, we may look at a
program in a community college, polytechnic, etc.

\- Academically speaking, the future of education is not solely online, or
offline, or blended. These are dated academic concepts that don't cover the
70% of learning that is informal and occurs outside of the classroom. People
just find a way to learn now, or share knowledge.

\- We can't replace instructors, or instruction, we need to better support the
instructors who are willing to learn digital skills. Many refuse. We have a
lot of educators trying to use technology but not competent with it's
capabilities or possibilities.

\- The future of education is about creating better digital learning
interactions that can evolve and update with the rate of change of best
pracice in a domain. That domain will be digitally supported, whether it's
digital classrooms, digital textbooks (of sorts), or digital learning, all
powered through human connection.

\- Education can't keep up with speed. Lots of topics are emerging and
changing faster than ever before. A 2000 year old model of higher education
will need to evolve, because knowledge and how to apply it is evolving quicker
than traditional education can.

\- Traditional colleges, while still very relevant, will have a diminished
role in the most emergent or changing educational topics.

This isn't new, but I think the change will come not from the top or the
bottom of the pyramid, but from the side at all levels. There are many good
pockets of activity occurring, and while they don't make a suit quite yet...

------
Dowwie
Bankruptcy isn't a bad idea for universities. They're not supposed to be for-
profit corporations, although many have run them as such. Bankruptcy _could_
help schools restructure their operations, but that requires that boards of
directors haven't been captured by financial interests.

~~~
neuromantik8086
> Bankruptcy isn't a bad idea for universities.

It's important to note that the way university finances / endowments are
structured, as well as the demands of alumni make it so that bankruptcy isn't
really that simple in higher ed. [0]

> They're not supposed to be for-profit corporations

I suspect that you don't totally grasp the non-profit vs for-profit
distinction. The essential difference between a for-profit and a non-profit is
simply that non-profits re-invest their profits into the organization rather
than distributing those profits to shareholders. The original intent of this
structure was to facilitate philanthropic endeavors (which have pretty much
always been self-serving in some subtle way), but just because a non-profit
corporation isn't associated with some obvious social benefit doesn't make it
any less of a non-profit if it doesn't have shareholders.

It's not always obvious, but Rolex and Ikea are both structured as non-profits
(with some for-profit subsidiaries iirc).

[0]
[https://en.wikipedia.org/wiki/Sweet_Briar_College#2015_closu...](https://en.wikipedia.org/wiki/Sweet_Briar_College#2015_closure_attempt)

~~~
dragonwriter
> The essential difference between a for-profit and a non-profit is simply
> that non-profits re-invest their profits into the organization rather than
> distributing those profits to shareholders

They can't distribute to shareholders, but they aren't required to reinvest.
What exactly they can do, with profits or more generally, depends on the
specific _class_ of nonprofit they are.

~~~
neuromantik8086
Didn't know that, but admittedly even my notions of how non-profits are
structured is only slightly deeper than the popular notion of what non-profits
are supposed to be. I mostly just wish we'd all disabuse ourselves of the
notion that non-profits are always meant to promote some greater social cause.
Firsthand experience tells me that the statement "non-profit == good, for-
profit == evil" doesn't always hold up.

~~~
dragonwriter
> I mostly just wish we'd all disabuse ourselves of the notion that non-
> profits are always meant to promote some greater social cause.

There are classes of nonprofits for which this is not true (the NFL, for
instance, is one example of a nonprofit for which that is not true), sure, but
most of the cases where this comes up about US nonprofits the focus is usually
on specifically 501(c)3 charities for which this is specifically, by law,
true, as they must be organized and operated for some combination of a
specific enumerated list of purposes deemed socially desirable, which is the
whole reason that not only are the organizations themselves tax exempt, but
donations to them are tax deductible. Relevant to this conversation, that's
absolutely the norm for nonprofit institutions of higher education.

~~~
neuromantik8086
I'll admit my ignorance about the details, but I do stand by my belief that
non-profits are not always necessarily beneficial for society- I don't think
that's particularly controversial. In many cases, there's a substantial gap
between "deemed beneficial" and actually beneficial that most people don't
grasp because they've been indoctrinated to believe that non-profits can do no
wrong. More discerning folks will pore over 990s and ratings on Charity
Navigator.

~~~
dragonwriter
> I do stand by my belief that non-profits are not always necessarily
> beneficial for society

That's a fairly non-controversial claim (even regarding specifically 501c3
orgs), but something being actually “beneficial to society” is not the same
thing as it being “meant to promote some greater social cause.”

------
spsrich
Excellent. Couldn't happen to a more deserving bunch.

------
jgamman
If we unbundle the courses and/or make MOOCS minimally OK - what's to stop
students hiring their own TA to help them through. So long as you pair this up
with a nationally recognised micro-credential framework you could see the
development of a "faculty" led small-school revival. Add in some sort of
matchmaker service at critical mass, some sort of pedagogy credential (how to
teach well, not what to teach) and education becomes a nice small business
opportunity for PhD holders.

------
JackFr
This is a pretty information light article. If we assume that college prices
are unsustainably high, and online courses achieve results comparable with a
large swath of universities, it's not clear whether he assumes theses schools
are unwilling or unable to respond to the changing environment.

He may well be right, but it would be foolish to think that these schools
don't see the same data he does, and that they're not going to at least try to
address it.

------
thdxr
Premise makes sense and I want this to happen but have to keep in mind we are
easily swayed by extrapolations that forecast doom. Probably won't be to the
extent he predicts

------
leroy_masochist
I think Christensen is generally right here.

Colleges exist as physical institutions for largely obsolete reasons:

1\. _Libraries_ \- pre-internet/digitization, a massive amount of human
knowledge lived solely in university libraries. The size and contents of a
given university's library was a very real driver of its value as an
educational institution. That may be marginally true today, especially in the
case of rare manuscripts and whatnot, but the competitive advantage of having
an expansive library is basically gone.

2\. _Recruiting_ \- Companies try to recruit new employees at universities for
several reasons. First, they're outsourcing basic candidate diligence to
admissions committees. Second, they see efficiency in putting the mouth of the
candidate funnel where there are lots of smart motivated young people in one
place. Third, alumni loyalty to alma mater is often very strong. However,
technology (electronic background checks, being able to look at a candidate's
repo, etc) has seriously degraded the AdCom's relative value in filtering for
people who are smart, not criminals, and can get authority figures to say nice
things about them. Similarly, technology has reduced to near-zero the
necessity of having face-to-face interaction during the initial stages of the
hiring process (employers will always want to do in-person final rounds, but
the need for in-person funnel-mouth events like career fairs / company
informational presentations / etc no longer exists as it did pre-internet).
Alumni loyalty will be far more sticky, but its importance will diminish over
time.

3\. _Professors_ \- just as the competitive moat provided by libraries was
largely destroyed by the internet, so too is professor access. You can talk
shop with many big-name academics on Twitter; you can watch their lectures on
Youtube; they will email you their papers if you email them to ask; etc. Is a
Twitter argument the same as visiting someone during their office hours? No,
but it's a big improvement on the previous status quo.

I think it's going to be a very, very hard landing for colleges over the next
couple decades as young people start making different decisions based on the
options available to them.

~~~
glup
Respectfully, I think analyses like this (there are many going back to the
90's at least) miss the -1st and 0th assets offered by elite universities:
signaling power of the institution itself, and the opportunity to live among
---and interact nearly continuously with--other full-time learners of diverse
backgrounds but of generally similar ability. Elite universities do not exist
to impart technical knowledge and skills (both can be obtained via many other
routes), but to propagate and modulate the class system by 1) sorting
individuals, 2) putting them in a warm fuzzy place where they can acculturate,
form new relationships, and figure out how they (and w/e domain they choose to
specialize in) relates to the broader array of institutions, and 3) providing
a succinct, society-wide signaling mechanism (not that it's
good/fair/accurate, just that it is widely accepted).

So far as I am aware, these deeper assets of universities are not under
threat. In my experience, people with strong technical skills from non-elite
educational routes end up working for people with weak technical skills from
elite universities, for a broad variety of reasons (esp. access to capital,
comfort in managerial positions). That said, I think we are at risk of seeing
the higher education system become increasingly bifurcated: winner-takes-all
dynamics gradually centralize power in a tiny number of elite universities
(there's a lot of work on this, that 2nd and 3rd tier colleges are under the
most financial stress) and a larger 'commodity' higher education system
focused on imparting skills (basically extended job training).

~~~
secabeen
> I think we are at risk of seeing the higher education system become
> increasingly bifurcated: winner-takes-all dynamics gradually centralize
> power in a tiny number of elite universities (there's a lot of work on this,
> that 2nd and 3rd tier colleges are under the most financial stress) and a
> larger 'commodity' higher education system focused on imparting skills
> (basically extended job training).

This is a pretty good analysis. Here in California, we have the community
college system, which I think fits the description of your 'commodity' system
quite well. We also have the Cal state schools, which I think don't, as much,
but CA does have a unique system compared to a lot of other states.

------
IkmoIkmo
Colleges will remain in business as long as businesses will use college
degrees as a meaningful qualification to hire talent.

Data has shown that companies have continued to use degrees beyond their
relation to actual tasks for the job they're hiring for. We've seen decades of
evidence that degree inflation is on the rise, signalled by vacancies
requiring a bachelor degree while the tasks are high school level. You can see
this either by doing a qualitative analysis, e.g. running surveys among
employees and categorising their job complexity and linking it to an
educational level. Here you find e.g. many administrative jobs which an 18
year old with 2 weeks of on the job training can do, require one to finish a 3
year bachelor in just about anything, first. But the more common methodology
is a quantitative one that's a little less accurate, but easier to perform.
Survey existing employees at a large firm about their educational credentials,
then survey vacancies for people in similar positions at such firms. You'll
find various occupations where 60% of vacancies require a certain credential
that only 20% of the employees have, indicating that many companies require
credentials that are apparently not necessary. And this is on the rise.

Then you can wonder why, and the answer is because they can. If you can choose
between a large pool of people who meet minimum qualifications, you have the
luxury to select overqualified people.

And that tendency by human resource managers isn't going to change anytime
soon, especially not when there's no significant salary premium companies have
to pay to get a person with a college graduate to do highschool level work,
over hiring a high school graduate. And I don't see that changing anytime soon
with increasing competitive pressure from technological advancement and
globalisation.

In the end, a college degree is moving more towards a signalling device that
shows socioeconomic background and interpersonal aspects such as grit,
stability, delayed gratification, and is less and less about signalling
subject matter knowledge, academic competencies etc. HR focuses more and more
on the former and not on the latter, when requiring a college degree.

As online education is more accessible and easier (i.e., less financially
straining, less psychologically straining, less socially challenging, but
rather at-your-own-pace learning behind your computer from anywhere), it's
typically viewed as not signalling the former aspects I just mentioned (grit,
delayed gratification) but mostly signalling the latter (knowledge etc).

That's why I don't necessarily think that online education is going to
supplant colleges from the outside as fast as we think. Of course it'll take
over eventually, but I think it'll be slow and will happen more from the
inside, by existing colleges, not just through disruption of new startups
which will bankrupt existing colleges.

Precisely because of a growing number of companies which have stopped using
college-degree requirements to hire for knowledge, and have started to require
college degrees to select for 'the type of person who has the background and
personal traits to be able to survive and complete college', which online
education doesn't signal as well.

------
pimmen
MOOCs have a staggering drop-out rate though, which I think makes predictions
about their disruption less clear cut.

[https://warwick.ac.uk/fac/sci/dcs/people/research/csrmaj/dan...](https://warwick.ac.uk/fac/sci/dcs/people/research/csrmaj/daniel_onah_edulearn14.pdf)

------
naveen99
well educational institutions are getting close to extracting most of their
ROI from education. if education costs a million dollars, it might make sense
for many to just invest the money, and skip the education and career, and go
straight to retirement.

------
throwawayperson
The same can be said to Boston housing market.

------
joaorico
This is a bit of a strange article.

First, "in his recent book" refers to his 2011 book [1]. And Christensen has
been prophesying this general bankruptcy "in the next decade" since that time.
[2]

In any case it's interesting to think about the larger argument of the future
of traditional higher education in general versus online education.

Bryan Caplan's thesis that (the state should cut funding for higher education
because) higher education is mostly about signalling 3 things is a good tool.
He argues that higher education signals a combination of intelligence,
conscientiousness and conformity. The combination of the 3 is crucial for the
model. [3]

Online education, and more generally self-education, fails on the conformity
side. Companies do not want in general to risk such non-conformists, when they
can hire from a stream of fresh graduates (smart, hard-working and relatively
conformist).

Also, I think the socialization, friendships and networking that happen in the
university are extremely valuable and not easily replaced by online education
(where and with who can a smart, driven 18 year old hang out while studying
and learning for 4 years on MOOCs and textbooks?)

And in addition, I hope, traditional universities are starting to improve
their teaching methods (eg, flipped classroom, peer instruction) to multiply
the pedagogical and motivational value they offer vs MOOCs.

For online education to replace traditional higher ed, it might require taking
into account these factors. Could something like workspaces for freelancers or
remote workers - but for studying - replace the traditional institution and
the above benefits? Such that, for example, you would not be seen as an
extreme non-conformist by not enrolling in a university?

Also, outside the US, tuition costs is often much lower. An online STEM
degree, say a certified online masters in software engineering such as
coursera or edx, could easily be more expensive than regular (or even the
best) university.

[1] [https://www.amazon.com/Innovative-University-Changing-
Higher...](https://www.amazon.com/Innovative-University-Changing-Higher-
Education/dp/1118063481)

[2]
[https://www.economist.com/international/2012/12/22/learning-...](https://www.economist.com/international/2012/12/22/learning-
new-lessons)

[3] [https://www.amazon.com/Case-against-Education-System-
Waste/d...](https://www.amazon.com/Case-against-Education-System-
Waste/dp/0691174652/)

(To be clear, he argues that from the individual's perspective, university is
still net positive, if you have what it takes to finish the degree and don't
get too much in debt. It's the state that should cut funding since it's
inflating credentials.)

------
irrational
Teenage pregnancy has been in a nose-dive because the teenagers are online
instead of hanging out these days (at least that is what I've read). If young
adults went to school online instead of getting together at college... no more
sex?

I'm reminded of some sci-fi stories I read in my youth about futuristic
societies where nobody interacted in person and babies came from the lab. At
the time the notion of people not having sex and babies anymore seemed far
fetched. Now... maybe not so unlikely after all.

