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In Learning Innovation and the Future of Higher Education, we argue that we are living through an inflection point in teaching and learning. We called this shift a turn to learning.
We build the case that despite the range of challenges faced by higher education (public disinvestment, demographics, cost disease, etc.), advances in teaching and learning have constituted a largely unrecognized positive trend.
Only months after publishing our book, we find ourselves in the midst of a pandemic that has changed everything about higher education in the present.
How teaching and learning will be affected by the ecosystemwide financial consequences of the virus is the question that is certainly keeping the two of us up at night. We suspect that the economic consequences of COVID-19 to our higher education ecosystem of colleges and universities will range from damaging to devastating.
Schools that had previously thought themselves at least somewhat insulated from worrisome demographic, competitive and cost trends will face budget challenges on par with -- or comparatively worse than -- the experience of the 2008 recession.
For those colleges and universities that were already threading a narrow needle of balancing costs and revenues, COVID-19 may drive up the former while simultaneously precipitously eroding the latter.
The impact of the pandemic on master’s degree programs is one area of widespread concern. In normal times, revenues from master’s programs are countercyclical. In times of higher unemployment, the opportunity costs for investing in an advanced credential are lower. The attraction of upgrading one’s human capital through a post-undergraduate degree, and therefore positioning oneself to compete for scarcer jobs, is also elevated in a recession.
With the erosion of state-level funding, and the need to increase undergraduate tuition discounting to fill classes, revenues from master’s programs have taken on greater levels of importance in the finances of many institutions. Between 2000 and 2017, the number of master’s degrees awarded in the U.S. almost doubled, from about 473,000 to 805,000.
This increase in the demand for master’s degrees has been driven by, at least in part, a commensurate doubling in the types of master’s degrees that colleges and universities are offering. The rise of specialized master’s programs, designed to segment and capture greater market share, has increased from under 800 in the mid-1980s to over 1,000 in 2005. And unlike undergraduate programs, master’s students seldom receive tuition discounts.
We are at a too-early stage in COVID-19 to have data on the impact of the pandemic on demand for master’s programs. Based on what we are hearing from colleagues across a wide range of institutions, however, we are starting to worry. Anecdotally, we are hearing about significantly lower levels of both demonstrated interest and applications to master’s programs.
The jump in unemployment, and the rise in family caregiving responsibilities for newly homeschooling children, may be occurring too rapidly for working-age adults to prioritize future-oriented actions. Everyone is trying to make it through the day. This shock to the system may cause a near- to medium-term erosion of long-term planning and investments, including investing in advanced credentials.
The combination of significant drops in the demand for master’s programs (should that drop materialize), coupled with generally rising institutional costs as schools shift to remote learning and decreasing revenues from residence halls and other fees, will almost certainly strain the budgets of many colleges and universities. For schools already operating with little financial cushion, COVID-19 may pose an existential threat to their continued viability.
Until we have that conversation, can you share what you are seeing at your institution on the potential financial impacts of COVID-19?
How do you think the pandemic will impact the future of teaching and learning?
