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Why College Is Never Coming Back

Politics / Education Jul 27, 2020 - 05:33 PM GMT

By: Stephen_McBride

Politics

Here’s some great news: one of America’s most broken industries is finally being exposed as a sham. And make no mistake, the end of college as we know it is a great thing.

It’s great for families, who’ll save money and take on less debt putting kids through school. It’s great for kids, who’ll no longer be lured into the socialist indoctrination centers that many American campuses have become. And as I’ll show you, it’s great for investors, who stand to make a killing on the companies that’ll disrupt college for good.


But Stephen, how can you be against education?! I love learning, but I hate what college has become. As recently as 1980, you could get a four-year bachelor’s degree at a public school for less than $10,000. These days, it’ll cost you $40,000 at a minimum, $140,000 for a private school, or well over $250,000 for a top school.

College costs have ballooned beyond all reason. They’ve risen even faster than healthcare costs, which is really saying something. Kids are burying themselves in debt—$1.6 trillion at last count—in order to attend college.

When I wrote about this last year, I had little hope things would change anytime soon. Why? It’s a tough sell to convince an 18-year-old kid not to attend the four-year party all his friends are going to, especially when the US government is financing it through student loans.

But a Lightning Bolt of Disruption Just Fried the Business Model of College

Mark my words: coronavirus will be remembered for transforming college forever. The virus has forced practically every college to move their courses online for the next semester. So instead of living on campus and walking to lectures, kids will be sitting in their bedrooms watching professors on Zoom calls.

This is FAR more disruptive than most folks realize. College is about much more than just the learning. There’s the education, and then you have the experience. The learning part has barely changed in a century. Kids still sit in 60-year-old lecture halls listening to professors.

But now, the “experience” has been stripped away. Do you think teenagers will be willing to mortgage their futures in order to watch college lecture videos on the internet?

This Is the End of College as We Know It

Right now, millions of kids are questioning what they’re paying tens of thousands of dollars for. NOBODY is willing to pay $30,000/year to watch lecturers on Zoom calls. In fact, tuitions are already falling.

New data shows colleges reopening “online only” this Fall have slashed costs by $9,000, on average. How many kids will jump at the chance to save themselves tens of thousands of dollars in tuition with online learning? My prediction: millions.

In fact, by slashing tuitions for online courses, schools have permanently changed the perception of what college is worth.

Here's My Prediction for How the Disruption of College Will Play Out

Millions of American kids will soon be able to complete degrees­—fully online—for way less than the cost of traditional college. But they won’t just be enrolling in Ohio State or University of Florida’s “online classes.”

With learning shifting onto the internet, there’s nothing stopping nimble disruptors from offering real college degrees at much cheaper prices.

2U (TWOU) runs online classes for 73 of the world’s best colleges including Yale, Cambridge, Georgetown, and NYU. It’s only a matter of time before online disruptors like 2U or Coursera start offering their own degree courses.

For example, they could hire world-class professors to create online courses for, say, $200,000/year. Each professor might teach 250 students per school year, which works out to roughly $800 per student. Tack on the cost of running the online course, plus a profit for the college, and you could probably charge each student $3,000/year.

These courses would carry the same qualification as any regular college. Yet, tuitions could be slashed by 70–80%. Right now, every US state has a couple of big schools and dozens of little ones. And they’re essentially all teaching the same material in a slightly different way.

I Expect Online Disruptors Will Put Many of the 4,000 “Middle-of-the-Road” US Colleges Out of Business

Top schools like Harvard, Yale, and Stanford will always attract elite kids and command huge tuitions. They are disruption proof. But the thousands of schools that sell “standard issue” degrees for tens of thousands of dollars are in for a rude awakening.

Think of them as the new department stores. You know how unspecialized, middle of the road retailers like Macy’s and Sears are dying off? Nimble online schools will do to traditional colleges what Amazon did to department stores.

This is a change every American kid should be cheering for.

The Great Disruptors: 3 Breakthrough Stocks Set to Double Your Money"
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By Stephen McBride

http://www.riskhedge.com

© 2020 Copyright Stephen McBride - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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