10 Takeaways From NYU Professor’s Prediction That Covid-19 Permanently Changes College Education
College education will never be the same, according to NYU professor Scott Galloway.
Galloway has been right about more than a thing or two.
In 2017, the marketing guru and professor at the New York University Stern School of Business anticipated Amazon’s $13.7 billion purchase of Whole Foods a month before it was officially announced. In 2019, he called out WeWork’s “seriously loco” $47-billion valuation a month before the company’s IPO collapsed.
Now, Galloway, who penned the New York Times bestseller, “The Four: The Hidden DNA of Apple, Amazon, Facebook, and Google,” says the covid-19 epidemic has ushered big tech into higher education. Colleges, he says, will never be the same.
Galloway founded Prophet, a brand and marketing consultancy; Red Envelope, one of the earliest e-commerce sites and digital intelligence firms; and L2 Inc, which was acquired in 2017 by Gartner for $155 million. Firebrand Partners, Galloway’s now-defunct activist hedge fund, invested more than $1 billion in U.S. consumer and media companies.
Here are 10 takeaways from Galloway’s prediction that covid-19 will permanently change college education.
According to Galloway, the post-pandemic future will include partnerships between the largest tech companies worldwide and elite universities. Galloway, who founded his own virtual classroom startup, says these partnerships will let universities expand enrollment dramatically by offering hybrid online-offline degrees. The affordability and value of these partnerships “will seismically alter the landscape of higher education,” New York Magazine reported.
“Ultimately, universities are going to partner with companies to help them expand. I think that partnership will look something like MIT and Google partnering, Microsoft and Berkeley,” Galloway said. “Big-tech companies are about to enter education and health care in a big way, not because they want to but because they have to.”
No school today
Galloway predicts hundreds, if not thousands, of brick-and-mortar universities will go out of business, New York Magazine reported. The schools that survive will have student bodies composed primarily of the children of the 1 percent — America’s richest.
Realization: Education is overpriced
The coronavirus has given people time to analyze the cost of tuition versus the actual school work. “There’s this horrific awakening being delivered via Zoom of just how substandard and overpriced education is at every level,” Galloway told New York Magazine.
With students having to use tools like Zoom to attend class, they will question college costs. If classes were in-person, they have a fuller, more worthy learning experience.
“But on Zoom people are going to discover I was never worth $100,000 per class…172 kids x $7,000 tuition / 12 classes = $100,000 per class session,” Galloway wrote in his blog, “No Mercy/No Malice.”
Registrations will drop
Deposits and registrations for the fall semester are down 10 to 30 percent, Galloway told New York Magazine. “The better universities are fine in the short term because they just fill spots from the waiting lists. The kid who’s going to Boston College will get into MIT. But if that snakes down the supply chain, and you start getting to universities that don’t have waiting lists, those are the ones that get hit.”
Education is business
“Let’s talk about higher education and make some predictions. An industry projected to register $10 trillion globally by 2030, may see the future happen faster,” Galloway wrote in his blog, “No Mercy/No Malice.”
In order to survive as a business, colleges may have to team up with tech. “MIT, Amherst, Dartmouth — they all have the money to not sacrifice any standards. At the same time, their trustees aren’t going to want them running inefficient businesses, where they have to dip into their endowment every year. Endowments are supposed to be for big, bold projects that result in additional cash appreciation. Most of those universities aren’t going to have trustees who say, ‘OK, here’s $2 million a year for emergency operating expenses.’ They’re not going to do that. They’re going to decide they need to run a real business,” Galloway told New York Magazine.
Change of course
If universities do partner with big tech, the curriculum would most likely change with big tech being able to give students a unique experience. “The second-greatest accretion of stakeholder value in business, behind Amazon’s entry into healthcare, will be big (and some small) tech firms partnering with a world-class university to offer 80 percent of a traditional four-year degree for 50 percent of the price. This is the gangster cocktail of the fastest-growing analog consumer brands in history (Southwest Airlines, Old Navy, etc.),” Galloway wrote in “No Mercy/No Malice.”
He added, “MIT/Google could offer a two-year degree in STEM. The myth/magic of campuses and geography is no longer a constraining factor — most programs will be hybrid soon, dramatically increasing enrollments among the best brands. MIT/Google could enroll 100,000 kids at $100,000 in tuition (a bargain), yielding $5 billion a year (two-year program) that would have margins rivaling … MIT and Google. Bocconi/Apple, Carnegie Mellon/Amazon, UCLA/Netflix, Berkeley/Microsoft…you get the idea.”
The education product
Galloway said he thinks MIT and Google will be able to create an online curriculum that will be worth paying tens of thousands of dollars or hundreds of thousands of dollars. “Yeah, because they’ll have some sort of hybrid model that will involve some in-person work. MIT’s certification — and that education that it’ll be able to string together using its faculty and its brand and the technology of a place like Google — will still be worth that kind of money. The reality is an MIT degree is still worth a quarter of a million dollars in tuition. But is Boston College worth a quarter of a million? I don’t know,” Galloway told The New York magazine.
So if higher education goes online, what will happen to college campuses? “I worry they’ll still exist, but they’ll be just filled with rich people,” Galloway said in an interview with NY Magazine. “A four-year liberal-arts-campus experience is going to become something that’s largely relegated and positioned to the children of rich people.”
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Education more available
According to Galloway, educational opportunities will be open to more people. Those who previously could not afford a college education might be able to afford to pursue an online degree. “I want to be clear: There is some social good to this,” Galloway told NY magazine. “You’re going to have a lot of good education, dispersed to millions and tens of millions of people who otherwise wouldn’t have access to computer science or Yale’s class on happiness. When I got into UCLA, about one in three, or 40 percent of students, got in. Now it’s something like one in seven. More kids are going to get into great schools.”
Which schools will survive?
“It will be like department stores in 2018. Everyone will recognize they’re going out of business, but it will take longer than people think,” Galloway told NY Magazine. “There will be a lot of zombie universities. Alumni will step in to help. They’ll cut costs to figure out how to stay alive, but they’ll effectively be the walking dead. I don’t think you’re going to see massive shutdowns, but there’s going to be a strain on tier-two colleges.”