The Covid-19 pandemic forced colleges to shift to online learning, often with disastrous results. Students are no fools and many of them are suing for a discount. They have realized what higher education is loath to admit: Instruction is not what they, their parents and the American taxpayer are paying full price for.
The most common discount on offer appears to be a 10% tuition reduction, but some students are pushing for far more. They claim that nonacademic activities, from school plays and concerts to networking and parties, represent a lot more than 10% of the price tag of college. Such discounts imply that students are still getting 90% of the value of higher education (about $45,000 worth, on average) from their Zoom lectures, but much of the educational content has become widely available for free. Students and parents can’t be faulted for suspecting that an online education should cost next to nothing.
At some institutions, it already does. Primarily online Southern New Hampshire University recently announced a free first year for incoming students in light of the pandemic. California-based National University—which offers an array of online classes—cut tuition by up to 25% for full-time students and says that new scholarships will make enrollment nearly free for Pell Grant-eligible students.
Can the pandemic finally bring the traditional college pricing model to its knees? Or will these examples remain outliers?
Insight into the future of higher education may come from an unlikely source: the brokerage industry. Like higher ed, stock trading is a highly regulated field with massive barriers to change. Recall the stereotypical stockbrokers of the 1980s: Tom Wolfe’s “Masters of the Universe” or Merrill Lynch’s “Thundering Herd.” For years, the traditional brokerage industry was considered too difficult to replicate with technology. How could the internet replace a white-shoe adviser who not only took trade orders but also answered the phone, offered personal advice and took part in estate planning and other higher-order wealth-management tasks?
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