The COVID-19 pandemic will stimulate change but there are areas that were already being disrupted for which the outbreak will be like lighting a match to a powder keg. One such area is post-secondary education. Multiple large-scale factors were in place and the bulk of the education system was beginning to adapt to changes that were about to occur. Now, these changes may take place almost overnight!
The Hustle is a daily newsletter that studies market trends for which I have immeasurable admiration and thanks. One strength is its simplicity. See the chart here for example. It cleanly illustrates my first point: university is unaffordable to most. The easy money of student loans which is now in the $1.5 trillion range according to Forbes is causing economic stress. I leave it to you to find a comfortable metaphor for how much $1.5 trillion totals. My best is that a 1 million people earning $50 thousand a year would take 30 years to earn enough to pay off that debt! They would pay no taxes, buy no cars and eat nothing during that time – not even Ramen noodles!
The other side of the 4 year institution equation is value. Here we have the “match being lit” so to speak. Already, families were beginning to doubt the value of a 4-year degree because students were not finding employment in their field of study. Next, employers had all but given up on finding enough qualified employees for fields that were critical! A match made in hell! What could be worse? Ask the graduating class of 2020 who paid too much for degrees in low-demand fields. What are their job prospects? The Hustle provides two case studies in real world instances. Students who live on Ramen and Hope have had to pivot to survival mode. Their faith in the college dream is dashed – to them “4-years and a great job” is a myth.
Another critical factor is what I will call “meeting the market need”. Simply, what do people need and/or want? We have already established that 2020 grads may be poorly matched to available jobs as we swoop out of the COVID-19 recession. They will need quickly retrained at no cost to students. Let’s add adults to this mix. A sharp spike in unemployment and company bankruptcies will lead to the same market pressure: adults will need retained, quickly and at no cost.
The opportunity that this will bring after a significant percentage of 4-year institutions pivot or fail is for community and technical college programs and even high schools. Over the past 15 years, career education (CTE) has retooled and modernized. Gone are the vo-techs of the past. They have been replaced with modern facilities that provide students with credentials that are meaningful to employers. That last sentence means there are jobs for these graduates. Immediately in many cases! These are mid to high wage jobs. Some are traditional programs like those in the business-related cluster. Many are in fields like cybersecurity, AI, and IoT (Internet of Things). Advance Manufacturing is now done in clean rooms with robot arms like that shown here. Agriculture now involves satellites and drones.
This megatrend will evolve quickly into disruption over the next 5 years. Do you agree, disagree or have something to add? What has you experience been – has it been like the girls in The Hustle article? What are some fields I have not mentioned that are in-demand and require a credential in lieu of a 4-year degree? Below I am embedding an “old” video on the new economy to illustrate the factors in place BEFORE the crisis. I hope you enjoy and are enriched!