The University sector is going to get wrecked by the coronavirus
In recent years, universities in Britain, Canada, Australia and the USA have been relying on foreign students to make their money.
In Britain for example, universities can only charge a maximum of £9000 per annum for tuition to someone from the UK. But they can charge a foreign student whatever they like (whatever they feel the foreign student market will pay), and so for degrees at the top universities, they easily charge £20,000 or more per annum.
Lots of universities therefore have up to half their students coming in from abroad because of how lucrative it is.
The coronavirus crisis that put all this into jeopardy.
The lockdowns have closed many universities, who have had to refund tuition if they are unable to offer classes online. Some students have simply dropped out - many Chinese students who went to China for the Spring Festival earlier in the year, never returned to their western universities.
Going forward, how many students are going to risk going abroad to study? Will they reason to themselves that as they are young, their chances of getting seriously ill from the virus is low? Or will they decide to stay close to home?
It hasn't helped that universities have been spending like drunken sailors on unimportant things: flashy gyms and sports halls got a lot of money thrown at them. Not much money was socked away in a reserve for a rainy day.
If things don't go back to normal in September, many universities will be cutting staff. And some of the weaker universities will end up closing altogether. The university sector is going to look completely different in a few years time.
Technological shifts are going to destroy the industry.
Look for most education to start to take place online. The idea of going away for 4 years to get a degree so that you can just get a job makes no sense.
But for a few disciplines, most can be done online. This will really explode as video conferencing improves greatly.
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I agree. The thing is, people won't pay the same for online learning as they do for face-to-face tuition. So unless they lower the standards for who gets into the university, in order to get the number of students up, these universities are going to be making a fraction of the money they used to make.
There will be a lot of them that go out of business.
In the United States, I am guessing more than 30% of the for profit universities go under. I would surmise it is the same all over the world.
Posted Using LeoFinance
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