By Bob Hildreth
Decreases in national birth rates have dealt fatal blows to both Toys”R” Us andWheelock College. Empty aisles and empty seats killed them. If low birth rates can destroy a national box store and a prestigious college what else may be vulnerable?
The frightening answer is almost every one of our colleges. All colleges are grappling for a while with the shrinking pool of students to select from, a problem they won’t go away anytime soon. This problem could not occur at a worse time as colleges also grapple with growing resistance to their high cost.
Soon after Wheelock collapsed into the arms of BU, we learned that Mount Ida and La Salle fell into each other arms for the same reasons. In reporting these stories, the media points to experts warning that more mergers and closures are coming. The truth is that all of our area colleges are battling each other to fill their seats. It is a zero sum game in which the losers will have no alternative but to shrink.
Toys“R”Us faced stiff competition from the technological prowess of Amazon. Similarly, our traditional colleges are losing potential students to online institutions like Southern University of New Hampshire and University of Phoenix, who offer courses without the overhead a physical campus must struggle to finance.
For over fifty years, colleges got used to raising tuition that was willingly paid by families scarfing up student loans to meet every increase. But that model is in serious trouble, with young graduates burdened by debt and struggling with defaults. Tuition hikes have outrun federal loan availability leaving families with huge gaps they must cover using their income,assets, or by borrowing parent Plus or private loans. The model is especially burdensome for diverse students who are facing more financial and academic challenges.
The result of this financial collapse falls on workers. Over half of Wheelock’s staff was let go while Toys “R” Us closed shop. College closures will be an economic tragedy to local employment, finances, and culture. Regrettably, it will be inevitable for some institutions.
To stop the bleeding we must bring the whole subject of college finance and student debt into the public square. Solutions will be tough because the prospect of a large non-repayment and default rates on the $1.4 trillion student debt is real, representing over 10% of our nation’s overall debt, a crippling sum. Whatever decisions emerge we must conclude that financing college with individual debt is not a good idea.