NYU professor rips colleges for being 'drunk on exclusivity,' says coronavirus will force change
A top marketing expert believes the coronavirus pandemic will accelerate the disruption of U.S. higher education that's been "drunk on exclusivity" and creating a "caste system."
The worldwide COVID-19 crisis has added fuel to a furious debate about colleges and universities. The crisis forced institutions of higher learning around the country to shut campuses, and engage in distance learning and virtual commencement.
It stoked a debate about whether students and parents will be inclined to continue paying top dollar for virtual campus life, especially with the fall session up in the air.
"No industry, other than health care, has raised its prices faster than education, and I'm part of the problem. We have become drunk on exclusivity," Scott Galloway, a business professor at NYU’s Stern School of Business, told Yahoo Finance in a wide-ranging interview on Monday.
He added: "When you have the head of Harvard admissions saying that he could double the freshman class at Harvard without sacrificing any quality, the correct question is, 'Well, with a $37 billion budget, why wouldn't you?'"
The NYU professor has predicted a disruption in education for several years. With COVID-19 resulting in students sheltering-in-place and finishing semesters online, the professor argues the current circumstances will accelerate the pace of change.
"[What] we're about to see in education is the disruption that we've been predicting for decades, as parents see via Zoom classes that paying $68,000 for their tuition, and what is actually going on in universities is no longer worth it,” according to Galloway.
“You're going to see a massive consolidation of the most powerful players, aided by big technology, and you're going to see an incredible destruction among the second and third-tier universities who have benefited from the cartel that is education," he added.
He also predicted that a lot of universities will not reopen campuses this fall because of COVID-19 — and some of them will never reopen. He chided schools for fashioning themselves as “luxury brands...as opposed to public servants.”
With the pandemic causing a rethink of many aspects of society, Galloway said exclusive schools like Massachusetts Institute of Technology would welcome vastly smaller classes within ten years.
That will “cause tremendous price pressure and disruption, and it couldn't happen to a nicer group of people," he added.
The problem, Galloway argued, is what people are really paying for five-figures a year in tuition is not an education, but a "certification" that accelerates some "into the upper echelons of what is a caste system that is largely dictated by your college degree."
And instead of expanding the number of students “we've decided we want to create a set of luxury brands, such that we can continue to offer more to the children of rich people.” The current dynamic will hasten change, the academic stated.
Galloway also slammed colleges and universities that have "preyed on the hopes and dreams of middle-class parents."
"We need to begin taxing endowments that don't grow their freshman class faster than population. They're not public servants. They shouldn't get tax deductions. They're luxury brands. We need to abolish tenure. We need a class trader. I work with one of the best faculties in the world. A third of them should be put on an ice flow," Galloway said.
He said this "incompetence" in higher education has led to debt-laden young people who delay or avoid getting married, forming a household, or taking a business risk.
"One of the moral bankrupt parts of our society is how much we are charging young people. It is time we massively, massively, a Marshall Act kind of expansion of freshmen admittees and similar to Germany and Canada. Great kids get a chance to go to good schools, but we don't have a casting with luxury brand schools, and everybody else fights over mediocre education at a ridiculous price."
Julia La Roche is a Correspondent at Yahoo Finance. Follow her on Twitter.