How about this economy?

What does everyone think about how the economy issues that we are facing today will affect graduate University enrollment and the number of programs offered?
My home is that more B&M Universities will offer their same campus degrees online to capture a larger demography of customers and because they make money.
What do you think will happen? Thanks everyone.

 

It has been affected many years ago. More alternatives than before, Universities that does not enter or capitalized in this movement, will struggle and or will disappear. Reason why UOP is large, is that they capitalized on this.

I guess, with the increasing prices in the fuel, other first needs items, and the dangers on campus (Virginia Tech comes to mind), it makes more sense to study online more than ever.

 

The credit crunch could have the opposite effect, however.

You may see more people who are working and do not qualify for FFA unable to get loans with the terms they want. Scary but it could happen.

 

The temporary downturn in the economy (I believe everything is cyclical) won't impact traditional B&M schools with their bazillion dollar endowments and "non-profit" status, but mostly online schools are probably going to take a hit.

On the subject, when I opened my latest 457 and 401k statements, I just started laughing. If I didn't laugh, I would have cried.

 

On the bright side, those statements will eventually return to positive earnings as this current economic cycle starts on the upward side of the curve. In the meantime, you will have plenty of overtime opportunities if the downturn brings out more criminal activity.

 

Same here Bruce. No early retirement for me (which was at least 20 years off anyway).


Tom

 

I guess I am the lucky one. I only lost about $2K in my 401K. I invested in mostly bonds.

 

Hey, I don't know about any of you other members but I'm not worried. I realized a long time ago that I'm never going to be able to "retire." I know that it's never happening for me because the money just isn't going to be there. You need to relax and make your life what you want it to be. Think about "sustainability."

 

The vast majority of B&M schools don't have bazillion dollar endowments, and pay they day to day expenses and their payroll with investments and tuition revenue. Fewer students are going to be able to enroll because they aren't going to be able to secure the funding to do so (I work in financial aid, and see it happening already - it's likely to get worse before it gets better). Coupled with a lower rate of return on investments, most colleges are going to be in a world of hurt.

While some might be able to expand their online programs and generate some tuition revenue that way, online program expansion is expensive, too. If the online program at a school is not already well established, it may be an area where they see budget savings by cutting it.

I agree that this is likely a cyclical downturn (aided by greed!), and I really, really hope it turns around quickly.

 

I don't know if you're right or if you're wrong (and neither do you). My guess is that the vast majority of B&M schools pay their expenses with tax revenue, not investments (are you thinking about U of P?) and tuition (tuition seems to hold steady, it's the "fees" that seem to expand).

My guess is that most universities in the USA are run by the states in which they exist. They are not private, they are public.

 

I think I know quite a bit about what I'm talking about, thank you. This is my area of employment. If you're interested, most colleges and universities publish their budget analyses online. Look a few up to see where their money comes from.

Most of the colleges and universities in the US are private, not public. Public universities receive a good portion of their funds from the federal and state government. Privates do not receive nearly as much.

Every college and university invests their money, just like a consumer. Do you think they just keep their tuition revenue in a big safe? When Wachovia Bank ran into trouble two weeks ago, there were many colleges struggling to make their end of the month payroll, as Wachovia was the holder of one of the largest educational investment funds. Many colleges suddenly had their access to their own funds frozen.

Tuition goes up nearly every year at most colleges and universities.

The vast majority of colleges and universities in the US are not wealthy and are not rolling in money. The economic crisis is hitting them hard.=

 

"I don't know if you're right or if you're wrong (and neither do you)."

I have to second what Ding said. I work with the board of a private liberal arts college, and I hear their meetings, including many recent conference calls about Commonfund.

I think this downturn is more a correction, and it is due to many different factors. For instance, if everyone who had taken subprime loans were able to make their payments, we wouldn't have this problem now. If appraisals were tied to a real value, such as a replacement dollar per square foot instead of what Joe's house down the street sold for last week, there would be fewer people upside down right now.

Likewise, if the mortgages hadn't been packaged and resold, lenders would have more freedom to amend those contracts to something more affordable. If there had been no market for the mortgage-backed securities because investors were ethical enough to refuse extraordinary returns, the product would not have flourished. And so on.

Getting down from my soap box now.

 

This seemed relavent to the conversation so...

http://biz.yahoo.com/ap/081010/colleges_financial_meltdown.html?.&.pf=college-education

 

Here are the numbers from the Department of Education for two and four year colleges and universities:
2,029 public schools
1,872 private not-for-profit schools
2,808 private for-profit schools

Public schools account for the greatest number of students around 9 million.
Private NFP around 2.3 million students.
Private for profit around 1.3 million students

 

Ian's numbers suggest that Ding was right and I was wrong. Maybe I'd be right if I had said it this way: Most students attend public universities.

Maybe not.

I am willing to believe that the economic downturn has hurt universities of all descriptions. I'm guessing that this is why financial viability is a part of the process by which schools become accredited. Just as people are hurt if a large company is forced to close it's doors, people are hurt if a university is forced to close. Is there really any difference?

 

Kizmet,

actually there might be a difference, especially if we are talking about a tier 1 research university. Most universities contribute greatly to the community and in some cases are the major employer, not unlike a large company. But one of the differences could be federal dollars brought in to the community in the form of financial aid, research, and grants. I think that major universities also partner with multiple firms in their respective areas to funnel students into the job market as opposed to just one entity. I would like to think that universities are more altruistic than a large firm but I think there may be areas where some firms have made significant contributions.

I'm thinking a university closing might have a greater impact in areas outside of pure dollars.

 

My company has drastically cut back on its tuition assistance and other benefits. I think that this is a trend with companies that are struggling. For me, any additional education will have to be paid out-of-pocket or financed.

 

I lost $0.00 in my 401K, and TSP. Well, I don't believe in that 'cause I have to work for another 42 years before I can take out that money. I don't know if I can live for 42 years. If I have money, I just purchase land and leave it to nature.

 

I think you should see a relative boom in some university programs, especially in business schools. Why? Lots of people going back to get an edge, or simply needing a degree just to get a job.

 

Good thing I'm not retiring anytime soon, eh?

Not really; our idiot governor based his budget on getting casinos approved, they didn't, and now the state is broke so they're going to slash local aid which means no OT and possible layoffs (not for old timers like me).

Now he's too busy campaigning for Barack Obama to figure out any other solution.