transcript

Speaker 1:
[00:00] Last week, Hampshire College, a private liberal arts school in Amherst, Massachusetts that I had never previously heard of, announced it was shutting down, and I thought, bummer for Hampshire College. But then I read, this is much bigger than Hampshire. The United States currently has 4,000 colleges, and more and more of them are closing every year. In an article at The Atlantic titled The Looming College Enrollment Death Spiral, the writer Jeffrey Salingo says that your Harvards and Yales and universities of Michigan and Alabama are going to be just fine, but that smaller regional schools that you maybe haven't heard of won't be. And that means that students who can afford to go to out-of-state schools for their education will continue to do so, but more importantly those who can afford it might not go to college at all. We're at risk, Salingo explains, of turning a four-year education back into a luxury good in this country. When your college closes, coming up on Today Explained.

Speaker 2:
[01:27] Learn more at adobe.com/do that with Acrobat.

Speaker 3:
[01:30] So good, so good, so good.

Speaker 4:
[01:32] Spring styles are at Nordstrom Rack stores now, and they're up to 60% off. Stock up and save on Rag and Bone, Madewell, Vince, All Saints and more of your favorites.

Speaker 5:
[01:42] How did I not know Rack has Adidas?

Speaker 4:
[01:44] Why do we Rack? For the hottest deals. Just so many good brands. Join the Nordy Club to unlock exclusive discounts, shop new arrivals first and more. Plus, buy online and pick up at your favorite Rack store for free. Great brands, great prices. That's why you Rack.

Speaker 6:
[02:00] You're listening to Woo Woo Today Explained.

Speaker 5:
[02:09] I'm John Marcus, the Senior Higher Education Reporter at The Hekenger Report. We're a nonprofit that covers education.

Speaker 1:
[02:16] Okay, so John, last week it was announced that the private liberal arts college, Hampshire College would close after its fall semester. Tell us the story of what happened to Hampshire.

Speaker 5:
[02:26] Yeah. So like a lot of small colleges, Hampshire had a lot of problems hidden just below the surface. Well, actually, in Hampshire's case, they weren't that well hidden. It had been having problems for more than six years since before the pandemic, but was being kept afloat by its very loyal alumni, who includes some people that have been extremely successful largely in the arts.

Speaker 1:
[02:48] Who are we talking about? Should we drop some names?

Speaker 5:
[02:51] We're talking about the documentary filmmaker, Ken Burns. Predominantly, he's probably the most famous alumnus of Hampshire.

Speaker 7:
[02:58] At that moment, I said, I want to be a filmmaker. And then going to college and sort of having my molecules rearranged at Hampshire College with teachers who were social documentary, still photographers.

Speaker 5:
[03:09] Barry Sonnenfeld, the director, he directed the Men in Black movies.

Speaker 4:
[03:13] Who are you? Really?

Speaker 7:
[03:15] Really? I am just a figment of your imagination.

Speaker 5:
[03:22] Lupiti Nyong'o, the actress.

Speaker 4:
[03:24] Hello, I am Rosam 7134.

Speaker 5:
[03:28] Leif Schreiber, the actor.

Speaker 4:
[03:30] The fact remains, a Boston priest abused 80 kids.

Speaker 8:
[03:33] We have a lawyer who says he can prove law new about it.

Speaker 9:
[03:36] And we've written all of two stories in the last six months.

Speaker 5:
[03:40] John Krakauer, the author, all of them went to Hampshire. And so I think a lot of people were legitimately pulling for Hampshire. It's a school that enrolls people that are very interested in the creative arts. It was started in 1970, so by New England standards, it's in Western Massachusetts. By New England standards, it was reasonably young, but it was never very big. Its endowment was very small. Its enrollment continued to decline. It had fewer than 800 students left at the end. It had $21 million in debt. Debt is a really important and largely misunderstood component of this. When people think of debt and college, they think of student loan debt. But there's also institutional debt, and it is really piling up. Colleges and universities have borrowed significant amounts of money. And so servicing that debt becomes a big drain on their operating budgets. To attract students, colleges do something else that isn't widely known. They discount the tuition. Almost no one pays the list price you see on the website.

Speaker 1:
[04:47] At Hampshire specifically or everywhere?

Speaker 5:
[04:50] At colleges in general. The discount rate of colleges and universities is more than 50 percent. So if you were a private business, and you gave back 50 percent of your revenue, you'd be out of business. And that's what's happening to a lot of these small colleges. At Hampshire, I looked up the numbers, they were giving back more than 75 percent of their revenue in the form of discounts, just to continue to get people to come there and fill seats.

Speaker 1:
[05:15] So Hampshire gets a lot of attention, but it sounds like from what you're saying, this is happening maybe far more often than we know, that four-year colleges, universities are going out of business.

Speaker 5:
[05:25] About 100 colleges are closed since the pandemic. Many of them only made it this far because they got federal aid during the pandemic to keep them open. Had they not, they would have probably closed sooner. There's a new estimate that shows that 442 private, non-profit colleges and universities, that's one-quarter of the total, are at risk. About 120 of them are at severe risk of closing. We can talk about some of the reasons for that if you'd like.

Speaker 1:
[05:56] Please, go for it.

Speaker 5:
[05:59] So, we are running out of students. The number of 18-year-olds is way down. People stop having children during financial downturns, and if you do the math, the Great Recession was in 2008. So, in 2026 is when that hits us. 18 years later, we're running out of 18-year-olds, and that will begin to have an impact on college enrollment in the fall. The last big class was the one that enrolled in this most recent fall. The next fall is when the, what they call the demographic cliff begins to hit.

Speaker 10:
[06:31] The country is heading towards a cliff, a demographic cliff. Over the next decade, there will be fewer 18-year-olds available to fill the nation's universities.

Speaker 2:
[06:40] Those missing babies aren't around to go to college, so that means that there's a possibility for some schools, each incoming class could be smaller than the last.

Speaker 5:
[06:48] And it's just math. We have too many colleges, and we have too few traditional-age college students. Of the ones we still have, a smaller proportion of graduates from high school are choosing to go to college. So we hit a peak in 2016 of 70% of high school graduates going to college. That's now down to just a little bit better than 60%. That is a big, big drop in a very short time. And that has to do with the cost of higher education and the growing skepticism about the return on the investment. So that's really taking a toll.

Speaker 1:
[07:25] Okay, so we've got the demographic cliff. We've got the cost. There's also a culture war around our colleges and universities currently being waged by this administration. Does that have something to do with it?

Speaker 5:
[07:35] That is not helping. It's clearly under this current presidential administration, we are seeing a lot of other impacts on higher ed that people have been reading about, in my opinion, kind of obscuring the reality of what's going on. I think one of the things that we've been talking about, the sustainability of higher education, has been the kind of the focus that we've all understandably had on this firehose of funding cuts and lawsuits and attacks on DEI.

Speaker 11:
[08:02] You see what we're doing with the colleges, and they're all bending and saying, sir, thank you very much, we appreciate it.

Speaker 5:
[08:09] In the end, though, the kinds of colleges that we're talking about that are at risk of closing, this doesn't affect them, because they don't do federally funded research.

Speaker 6:
[08:19] The one...

Speaker 5:
[08:20] And the sort of policy under this administration that is hurting some of these small colleges is the crackdown on international students. Some of these small colleges have recruited international students because they're profitable, they pay the full tuition, and so we've seen now a 36% decline last year in the number of visas issued for new international students. That's a giant hit.

Speaker 12:
[08:45] Universities across the country have seen a decline in new international students.

Speaker 3:
[08:49] More than 75 international students in Texas are facing an uncertain future.

Speaker 5:
[08:54] Essentially, it's just a perfect storm of all of these things happening at the same time to colleges that are already overextended, overly indebted, and don't have enough students.

Speaker 1:
[09:04] What happens to a student who goes to one of these schools when they find out their school is closing and they're, you know, whatever, a sophomore?

Speaker 5:
[09:14] Yeah, nothing good. Nothing good happens to those students.

Speaker 13:
[09:17] So everybody that's more like of like relative underclassmen is just screwed after the end of this semester.

Speaker 14:
[09:23] Rest in peace, Hampshire College. Thank you for giving me a place to be weird and gay.

Speaker 2:
[09:27] I really did love this place.

Speaker 9:
[09:29] It really felt like I had found a family here.

Speaker 2:
[09:33] And this is really sad.

Speaker 5:
[09:35] There is research that shows that half of those students transfer, half of them don't, half of them end their pursuit of a degree. Of the half that transfer, half of them never graduate. And the reasons for that include just the sort of the cost, the fact that the successor college often doesn't take all of their credits or won't accept their transfer credits toward the major. And in many cases, students have left these small colleges that have closed, gone to another college, and then it closed. So students have experienced this more than once. And that includes some students in Hampshire who already came there. Well, new college in Florida didn't close, but it significantly kind of changed its ideological approach to higher education. And so Hampshire College reached out and recruited those students and said, come here, you'll be welcome here. They came to Hampshire and then Hampshire announced that it will close. So this is becoming a cycle. And one really fascinating thing that I started hearing a few years ago from a student tour guide at a small college was that parents were beginning to ask a question he never heard. And it wasn't, how's the food? It was, will this college still be here in four years? So people are beginning to pay attention.

Speaker 1:
[10:52] Bleak.

Speaker 5:
[10:53] Isn't it?

Speaker 1:
[10:54] To some degree, you're speaking about market forces, right? I mean, there's not enough students, the costs are too high. So the market's correcting and these schools are closing. But what do we lose when we lose these smaller, regional liberal arts colleges?

Speaker 5:
[11:15] Yeah, that's a great question and it's something I've learned a lot about by visiting communities where colleges have closed. I've been surprised by the answer to that. So the first and most important thing is, not everyone needs to go to college, but somebody needs to go to college. College going in the United States is down in economic rival countries globally. College going is way up. So we're losing the competitive edge that we've always had by having a well-educated, innovative and entrepreneurial population. That's the big picture. The small picture is more immediately, as you might assume, a college that closes is a problem for its community because you lose jobs, housing values go down when you lose a major employer. But here's the one that surprised me that I never really thought about. A lot of these colleges are in remote isolated places, often rural, and they draw young people to these communities who after they graduate, they stay and they create businesses or they work in jobs. A lot of the colleges that have closed are in places where the population is aging. All of these colleges that have closed is another ending of the pipeline that was bringing in young people to a place where they were needed to diversify the economy.

Speaker 1:
[12:40] So for someone out there who is like, Hampshire College, never heard of her, doesn't affect me, what they might be missing is that if enough of these schools close, which from what you said, it sounds like we're definitely at risk of, you're gonna see a bit of a death spiral, a doom loop in smaller American cities.

Speaker 5:
[13:04] Yes, I would say more small towns than cities, but even in some cities where colleges close, again, it's a lot of payroll, there's a lot of employees, there's the add-on spending of the students who buy pizza or rent apartments. But to your point, the immediate reaction I've noticed on social media and elsewhere is good, let them close.

Speaker 10:
[13:25] Unless you're gonna be a doctor, a lawyer or an accountant, college is a total waste of time.

Speaker 15:
[13:32] More and more jobs are saying, a four-year degree or a couple of years' experience. Degree or certifications. Some jobs don't even care about a degree.

Speaker 16:
[13:41] What are you studying?

Speaker 12:
[13:42] I am studying creative writing.

Speaker 16:
[13:44] Going to a private institution for a degree that typically does not have the best return on investment.

Speaker 14:
[13:49] But I have a passion for this kind of writing.

Speaker 16:
[13:52] But is the degree required?

Speaker 5:
[13:56] There's a real antipathy toward colleges among some people in the public who feel that they are elitist, that they are woke, that they're overly liberal, that they're indoctrinating young people. Whether that's true or not, that's the public perception. And I don't think colleges have done a very good job at sort of counteracting that narrative. But they're also really important. We need them. We need them in some form to continue to educate young people for jobs that require those skills.

Speaker 1:
[14:35] And how colleges can save themselves or at least die a little slower in a minute on Today Explained. Support for this show today comes from Bombas. If your sock drawer could use a little love, you can upgrade to Bombas. They have a range of well-made socks designed for every activity, every activity, like their cushions, sweat wicking, sports socks. They say you don't need to worry about sliding down your foot while you stay active this spring. They have more than socks, too, with breathable, soft, high-quality basics, underwear and t-shirts. Our colleague Nisha Chital has tried Bombas.

Speaker 9:
[15:21] One thing that's great is Bombas. They have warmer socks that are really thick and warm and great in the winter, and they're like the only sock I want to wear in the winter. They also have lighter weight ones, like the no-show socks that are great for like sneakers, flats, loafers, warmer weather footwear.

Speaker 1:
[15:39] You can go to bombas.com/explain and use the code EXPLAIN for 20 percent off your first purchase. bombas.com/explained. The code at checkout is EXPLAIN. Support for Today Explained comes from Vanguard. To all the financial advisors out there, hey, the ones whose job it is to help Clydes keep more of what they earn, Vanguard says they're here to help. Vanguard is once again slashing fees, this time for more than 50 of its funds. Plus, they say that's on top of fee cuts. They say they gave last year two investors at 87 of their funds. That's because in an increasingly high priced world, hello, Vanguard says their goal is to stay true to excellence without expense. Vanguard believes top performance shouldn't come at a higher cost. They say not only do clients keep more of what they invest, they get a sophisticated active and index bond funds at industry leading low costs and a fixed income team obsessed with consistent performance. Vanguard also says its low fee structure gives bond managers more flexibility to navigate markets and pursue results. You can see the record for yourself at vanguard.com/impact. That's vanguard.com/impact. All investing is subject to risk. Vanguard Marketing Corporation distributor.

Speaker 8:
[17:14] Support for Today Explained comes from Grow Therapy. If you're going through it, Grow Therapy might be able to offer you support. Whether you've been going to therapy for years, you're totally new. Grow Therapy wants to help. They say their priority is to find you a professional who fits you while being affordable and flexible. They say they can connect you with thousands of independent licensed therapists across the US., offering both virtual and in-person sessions and both nights and weekends. Grow says there are no subscriptions, no long-term commitments. If you fear commitment, you can just pay per session and you get started in as little as two days, and you can cancel up to 24 hours in advance at no cost. Whatever challenges you're facing, Grow Therapy says they're here to help. Grow accepts over 100 insurance plans, I'm told. Sessions average about $21 with insurance, and some people pay as little as $0, depending on their plan. You can visit growtherapy.com/explaintoday to get started. That's growtherapy.com/explained, growtherapy.com/explained. Availability and coverage vary by state and insurance plan.

Speaker 1:
[18:26] Today Explained is back, I'm Sean Rameswaram, and we're still talking to John Marcus from the Hekenger Report about the trouble colleges are having enrolling students, but now, we're gonna talk about things colleges can do to stem the tide.

Speaker 5:
[18:38] For a long time, colleges didn't do anything about this. There's a lot about American higher education that consumers don't immediately know. We've held colleges and universities, until the more recent past, we've kind of held them on a moral high ground. But in fact, of people that go to four-year universities, fewer than half of them graduate within four years. A quarter of freshmen drop out before their sophomore year. Colleges and universities in the United States, and I'm talking collectively, many of them have very high graduation rates and do an extraordinarily good job. But collectively, they have terrible outcomes. We are paying an enormous amount of money, not just families and students, but taxpayers are injecting enormous amounts of money into institutions that have not only not done a great job at actually graduating students, which is their basic and most simple promise, but doing it on time, doing it affordably. And so we're in an existential crisis, and there's nothing like an existential crisis to kind of focus people's attention. And by people, I mean the people that run colleges and universities. So finally, we're getting some reforms. Here's a couple of things that are happening. The most dramatic one, that again, I don't know that people are paying close enough attention to, is that accreditors have finally approved something that a small group of reformers has been pushing for a long time, which is the idea that you could get a bachelor's degree in three years instead of four.

Speaker 12:
[20:14] A three-year college degree may be an option for students in the future.

Speaker 17:
[20:18] Supporters say shorter programs will help students to graduate faster and reduce the cost of college.

Speaker 5:
[20:23] That's true in many countries, that you get a bachelor's degree in three years instead of four, but not in the United States. Now, the creditors who are also under a lot of pressure have approved an idea that they previously rejected, which is a bachelor's degree that only requires 90 credits and three years instead of 120. They've made one stipulation, which is you can't just call them a bachelor's degree, you have to call them an applied bachelor's degree, or an accelerated bachelor's degree, or a career-focused bachelor's degree. These are now, for the first time being offered, in person and some of them online, you can get in certain fields where there's very high demand, criminal justice, graphic design, some healthcare fields. We don't know yet what will happen to those students, but I'll tell you, I have visited a criminal justice program where the students will graduate in three years with 90 credits. The way they do this is essentially they get rid of all of the electives. And these students were laser-driven to finish. And so I think this actually has legs. I think this could work. It's the first new kind of a degree since essentially the advent of the community college. The big question is, will employers accept them? And can you use them to go to graduate school?

Speaker 1:
[21:46] My theory is yes, because I've been working since like I graduated and no one's ever asked to see my college degree.

Speaker 5:
[21:52] Exactly. Employers probably don't care as much as faculty and registrars do about how you got your bachelor's degree. They just care that you have it. And in fact, a survey by one of the colleges that's doing this, Johnson and Wales University in Providence, Rhode Island, a survey of its employers who typically hired its grads, the employers are like, yeah, we love this idea. Do it. On the other hand, graduate school admissions officers said, no, we won't take people with a three-year bachelor's degree. Or importantly, they said, we won't take American students with a three-year bachelor's degree. We will take international students whose systems only take three years. But an important footnote was they also said, but now that more people are doing it, we're going to take a closer look. So we won't know whether this will succeed, but I can tell you that 60 colleges are doing it now or are getting ready to do it. So this is a massive change. And that's one thing colleges are doing to respond to this.

Speaker 1:
[22:56] Are there other things?

Speaker 5:
[22:57] Yes.

Speaker 1:
[22:57] I would hope there are other things.

Speaker 5:
[22:58] I just wanted to stop for a moment and let you get a word in. So, there are other small reforms here and there that I think we're all paying attention to. One that's very interesting. I was at a conference of liberal arts colleges at which a speaker stood up in front of the room and said, right now in America, the two worst words are liberal and arts. So liberal arts colleges are kind of having trouble making a case for themselves. One liberal arts university near Boston called Brandeis University, pretty well known national brand, they are pushing the liberal arts but also creating a second transcript so that they can show employers not only the first transcript is what everybody gets when they finish college. Here are all the courses that I took, which means essentially nothing to an employer. The second transcript says, here are the skills I learned.

Speaker 14:
[23:58] We're looking at skills such as durable skills like communication, collaboration, critical thinking, some of those soft skills or durable skills will be reflected as well as emerging technology linked skills like AI literacy and that is a really interesting idea.

Speaker 5:
[24:14] On the one hand, you could look at it as what that's doing is reinforcing people's idea that there's a difference between liberal arts academics and liberal arts skills. But you could also look at it as improving the way that people look at the liberal arts by saying, you didn't just take philosophy, you learned critical thinking and how to communicate and how to write.

Speaker 14:
[24:38] It's not throwing out the research and throwing out the liberal arts, it's saying we can be both and, or I guess it's and, and, and, it's research and liberal arts and the career readiness.

Speaker 1:
[24:52] Do you think we're on a one-way street to ultimately decline in American education at the college university level?

Speaker 5:
[25:04] There's no way around the fact that there's just going to be fewer students. Separate and apart from the percentage of them that actually choose to go to college, there's just fewer of the traditional age 18-year-olds. So I think what you're going to see is the way that higher education exists is going to change. The conventional residential college, where you live in a dorm and walk across the grassy quad and go to class and take philosophy, the proportion of students that are enrolled in those kinds of institutions will be much, much lower because they're going to have a lot more choice.

Speaker 1:
[25:37] You make a show that's college student facing. I think it's called College Incovered and it's meant to help people understand the maybe biggest decision of their lives before they head off to a four-year school. What would you tell someone who's 18 years old and lives in rural Vermont, and wanted to go to Hampshire College but isn't going to anymore, and is on the cusp of maybe not going to college at all?

Speaker 5:
[26:07] What we often preach on our podcast, College Incovered is that these colleges increasingly need you more than you need them. The average acceptance rate, we all focus on Harvard and Caltech that take one out of 33 applicants. On average, colleges take more than 70 percent of their applicants, and that's easier to get in than it was 10 years ago, just because there's fewer students. So colleges have benefited from this idea of scarcity. It isn't true. You're going to get into college. You should pick the one that's going to be best for you and not let colleges create the narrative that you're lucky that they're even considering your application. That's no longer true. It's also not true that when they offer you financial aid, that you have to take it. The number one thing we tell people is negotiate for more, especially right now when it's a buyer's market, they will give you more financial aid. They need you.

Speaker 1:
[27:13] You can read John Marcus at heckingerreport.org. You can listen to him on College Uncovered. I'm not sure if that's one of those podcasts you watch. I think it's not. Dustin DeSoto made the show today. David Tatasciore mixed. Gabriel Dunatov graded the exam, and Avishay Artsy made his today, Explained, editing, debut. Congrats, bud, you graduated. For the rest of you, have you heard America Actually yet? It's the show in this feed on Saturdays. This week, Ested's gonna ask Arizona Senator Ruben Gallego about the allegations against former Congressman Eric Swalwell, who Gallego initially defended.

Speaker 17:
[27:50] Oops!

Speaker 1:
[27:51] If you don't want to wait until Saturday to hear that, Vox members can hear it early. It's available right now if you go to patreon.com/vox. Alright.