Creative destruction is coming to higher education, says Richard Vedder, Adjunct Scholar at the American Enterprise Institute.
Private businesses are used to creation and destruction, as new businesses come in to replace the old. Higher education, however, has been somewhat immune from this cycle — very few colleges have actually closed, as college enrollment and government subsidies have only increased.
But that phenomenon appears to be changing, writes Vedder, as schools face stagnating tuition revenues. A number of colleges have recently announced that they are closing their doors and slashing the number of faculty on their staff. For example:
- Mid-Continent University in Kentucky recently announced that it was closing, and Georgetown College — another Kentucky school — announced a 20 percent faculty cut and a reduction in its offered majors.
- Iowa Wesleyan, which has been in operation since the mid-1800s, is dismissing more than one-third of its faculty.
- Nazareth College in New York and College of Saint Elizabeth in New Jersey have each announced major cuts to faculty and staff.
Why is this happening? Vedder identifies five factors behind the shift:
- The number of college graduates is growing faster than the number of managerial, technical, and professional jobs. Up to half of recent college graduates, according to estimates, are “underemployed,” working as baristas, for example, or in retail stores.
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