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Which Colleges Are on the Brink?

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Wondering which colleges may not survive for long? Just ask Scott Galloway. Who?

As one of his critics describes him, Galloway is “a marketing professor at NYU. As such, he is incredibly highly paid and influential. He has 266K Twitter followers, best-selling books and a lively racket posting his blogs to Business Insider … In his latest blog/column he talks about how important it is for very fancy universities to brand themselves (perhaps they could hire Scott Galloway, professor and columnist, as a consultant!) and cut costs.” High praise, indeed, sarcasm aside.


I’d like to comment about that July 17 Galloway blog/column. I’ll also include an observation or two from Galloway’s esteemed critic quoted above. My point is that I happen to agree with Galloway’s contention, as alluded to in my title, that some colleges are heading for extinction, due in part to the ongoing COVID-19 pandemic.

Galloway’s analysis is strongly quantitative, mildly subjective, rational, and convincing, despite the critical assaults (more on that later). Members of College Confidential’s forum have discussed his warnings and expressed their own issues with some of his deductions. See for yourself, starting with post 11,199 on this huge thread. He reinforces his statements with numerous links to supporting data, which can slow down his readers a bit. However, if students need a fine example of how to mount logical arguments, look no further than Prof. Galloway.

If you’ve followed my posts over the past half year, you’ve no doubt noted my trumpeting of a similar but less sophisticated theme that echoes Galloway: A significant number of American colleges are in jeopardy of failing due to the pandemic. This reality doesn’t take any special knowledge to see. The evidence is available to anyone willing to process the news about what has been happening in the realm of higher education over the past several years. And then came COVID-19.

Could Pandemic Worsen Existing Issues?

So what is Scott Galloway saying in his sobering column? One metaphorical paragraph sets the stage:

Think about this: Next month, as currently envisioned, 2,800+ cruise ships retrofitted with white boards and a younger cohort will set sail in the midst of a raging pandemic. The density and socialization on these cruise ships could render college towns across America the next virus hot spots

In case you missed the metaphor, he’s talking about colleges that are welcoming their students back to campus for in-person classes — business as usual, with safety guidelines in place. This prompts his accusatory question: “Why are administrators putting the lives of faculty, staff, students and our broader populace at risk?” The answer comes from Business Insider‘s introduction:

  • He says that universities planning to reopen for in-person classes in the fall are swept up in a “tsunami of denial” about the dangers of the pandemic because they’re so dependent on student tuition to stay up and running.

Ah, the old bottom line. Speaking of bottom lines, though, that Galloway critic I referenced is David M. Perry, a journalist, historian and senior academic adviser in the history department of the University of Minnesota. Perry’s bottom line is that he has issues with some of the numbers Galloway uses to substantiate the case for doomed cruise-ship colleges, specifically this one that Galloway cites: “… The average salary of a professor with a PhD (before benefits and admin support costs) is $141,476, though some make much more, and roughly 50 percent of full-time faculty have tenure …”

Perry claims the salary figure Galloway references is false, and accuses him of misreading the data from his source. He quotes the author of Galloway’s source: “More than 1,000 institutions representing 378,865 full-time faculty members responded to the AAUP’s Faculty Compensation Survey, from which the new report is derived. The average full professor salary this year was $104,820 …” Perry’s callout of this error is especially pointed and implies that there may be more than numerical inaccuracy going on.

Bard, Dickinson Among Galloway’s “Perish” Predictions

Galloway’s rationale for making his ominous predictions are, in my view, well thought out. He put together an analysis of 436 colleges and universities, gathering hard numbers from various data sets. He then placed the 436 into one of his four “Value vs. Vulnerability” quadrants, labeled Thrive, Survive, Struggle and Perish. Here’s a baker’s dozen of the 89 schools that fall into the “Perish” category, according to Galloway’s calculus:

  • Bard College
  • Dickinson College
  • UMass Boston
  • Sarah Lawrence College
  • University of Hartford
  • Eckerd College
  • Simmons University
  • University of Indianapolis
  • Florida Tech
  • Gannon University
  • University of New England
  • Maryville University
  • Robert Morris University

Some of these names are shocking. Galloway identifies 131 schools that, in his view, should “struggle,” 128 that should “survive” and 88 that should “thrive.” Check his post for specific names from each category.

Here are the characteristics of those 436 schools that placed them into one of Galloway’s four quadrants:

  • Thrive: The elite schools and those that offer strong value have an opportunity to emerge stronger as they consolidate the market, double down on exclusivity, and/or embrace big and small tech to increase the value via a decrease in cost per student.
  • Survive: Schools that will see demand destruction and lower revenue, but will be fine, as they have the brand equity, credential-to-cost ratio, and/or endowments to weather the storm.
  • Struggle: Tier-2 schools with one or more comorbidities, such as high admit rates (anemic waiting lists), high tuition, or scant endowments.
  • Perish: Sodium pentathol cocktail of high admit rates, high tuition, low endowments, dependence on international students, and weak brand equity.

I don’t see any of those 89 “perishable” schools being out of business by this time next year, maybe not even two years from now. My instinct is that many, if not most, of this group are currently either “surviving” or “struggling” and it will take more than one admission cycle plus quick cultural change (increasing vocational school enrollment) and acute pandemic consequences to see any perish. A college’s collapse doesn’t happen overnight, at least not before symptoms of failure become painfully apparent.

Galloway’s “pandemic panacea” for colleges:

University leadership across America should immediately announce fall classes will be all online, no in-person classesSchools will have to undertake what firms ranging from Nike and Condé Nast to Wells Fargo and Walgreens have done — cut costs and prices. Most important, colleges should not waste this crisis and should demand their organizations become facile with big and small tech to dramatically increase enrollments while lowering costs

University leadership and faculty aim to help young people find their greatness. Part of that charge is to instill grit, perspective, a sense of curiosity/innovation, citizenship, and a comity of man. We should lead by example.

Obviously, all this is just one person’s opinion. I’m not a marketing professor and my math skills are problematic at best, but I agree with Galloway, in general. I’ve proffered my predictions of higher education’s woes in previous articles. Market forces are powerful, especially when supercharged by unanticipated left-field pandemic curveballs. They can wreak havoc on corporations and colleges that are currently hanging by a thread or two, in peril of being clipped by COVID-19.

——————

By: Dave Berry
Title: Which Colleges Are on the Brink?
Sourced From: insights.collegeconfidential.com/colleges-on-the-brink
Published Date: Mon, 20 Jul 2020 13:48:47 +0000

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Apply Online For Student Loans

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Apply Online For Student Loans

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However, it’s important to remember that student loans are still loans, and you should borrow responsibly. It’s advisable to budget regularly and avoid unnecessary purchases or luxuries to ensure you can manage your loan repayments in the future.

Before applying for student loans, explore other options such as scholarships, grants, or parental funding. These resources can help reduce the amount you need to borrow and minimize your financial obligations.

Lastly, it’s crucial to have confidence in your ability to secure a salary that will enable you to meet your loan repayments after graduation. Work hard to achieve the grades and qualifications necessary for your desired career, as this will increase your chances of finding a well-paying job.

In conclusion, applying online for student loans can provide you with the financial support needed to pursue your education. However, it’s important to borrow responsibly, explore other funding options, and plan for a successful career to ensure you can manage your loan repayments effectively.

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Webinar Recap: How COVID-19 is Affecting Financial Aid

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Many families are facing new financial challenges in light of the coronavirus emergency, and College Confidential has fielded dozens of questions on this topic recently. To address those queries, we hosted a webinar on April 9 entitled “Paying for College Amid Changes Due to the Impact of COVID-19.”


During the event, moderated by Aaron Murphy, manager of learning and development with Inside Track, the following panelists offered their perspectives on the issue:

  • Denise Trusty, director of financial aid with Morehead State University
  • Laura Reisert Kalinkewicz, associate vice president of college partnerships with RaiseMe
  • Amy Nelson, director of sales at International Scholarship and Tuition Services
  • Charlie Javice, founder and CEO of Frank.

Check out the following topics that the panelists discussed, along with their views of how things may unfold amid the financial challenges brought on by the coronavirus outbreak.

Family Finances Changed? Contact Your Schools

If you plan to start college in the fall as a freshman — or return to school as an existing student — and your financial situation has changed since you applied for financial aid, you should contact the colleges on your list immediately. Financial aid departments can consider appeals for more money, but must base these decisions on each individual student’s situation, Trusty said.

“I know with Morehead State, where I work, we will be doing professional judgement calls on all students who say they’ve been affected,” she noted. “We will reach out to those students to see what we can do to help them maybe obtain additional funding, additional grants, scholarships, whatever they would be eligible for. We do professional judgment all the time for our students, because things happen all the time. This year will be an especially large amount of those, I’m sure, but those are up to individual schools to make that call for their students.”

In addition, she added, the Department of Education has set aside over $6 billion for additional grants and scholarships that the universities will be able to use. “Currently, I don’t know how that’s all going to play into this,” Trusty said. “So that will be up to each individual university on how they lay those out. I know it will be beneficial, I just don’t know how available that will be to each student.”

Keep in mind that schools are accustomed to reviewing financial aid appeals, and they all have processes in place for to do so. “It is really, really important to know that schools typically leave a budget from 10 percent to 20 percent or so of their financial aid dollars for what would be called a professional judgment bucket,”Javice said. “Therefore, there is additional money to be had, and it’s up to you to request it. You should approach your school as soon as you know you might need more money, and be prepared to show supporting documentation demonstrating how your finances are different from when you filed your FAFSA initially. This might require proof of a job loss, medical bills, a cut in pay or another such issue, Javice said.

In addition, if another school gave you a better financial offer, you can petition the school that gave you the lower offer for more money, Javice noted. “This typically works better for private institutions versus public state schools, given the fact that they have a little bit more discrepancy and more dollars to put to work in terms of a tuition discount,” she added. “This is solely up to the school on a case by case basis.” In some cases, the money is distributed on a first come, first serve timeline, so don’t wait if you know you need more aid.

Although financial aid can be a stressful topic, try not to be emotional when you request more money, Javice added. You’ll get a lot further by having organized documentation to present than you would by getting angry or upset, she noted.

Consider Outside Scholarships

The coronavirus situation has changed plans not only for incoming freshmen, but also for current college students, Nelson said. “Organizations are stepping up and trying to find ways to provide additional scholarship opportunities this year,” she noted. Students should be proactive in seeking those options.

Raise Me is offering new micro-scholarships for students who are seeking additional funding sources, Kalinkewicz said. In addition, she encourages students to ask colleges for more time to make decisions, even if the school hasn’t extended its deposit process. You can always try and request additional time to get your financial aid package right, she noted.

Finding more money is not relegated to younger students, Javice added. “Adult learners comprise the biggest group of people actually going to college today,” she noted. It’s very common for people to be seeking new types of skills and going back to college to gain additional degrees. Financial aid is available to adult learners, and they may even get aid to pay such costs as rent, she added. In addition, they can seek outside scholarships or employer-matching funds to pay for their educations.

Not Necessarily Too Late to File FAFSA

Students who didn’t file a FAFSA already should do that as soon as possible so you can get access to financial aid funds, Javice said. Federal FAFSA deadlines are usually in June, but states make their own deadlines for state aid. Some states, such as New Jersey, have moved their deadlines back for this year, so check to make sure you stay on top of your deadlines.

And if you file for financial aid and you decide you don’t want it, you can always decline the financial offer or portions of that offer, Nelson said. Your best bet is to apply so you can take what you need and decline any amounts you don’t need. Even if you don’t think you qualify for financial aid, you should apply anyway because you could be surprised at what you’re offered. “You really need to complete that [FAFSA] process every year,” Nelson said. “The process is very easy, and jobs can come and go. It’s your safety net and you want to make sure you’ve completed it. It makes it a whole lot easier when situations like this arise.”

Some colleges also have supplemental applications to fill out for particular types of aid, so always reach out to your financial aid office for information on which documentation you should be completing, Kalinkewicz said.

Could Families — Not Schools — Be in the Driver’s Seat?

Because many merit scholarships are based on test scores and GPAs, some high school juniors are concerned that they won’t have access to those in the coming year. With test dates being canceled and grades moving to pass/fail, they fear they won’t meet the criteria to earn such scholarships.

“It’s clear to me that colleges and universities know the extraordinary circumstances we’re under,” Nelson said. “All schools are leaning forward and considering all options as the situation develops. I would continue to encourage juniors to stay engaged and stay informed.” You should also watch to see what happens with test dates, she said. The ACT and SAT dates could change, and some schools may forego the need for a test score altogether, she added.

In addition, some merit scholarships that have traditionally been based on test scores may become test optional, Kalinkewicz noted.

Keep in mind that in many cases, families are in the driver’s seat rather than having the colleges be in charge, Javice said. Some schools have lost revenue and are very eager for students right now, “so if you are scared because you thought you could never get into a specific school from an admission criteria standpoint, this is your year to stretch, this is your year to think about the schools that are your reach category and go for it, because schools need the money and need the students. So the power that used to be in an admissions office is in you, the student or the family’s hands,” she said.

She also advises juniors to request application waivers from schools to save the $50 to $100 or so per application that they would normally pay. The schools may say no, but it won’t hurt to ask, she advised. “Persistence is key when dealing with schools,” Javice noted.

Federal Student Loans Payment Suspended

As many families are aware, payments on federal student loans are automatically suspended from March 13 through September 30, 2020 thanks to the government’s CARES Act. This is essential to keep in mind, particularly for families that have multiple children in various stages of the college process.

“You will stop paying your loans and you will have zero interest from now until September 30, and that’s important for parents to know,” Nelson said regarding existing federal student loans. “If you had an auto draft, the auto draft has been shut off and will not continue. You can, however, continue to make those payments if you’d like, and any interest you had before March 13, once that interest is paid up, all your payments will go directly toward your principal.” She advises families with federally-backed loans to check with their loan servicing agents, because they have a lot of information for both parent and student borrowers on how the CARES Act will impact payments for the next six months.

Student Job Gone? Colleges Might Help

For students who expect to earn money via part-time or full-time work to pay for college, but can’t do so due to the coronavirus, colleges may have resources to help. “There are many colleges and universities that have put together emergency grants for students to cover expenses that they were maybe not expecting because of COVID-19,” Nelson said. “They are making accommodations to try and make up for that lost income for students.”

Trusty said Morehead State is continuing to pay students who were on federal work-study. “If they had a job, we are still paying them right now as if they were working, although they are not. In the summer, those funds will be flipped over to emergency grant funds. So we will make sure that our students are covered and can live as if they were employed with the work-study position.”

Some colleges have even made remote work available to students, Kalinkewicz added. Therefore, contact your financial aid office to determine if any accommodations are available to make up for lost student income whenever possible.

Consider Other Options to Save

If you are seeking ways to save money on college, you should also consider other resources, whether that means less expensive colleges, in-state options or potentially transferring down the road, Janice said. You can also save money by taking classes at a community college to pay a lower cost for your credits that can be transferred to a four-year college later.

“If you have that target institution in mind — maybe you’ve already been admitted there but your family has determined a year of community college will really help stretch things further — work on articulation agreements or a plan so you are taking the right classes that actually have the ability to transfer toward the degree you want at your target institution, not necessarily just as credit,” Kalinkewicz said.

In addition, many colleges offer merit aid for transfer students, she added. So always look for every potential financial aid and scholarship resource to best maximize your package and allow your dollars to stretch as far as possible.

Resource: To review the entire hour-long webinar, you can watch the replay here.

Share Your Thoughts

We’d love to hear your thoughts on this topic. Check out our forum to contribute to the conversation!

By: Torrey Kim
Title: Webinar Recap: How COVID-19 is Affecting Financial Aid
Sourced From: insights.collegeconfidential.com/financial-aid-amid-covid-19
Published Date: Fri, 10 Apr 2020 15:22:20 +0000

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