COVID-19 has hit colleges and universities hard. To keep students and faculty safe, campuses had to transition to remote learning almost overnight, a situation that persists as we make our way through this pandemic. And now, with a major recession looming, these institutions are grappling with unexpected financial challenges. How might this play out? GLG spoke with Hunt Lambert, former Dean of Continuing Education and Extension School at Harvard University. This interview has been condensed and edited for length and clarity.

Now that classes have been canceled, what will be the impact on universities and colleges going into fall 2020?

Many schools have known for a while that online education – for the right students in the right subjects – can be as good as, or better than, face-to-face. COVID-19 forced almost every institution to go online in about two weeks. In the process, these institutions discovered that (A) the technology exists at scale and in affordable forms to support high-quality online learning, and (B) there are methodologies simple enough for their faculty to follow. Both exist for live (synchronous) and recorded (asynchronous) learning as well as many hybrids of those two. COVID-19 turned institutional fear of online learning into something eminently feasible. This will be enormously empowering for the university.

Still, most institutions are scared about money. Recently, most states have announced a 10% to 25% budget cut to higher ed. I don’t think they have any idea how they can absorb that. Since 2008, few schools have enjoyed much budget flexibility; now, there’s none, except for the very wealthy few.

Is there any reluctance around the accelerated shift to digital that we’ve seen play out? How has this accelerated that shift? And do you expect anything to return to a semblance of what we had pre-pandemic once this alleviates?

Yes, most faculty members remain uncomfortable with online learning. They learned in classrooms and spent their lives teaching in classrooms. For most, their entire university system is designed for that, and personal residential learning is their differentiation. Administrations comprise those faculty as well, and most don’t know what online can do.

Yet I don’t think higher education will return to pre-pandemic form anytime soon. For a long time in my work, I’ve stressed the difference between the traditionally aged student and the nontraditional student – particularly the adult education student. Simply put, today, 85% of all participants in higher ed activities are considered nontraditional by federal standards. Fewer and fewer students are going to college at the regular time, so I think this has finished something that’s been happening for a long time. We will see fewer students on campus going forward. If the leaders of these institutions have been paying attention, they know they cannot go back to what they thought of as normal 10 years ago.

In addition to the pandemic impact I mention above, the readiness of online learning will attract more traditional students, and the population of traditional students continues to fall and will do so for the foreseeable future. The pandemic responses do give schools more confidence that they can adapt and survive the transition to digital learning, but many will not survive the transition to online and hybrid, and also the financial challenge of revenue drops. The pandemic may well cause us to realize the late Professor Clayton Christensen’s prediction that more than 25% of the over 6,000 college and universities in the US will go away.

Do you think that massive open online course (MOOC) players like Coursera, edX, and Udacity stand to benefit from this crisis?

MOOC players have an incredible opportunity here. Coursera and Udacity have already pivoted almost entirely to the professional skills development market. By offering short, professionally oriented courses and increasingly recognized credentials, this market will surely surge. Just like after 2008, with unemployment growing, more people will likely go back to school because they’re unemployed and need to scale up, but fewer will choose degrees over certificates and more will chose online over face-to-face.

edX is dabbling in the skills development market, but it’s also moving increasingly into the online degree space. It’s a tricky transition, but it started with micro-masters to great success and is now successfully offering whole master’s degrees. The new highly scalable master’s from Georgia Tech are the best example. It tried an undergraduate global freshman academy with ASU that did not work and learned from that; it’s now launching a micro-bachelor’s modeled after the earlier micro-master’s degrees.

All three will likely surge in this environment. They’re in the right place at the right time with cost-effective, scalable solutions for the professional education segments of the market. They’ll start competing more and more with publishers and schools that try to do professional education, but they’re better positioned because of their scale and focus.

How do for-profit universities fit in a world where everyone has an online offering?

The private for-profit schools invented this market and the technology, and taught faculty how to teach in the online mode. So when our team created an all-online public university, Colorado State University Global Campus, we didn’t need to invent much. We just had to do it as a public entity at higher quality and lower cost. I always remember to thank the for-profit universities for building what was needed for us to make it a public good.

That said, they got greedy and collapsed not just from public competition but from regulatory changes they themselves lobbied for. These regulations allowed them to become the best entities in the world at converting Title IV funds into investor profits. In the end, they lost to well-branded local public universities offering online programs at a higher quality and lower cost.

Going forward, institutions like the University of Phoenix will rise again. It’s been hugely revalued and privatized, and is still full of very smart people at a time of rising demand. It doesn’t have to answer to analysts now, allowing it to pivot much more quickly than a public company. For-profits will probably succeed long term by serving the professional education market around micro-credentials that can but often won’t stack to degrees.

The impact on textbooks has been a trend that’s been playing out for quite some time. How do you think the pandemic and the move to online learning will impact the textbook industry?

Textbooks still serve a need and should be available for on-demand printing, but integrated digital learning tools are much more valuable. The great last decade’s challenge for publishers, which they’re just starting to react to at scale, is that digital tool kits sell for much less. So revenue may fall even as margins rise. Textbooks are leveraged typically 10 to 1 (1 book serves 10 learners through reuse and resale), but digital tool kits are only used by one person. Higher ed students have already voted with their dollars for a digital learning platform with a print-on-demand option.

For K-12 – which I know much less about so am projecting here – the need for a standard textbook across an entire class, with a teacher controlling the pace, will stay for some time. Perhaps K-12 will see the biggest near-term transition from print to digital as schools change policy for home learning. Many have discovered how great the digital courseware can be, but there’s still a dire shortage of broadband and computers/tablets for learners in many geographies. Unless public policy addresses those issues and changes the well-managed supply line controlled by publishers, K-12 textbooks are here to stay.

The decline of paper is even more complex than it seems. Layers of regulations at the federal level, at the state level, at the district level, at the school level, and in teacher union contracts protect the status quo. This is where publishers could use their lobbying power in states, helping them understand that dispensing with textbooks and instead teaching digitally with print-on-demand for those who need it could benefit students much more. COVID-19 has accelerated all this by about five to ten years.

While virtual learning solutions might challenge the value of low- to mid-tier higher ed college programs, can they challenge the quality of education that an MBA from an Ivy League college promises to deliver?

I think top schools will stay highly differentiated for a long time. My advice for people thinking about going back to business school is always the same (I went to MIT’s Sloan School): If you can get into a top 20 business school, go. Quit your job. Put in the money. It’s worth it. This is unlikely to change for any professional graduate school environment where the network you build is likely more valuable than the education you receive.

Virtual learning solutions won’t likely have any impact on physical attendance and the hybrid participation at top-branded schools. It will, however, have a devastating effect at the low end.

Many universities and colleges in this country simply aren’t very good and should go out of business, and I think they will. Unfortunately, several good schools with small endowments will also fail. In the public sector, there’s no clear path to failing and closing, but the subsidy that low-quality schools get from Title IV and from their states will fall and is better spent on new solutions anyway. I think you’ll see a lot of universities finally admit they’re in structural bankruptcy already.

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About Hunt Lambert

Hunt Lambert has 35 years of experience at the intersection of rapidly changing technology, markets, and regulations. He most recently served as Dean, Continuing Education and Extension School at Harvard University from 2013 until January 2020. Hunt is a Founder of CSU Global Campus, a fully online public university, and former Associate Provost of Colorado State University (CSU) OnlinePlus. He is an expert related to university commercialization and start-ups and has helped start 25 companies in 12 countries as well as 15 CSU IP-based start-ups.

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This article is adapted from the May 20, 2020, GLG teleconference “Higher Education in a Post-Pandemic World.” If you would like access to this teleconference or would like to speak with Hunt Lambert, or any of our more than 700,000 experts, contact us.

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