Bonus Episode: Town Hall on Higher Education

Scott hosted a live town hall with a panel of experts on higher education to answer listener questions and provide some clarity on the challenges colleges and universities now face in wake of the pandemic. Who Will Thrive, Survive, Struggle, or Face Significant Challenges? Please take our quick survey to tell us how we can improve The Prof G Show: https://forms.gle/xVRfqCKrrNr9xzor5 Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Scott Galloway?

  Good evening. It's 1800 hours. My name is Scott Galloway, NYU Stern School of Business, Professor of Marketing. Thanks for joining us tonight in our Town Hall, if you will, talking about the future of higher education. We're going to bust into it with some slides, attempting to encapsulate some of the activity around higher ed and why we here believe that it is ripe for disruption. And then we're going to move straight into your questions. And joining me to help round out or bring some real domain expertise is our esteemed panel in order Anastasia Crosswight is a friend and the former Associate Dean at NYU Stern School of Business, and she's a core member of the Education and Nonprofit Practice at Spencer

• 0:41Scott Galloway?

  Stewart, a leading global executive search and leadership consulting firm, and has a lot of domain expertise around leadership and what's happening across higher ed. Zakia Smith Ellis, Services Chief Policy Advisor to New Jersey Governor Phil Murphy, where she's responsible for developing and directing the governor's policy initiatives and coordination with the cabinet. Previously, she served as New Jersey Secretary of Higher Education, responsible for policy development and coordination in the state. Prior to that work in New Jersey, Zakia worked at the, in the Obama administration as a Senior Advisor for Education at the White House Domestic Policy Council and as a Senior Advisor at the US Department of Education. And finally, Bob Shireman is the Director of Higher Ed Excellence and a Senior Fellow

• 1:25Scott Galloway?

  at the Century Foundation, working on education policy with a focus on affordability, quality assurance, and consumer protection. Bob founded the Institute for College Access and Success in 2004, and in 11, 2011, launched the policy organization California Completes. He also served in the Clinton White House as a Senior Policy Advisor to the National Economic Council and in the Obama administration as Deputy Undersecretary of Education. Okay, let's light this candle. Let's try and get through way too many slides in around 10 or 12 minutes. 3,000 people registered. Welcome. It's a mix of parents, students, and most likely tenured professors who are going to tell me I'm wrong and that I'm not helping. Anyways, the current situation.

• 2:10Scott Galloway?

  Higher Ed, we are really good, when I say we Americans, at software, weapons, media, and universities. We tend to dominate, from at least a brand equity standpoint, consistently the list of the world's top universities. However, we have a problem. These universities have become the university system which used to be the upward lubricant for the middle class in America has slowly become the caste system, where the top 1% or kids from top 1% income-earning households are 77 times more likely to attend an Ivy or an Ivy plus institution, which is essentially an elite institution, than those from the poorest quintile. You could argue that at 64,000 students total, the Ivy League is not really a higher education institution, but a luxury

• 2:52Scott Galloway?

  brand or a hedge fund that educates the kids of their investors. Florida State at 75,000 students, Ohio State at 55,000. The Ivy is really more spectacle than historic. It's our public schools that kind of determine where America does or doesn't get traction. As you can see, we do have a caste system, kind of where you're born is more important or a larger indicator of where you're going up in school in terms of the wealth of that household. We also see incredible bloat across universities. I'm picking on the University of California system, my alma mater here, but we have seen just an explosion in cost across administration in higher ed. At the same time, we've seen a flattening or even

• 3:34Scott Galloway?

  a decline in many states of state and federal funding being afforded to institutions. And we've, as a result, I've seen in it just an absolute explosion in the cost of education. Typically, spring is a nervous but joyous time. And our thesis is that it's become a season of despair and real financial insecurity for households as their kids don't get into the school they wanted and get downgraded and end up in an ugly conversation around whether they can afford to spend the price of a Mercedes on what has become increasingly a Hyundai certification. So now that we are moving to all online, and I believe increasingly every day more universities are going to announce they're going online because we have figured out that our super-spreaders are young people and that I like to think

• 4:19Scott Galloway?

  that people who run these universities are smart enough to realize they don't want to be the nursing homes and the cruise ships of the next stage of this pandemic. And once those tuition caches, tuition checks cash, I believe they will become increasingly practical around announcing they're going all remote. And I believe we're already starting to see that. Once we're all remote, a snarky way of looking at this is that a streaming video platform spends billions of dollars to develop original original IP and content that they stream over broadband. So effectively, when we're all remote, we have the most expensive streaming video platform, which is Harvard at fifty thousand bucks a year. So we have, um, there's a lot, we had got some pushback around the sticker price is a bit misleading because some of the

• 5:02Scott Galloway?

  better universities, actually, the net tuition has gone down, which again kind of indicates income inequality because the top universities tend to attract students or the best students. And obviously, these students are paying less than just good kids versus remarkable kids. But we've still seen just an extraordinary increase in the cost of education. And for those of you who aren't following along on YouTube, these slides will be made available. We've also seen stagnant uh growth in terms of the number of seats being offered. So it's not as if all of this additional tuition is expanding the offering of the opportunity across the US. It's not. And we've also seen enrollments uh peak up a little bit, but start to decline again.

• 5:42Scott Galloway?

  I will say the University of California has increased its enrollment about thirty four percent in the last twenty two years. So I I don't want to make blanket statements or too many blatant statements. I'm making a few of them, but some have not lost the script and are sticking to their original mission of expanding opportunity across their populace. So we have seen again, uh, some universities, again, you see increase their enrollment relative to enrollment across the US. But we've seen admission rates plummet. I did some data here. I applied to UCLA in nineteen eighty two. The admissions rates were sixty three percent. Now the admission rates are twelve percent. Which means that UCLA no longer has the latitude to admit the unremarkable sons of single immigrant mothers who lived and died secretaries.

• 6:22Scott Galloway?

  Yours truly and can only accept really two types of people. One, the children of rich kids who can afford the test prep. Industrial complex tutors have the right people, know somebody with their name on the side of a building. And the second cohort cohort, what I would refer to as freakishly remarkable fifteen to seventeen year olds. We are admitting a top one percent. We're doubling down on them. But the question is, um, or what I think we need to acknowledge, and I can prove this mathematically, is ninety nine percent of us, ninety nine percent of our children are not in the top one percent. And is that who we want to to divide all the spoils here? And as you can see, tuition has absolutely exploded. This persists across states, across almost every public system in the

• 7:05Scott Galloway?

  in the US. The chin that has been stuck out here, I mean, simply put, when you raise prices faster than inflation with no underlying increase in productivity, go into an Apple store, buy a Mercedes, even go into emergency room, it doesn't look like 1980. Go into almost any university classroom, and it would be difficult to tell whether the number one show on TV is Seinfeld, or I don't know, whatever it is now. But the things haven't changed a whole hell of a lot. What's changed is the tuition. We're seeing some online growth, but our belief is that there's going to be tremendous disruption sponsored by venture capitalists whose greed and lands are going as they see a huge opportunity to come in and take advantage of this excess margin.

• 7:50Scott Galloway?

  And as parents and consumers and students get more comfortable with remote learning, we're going to see a massive investment and a narrowing of the delta between offline and online offerings. And also, it's not binary. We think the majority of higher education institutions will end up at a hybrid model. So we're seeing an accelerant plans for the summer. It looks like almost half are going to be in some sort of hybrid or all online. I think that goes to three quarters in the next two to three weeks. And we're seeing a tremendous amount of increase in search or inquiries queries around people interested in online learning.

• 8:26Scott Galloway?

  So we got in a ton of trouble here. We decided to try and quantify this and tried to come up with an index and then plot that index and who thrives, survives, struggles, and is challenged. We came up with two axes. When institutions are vulnerable, and then who offers low value to high value. Now, just to go through our methodology, and this data sheet is available to anybody who wants it online. We saw value as a function of your credential or the credential of the university. I think that's the primary reason people go to school, quite frankly, the experience. And then their education, we measured the credential by the school rank, the search volume, the admin rate, high admin rate is bad in terms of brand equity. The experience as rated by niche and the education we assess based on the 15 and 30 year net present

• 9:11Scott Galloway?

  value and also the instructional spend per student. And then we took that, we times each of those three factors or multiplied by each of those three factors and then divided it by tuition to come up with a value score. In terms of vulnerability, we look at the endowment for full-time student, large endowments give you some cushion to survive this or any other exogenous impact. And then the percent of international students, that is typically been a feature, it's turned into a bug. A lot of universities claim that they let in international students for diversity. I think that's bullshit. We let in international students because they pay full freight. We could increase our diversity at universities if we let in more low-income Americans. I find that the international students at NYU are strikingly homogenous. They're essentially the kids of the richest people in that given nation.

• 9:55Scott Galloway?

  So let's look at some of these, let's look at some of these schools that we scored. UNC, we saw as thriving, very high credential, very prestigious college, fantastic student experience that pays off in terms of your income earning potential post, post-graduation and also a fairly low tuition, a decent endowment and international students. And by the way, I don't, I'm not biased against international students. I just think at this point, you're having more international students as a vulnerability. International students are probably not going to show up, I would imagine, because of the xenophobic tropes coming out of the White House and just a general acknowledgement that the US is a, is kind of on fire right now. And so when you're paying full freight to go to a hotel that is virus-ridden and the

• 10:40Scott Galloway?

  manager of the hotel is racist, you might decide just to stick at home for a semester a year. And I think we're already seeing that. Purdue, we had is survive and that is decent credential, good experience, decent NPV scores, good value in terms of tuition, but a relatively, relatively modest endowment and also a decent amount or a vulnerability around higher than average international student struggle, low value, low vulnerability, meaning not a great degree, but pretty bulletproof. A school like Randolph, fairly low rank, very mediocre student experience,

• 11:22Scott Galloway?

  decent, not great, NPV and then expensive, so sort of bad but expensive as a value proposition to the end consumer, but at the same time, very strong endowment, which means they have a lot of cushion, a very engaged alumni and can survive something like this. Sarah Lawrence is an example of a school that we feel is in real trouble. Just an okay brand, very high admit rate, very weak student experience, low NPV scores and a high tuition. So expensive but bad in addition, very little, very little cushion. We think this is the sweet spot of what is to education, what department stores are to retail and that many of these schools may begin a death march

• 12:07Scott Galloway?

  because you might see a waterfalling of the top tier schools have no problem if 10, 20% of their students decide to take a deferment or a gap year, they just reach into their huge waiting list. But this creates very strong pressure on the tier two schools, but they're still okay as they can go very deep into their waiting list. And then the tier three schools see a demand destruction of 30 to 50% and they go into the waiting list which they don't have. And when you have an economic model that's very high fixed costs based on a movable personnel costs and high infrastructure costs and very high gross margins, that works really well on the way up. It is, it is deathly on the way down because just 10 or 20% of your students not showing up flips your economic model upside down. I think we're experiencing what I would call the great dispersion.

• 12:52Scott Galloway?

  And that is, if you think about healthcare, 99% of people who've contracted, endured and developed the antibodies for COVID-19 will have not entered a doctor's office, much less a hospital. And as a result, there's going to be an explosion in remote medicine and telehealth. The same thing is happening at campuses, and that is remote learning might dramatically expand the role of the campus. If loosely speaking, or theoretically, if 50% of classes take place online, you effectively double the size of the campus, which has traditionally been the throttle and kind of the mechanism for the cartel that has become higher education. So where do we go from here? In about three and a half weeks, I kick off my course at NYU, 400 students at $7,000 apiece or $2.8 million in revenue.

• 13:35Scott Galloway?

  My agent takes a 99% commission, but that's effectively $233,000 a night to listen to me on Zoom for two hours and 40 minutes, or $583 per night per student, or $1,500 a minute. There's tremendous room for innovation here. You're seeing a lot of professors start their own courses, and you can do something half as good, but if it's a 10th of the price, you obviously have a 5X return in value. Or even if it's only a third as good, but you charge a 10th of the price, you're offering three times the value. Universities have raised their prices so fast that they've just created so much margin opportunity for upstarts and new companies. So we're seeing more students going online, and we're seeing, obviously, the benefit

• 14:20Scott Galloway?

  from that is lower costs to deliver. I think the future is going to involve some sort of hybrid. I apologize, I'm going fast, but I want to get through this. And I'd like to think the silver lining here, and I was on a call this morning with the chancellors of Berkeley and UCLA and one of the regions, I think there's opportunity for a grand bargain, where hopefully we can get government to fall back in love with universities. And in exchange for dramatically decreasing the cost per student of education through the use of mix, the mixed use of big and small tech, we could lower the cost. But at the same time, if we could get increased funding from governments and from alumni, we might be able to dramatically increase enrollments. There's this nonsense that this will dilute the brands.

• 15:02Scott Galloway?

  Almost every major university in the tier, in the top tier, whether it's Michigan, the University of North Carolina, Harvard, or UC Irvine, would acknowledge that they could have doubled the number of admits and not lost any quality across their students. We have remarkable kids who are no longer getting into great schools, no longer getting into good schools, but getting into average schools and paying the price to go to a great school. We've seen admission rates go from just about forty percent just twenty years ago to thirteen at the University of California, Los Angeles, and doubling the admissions rate would only take us back, get this, just six years. So with that, with that, we have our panel, and we're going to bust into our first question.

• 15:47Speaker 01

  Hi, I'm Rufen Arisimhan from King University. I'm a math professor, and King is a regional public university here in New Jersey. My question to you is, what do you feel are the main challenges for public institutions, such as for your regional colleges and universities, as well as community colleges that serve the majority of the college-going population? Going forward, what do you see as one of their main challenges? And what is it that they can do better? Thank you.

• 16:20Scott Galloway?

  Thank you, Professor Narisimhan. Zakiya, any thoughts?

• 16:25Speaker 02

  Well, yes, love King University. It's one of the gems in New Jersey's public higher education ecosystem. It serves a lot of low-income and first-generation college students. It's very diverse, one of the most diverse universities in the state. Having said that, they face challenges that are similar to a lot of public institutions, which I would say center around affordability, kind of similar to what's not as unaffordable as one of the slides this guy just showed, but for the student population that they serve, really, they struggle to pay, you know, five thousand dollars out of pocket. And so even if the net price of Kane, I would venture to guess, is maybe somewhere around fifteen thousand dollars after all room and board and all expenses are taken into account,

• 17:07Speaker 02

  it's a lot for a person who's not wealthy. Having said that, they also struggle with completion. So unfortunately, those students also need a lot of support, a lot of wraparound services, and the state doesn't provide probably as much support as they need, frankly. And that means that not that many students that start finish. So you've got people who are paying, they're taking out loans, and they don't complete. So you essentially have a potential to be in a worse situation, which is, I would say, one of the biggest challenges of colleges in this category overall, is that you have the potential to have students take on debt. Go and then not actually complete and have the debt but no degree. So that is a big challenge and how they can help more students actually complete their degrees.

• 17:49Speaker 02

  While being affordable is is the the challenge moving forward. And if they can do that by trying to actually, I think a lot of folks don't focus on completion. They focus on rank, they focus on trying to be NYU. Not saying this about Kane, but they focus on a lot of other things other than students actually completing. And a lot of other priorities in terms of how they spend their money other than ensuring that affordability for the people who can't afford it the most. They chase international students or people who can pay rather than thinking about how to help people who can pay pay less.

• 18:19Speaker 03

  Next question.

• 18:21Speaker 04

  Hey Scott, Tyler Dandrea here from Nashville, Tennessee. Simple question. What areas do you think colleges and universities should make cuts to financially? And what areas do you think they will make cuts to? Thank you very much for taking my question. Have a great day.

• 18:41Speaker 03

  Yeah, you know, it really depends on the kind of college that we're talking about here in place like Nashville. You've got Vanderbilt University, a selective private university, spends a lot of money. And probably has some bloat in administration as Scott mentioned. But another big area is highly selective universities. Spending money to attract rich kids with high test scores, people who basically don't need financial aid. Instead of providing financial aid to enroll more low income students. That brings up the issue of of the ability or the lack of ability of colleges, selective colleges.

• 19:25Speaker 03

  To work together to enroll more low income students. They end up competing in a way that makes worse the stratification in in elite higher education.

• 19:38Speaker 03

  At the same time, Tennessee has some very affordable public institutions, community colleges in the state, good transfer policies. And I think that's something to build on. And I think we need to recognize that online education is not the best approach, especially for a lot of low-income students who come from families without a lot of college experience, where being immersed in the academic environment makes a big difference. And we need to make sure, we need to work on providing them with the opportunity to have that experience because a, you know,

• 20:22Speaker 03

  half, half as effective, half, half the quality is not what we want to provide them. We want to provide them 100% of the quality. And if we can get them, if we can get Vanderbilt to enroll more low-income students, so much the better. But let's also embrace our public institutions and provide the federal and state support so that they can continue to enroll low-income students as well.

• 20:48Scott Galloway?

  Thank you, Bob. So Anastasia, I'm going to put you on the spot here. I want to put forward a thesis. Both, both of us worked at NYU and let's

• 20:54Speaker 05

  What else is new, Scott? Always putting me on the spot. Go for it.

• 20:58Scott Galloway?

  Well, you no longer work there and I'm, I'm pretty sure I'm close to being fired. So like, 190 million dollar budget, I think I could cut $30 million in 30 days if I had the power. A CMO who does nothing but trying to attract more applicants when we have a 14% admin strate, vice chancellor's of diversity inclusion, when we have the most diverse and inclusive place on the planet, and we'd be better off spending that money to support households or kids of color who don't have access to this type of university would make us much more diverse and inclusive communications departments that are half a dozen strong and a third of the faculty that should be put on an ice floe that stopped being productive about 20 years ago. Isn't this

• 21:43Scott Galloway?

  place just rife with grotesque fat and waste?

• 21:48Speaker 05

  You're not going to get me to say, agree with that, Scott. But I will say, and I'm not going to talk too much about NYU in particular, but I would say, yes, there has been a growth in administration and full stop, former administrator, so you could argue as part of the problem. But I would say the challenge that a lot of universities face is they are not just a university, right? There are so many components to a big, complex place like NYU. And I do think that leads to, to added services on services. Like, I know NYU has had to quadruple the number of mental health administrators in the past five years. You know, that is considered administrative.

• 22:32Speaker 05

  So there are categories where the growth makes absolute sense. You know, I also think, to be honest, as someone who worked in the dean's office, we are con- we were constantly bombarded with requests to comment on this, write a memo on this, what's our view on that? You actually do need people in there, or you are absolutely deluged. So I also think the thing that we're not talking about, but it's in the, in a lot of the flow that we've been discussing, rankings. Rankings drive so much of the decision-making of a lot of universities. And it drives a lot of the things that you're talking about, right? Giving financial, as Bob mentioned, giving financial aid, merit aid to students with high test scores.

• 23:17Speaker 05

  That is a direct correlation to wanting to move up in the rankings, right? The US News has a stranglehold on the public's perception of quality of higher education in this country. And that's a real problem. People, I know people pick, pick schools whether they're 12 or 14, right? It's, it's, it's nuts. So, once you're in that rat race, it's very hard to get out of it. And I'm not quite sure how, how, how you, how you break that cycle. I know a lot of schools have talked about ignoring the rankings. But I'll tell you, when you ignore the rankings, the alumni and the students come after you hard when you drop in the rankings.

• 24:02Speaker 05

  So it's not easy.

• 24:04Scott Galloway?

  Big topic, Zakiya. Any thoughts? Cost cutting?

• 24:07Speaker 02

  Um, well, cost cutting, there's, I think, um, I would agree with Bob in general. A lot of institutions spend money on students that don't need to get money. Yeah. And they may spend real money, or they may spend fake money. More often, they spend fake money. Right. So like, they say their tuition is sixty thousand dollars. They, um, are gonna give you a ten thousand dollar scholarship, so you've got a discount. But they actually never had ten thousand dollars to give you. They just, like, wrote off the price. And so, um, it's, it's a really insidious, um, uh, game. They could do the same thing for a low-income student, but they don't. Uh, and, and so, anyway, it makes their financial aid have to, if they have a real grant, that real grant has to actually buy down their, their ten thousand dollars. If they had a grant from a church, that church actually had to give them ten thousand dollars to give to the college, whereas the college could have just said, "We know you're never gonna be able to pay the sixty thousand dollars. Guess what?

• 24:52Speaker 02

  Your price is really, you know, forty thousand dollars. Then you could use your real ten thousand dollars to actually make your price thirty thousand dollars, and then have to borrow less." So, financial aid is just a whole other piece. But I would agree with Anastasia in terms of, um, rankings and how that plays in people's minds. I think a large portion of why people might not be willing to do online or something is because they have this perception of quality that is really not rooted in any objective criteria. It's just based on how they feel about a school, which is one of the hardest things, though, to change, because it's based on, like, centuries of history, and that's kind of the basis for the Ivy League, you know, whole existence. Um, you know, an example, you know, you get the best and the brightest, and you kind of cultivate them. But if you had to educate the students that, you know, Bronx Community College had to educate,

• 25:37Speaker 02

  how well would you do with them, kind of thing? So, it's, is it really the kind of foundation of the school and all of the resources that the school has, and all of the supports, and the great faculty? Or is it a function of you have really, really smart students that you, you know, picked from the, the creme de la creme, and they would probably do well if you put them in a library with nothing else, versus, um, what the school really has to offer? So, it's chicken and egg. Um, but cost cutting, certainly on the financial aid side, but I would just say, generally, people are paying for the perception, so it's hard to think about how you bring that cost down, if that's what people are paying for. And it's a ephemeral piece that is kind of made up.

• 26:11Scott Galloway?

  Thanks for that. Next question.

• 26:13Speaker 06

  Hi, Scott. My question for the panel is this. If you're at a university that is in your parish category, and you've been predicting this for quite a while now, and nothing has changed course, but you're a faculty member who does see themselves as innovative, can think about problem-solving, but it is not gonna be part of the systemic solution for the institution. Are there pockets, are there entrepreneurial pockets where you can still exist as an educator? Are there going to be disruptions so that there are now small, small scale educational and offerings that can be set up by entrepreneurial faculty? What do you see as a disruption that might happen here so that individuals can actually redefine what education is? Thank you.

• 26:54Scott Galloway?

  Uh, thanks for that, Jillian. Um, so my sense is if you understand technology and you understand how to shape a course and you have the initiative to reach out to the faculty or the leadership in a university and say, I'm interested in putting together a strong retail oriented course and, and have the skills to figure out the technology and how to deliver this pedagogy online. My sense is university leadership would welcome that with open arms. And if you don't find it internally in your own institution, uh, I'm working for an online education startup right now, section four, and we're having a very difficult time finding both professors and

• 27:37Scott Galloway?

  course developers and technologists who understand how to deliver education online. This is going, you're going to see on almost every venture capital memo outlining their new areas of investment, you see online education. So if you're really sincere about making the investment and it's not easy, I, I struggle with these technologies. I find it hard. It's much easier for me to walk into a classroom and just press play and go on kind of auto pilot. But if you're willing to make that investment in understanding technology and you feel you have the skills to deliver it online. My sense is university leadership i- is very, very open to that. Um, anyways, I'll open it there. Any, any, Bob, any thoughts on that?

• 28:21Speaker 03

  I agree. I think at a, at a parish, uh, university or, uh, challenged, I guess is the new name. The leadership is eager for people with solutions. And if you can, if you can present some, some ideas, I think there's a good chance they go with it. And if it's the kind of place where they're, where they're challenged and they, and they're not, then, then I would look to go, you know, look to go somewhere else because we're gonna, because the, the coming year or so, the coming months, we are going to see a lot of institutions that have been in that category that are going to close. It may or may not be the one you're at, but, but a lot will close.

• 29:06Scott Galloway?

  And just before I open it to Anastasia and Akira, what Bob is referencing, in our initial quadrant, I labeled low vulnerability, high vulnerability, low value is perish. And I heard from a lot of administrators and leadership saying something to the effect of, Scott, I'm dealing with COVID. Scott, you really don't understand the nuance of the strength of my university. And you're up there in Soho and you are not helping. And I think that was a fair criticism. And so I've asked all of them to submit their comments on where we got the data wrong. We've consistently updated the data. For example, I was using out of state tuition to rank some on the value. And they said, that's not fair.

• 29:50Scott Galloway?

  It should be a blended of out of state and in-state. And we even just changed the nomenclature to struggle because when, when an alumni sees the term perish, it sounds as if they were freaking out and calling these overworked administrators who have a lot of moving parts right now. Anastasia, Zakia, any thoughts on Ms. Okenpil's question?

• 30:11Speaker 05

  I mean, I have to agree with everything that's been said. I mean, my experience is university leadership is usually begging for professors to be entrepreneurial and to think outside the box. And, and, you know, one of the silver linings of this COVID thing, and I think you and I have talked about this, Scott, you know, the median faculty member went from

• 30:36Speaker 05

  Online education over my dead body to I'm not stepping foot in a classroom until there's a vaccine almost within two weeks, right? So that shift alone, I think, has opened a lot of professors and academics' eyes to the potential of what online could be. Now, to be completely clear, what most of universities have been delivering the past few months is not online education. It is, you know, an emergency Band-Aid thrown on Zoom and other technologies, you know. What real online education is is very different. But I do think more and more schools, now that professors and academics are more open to even being on camera and this kind of, I think there will be more opportunities

• 31:20Speaker 05

  for entrepreneurial professors to try new things and see what works and potentially bring revenue to the institution.

• 31:29Speaker 02

  Yeah, I would say, I don't know if what she, her question was more so about how to help the college, which I don't know if some of these colleges can be, I guess they can be helped, and I'm sure they would appreciate any innovative thoughts, or that she realizes that maybe she can't help the college exist in the same way and wants to know, how can she kind of make it on her own outside in the world? And there, I would say, you know, the things that, you know, Scott is actually talking about in terms of how do you promote what you have to offer. That said, I think the harsh reality that we sometimes have to deal with is that not everybody is willing to pay for like, just the pure knowledge of whatever and that the number of people who have to offer the pure knowledge of whatever is, if it's just, I teach this class and I want to know how I can teach the same class.

• 32:13Speaker 05

  Yeah.

• 32:13Speaker 02

  To make money off of that, that is going to be a difficult thing because unfortunately, there's probably hundreds or thousands of other people who teach the same thing. But if it is, I have some unique thing to offer the world that no one else has to offer, then that is what, you know, innovation is made of and what you can build a brand on. And but if you're teaching the same thing that every other person is teaching in a slightly more interesting way, I'm not sure that that's a moneymaker.

• 32:35Speaker 03

  You know, there was a, somebody on the chat said something about, we have to think about synchronous versus asynchronous delivery. And I think that's really important. I feel like we're sort of mixing all these things up and sort of hurt online as if it's the same thing as, you know, as if it's the same thing as classroom. When really, you know, the class of the discussion section of 10 that is done online versus in a classroom costs pretty much the same to, to make that happen. You know, maybe you don't need the room and people don't need to travel, but it's still from a labor. You know, if you have a high cost faculty member from a labor standpoint.

• 33:19Speaker 03

  And I think we can get a lot better about making use of that combination. As Professor G said, the hybrid of, you can do, you can do lectures that are, that are recorded or that are mass lectures and do discussion sections in, in other kinds of ways. And I think that the current, the COVID, COVID has opened up those opportunities more just by forcing everyone to learn quickly. How to do Zoom and things like that. I think that that's been a positive.

• 33:51Speaker 07

  My question is around accreditation. So now more than ever, so many universities are offering programs and courses being taken online only or some hybrid version of that. So I want to know what does accreditation look like for the future? Do you see it changing? And if so, how?

• 34:10Scott Galloway?

  Isn't accreditation really at the end of the day, just a weapon of mass entrenchment among people who see a vested interest in maintaining the status quo? And I mean, that's, that's what I believe. The, the, the good news is you're starting to see universities that are so desperate for capital, like the University of Pittsburgh, they've partnered with outlier, which is saying, all right, calculus has been taught the same way for the last hundred years. Calculus is a $7 billion business in the United States. At least calculus courses cost kids $7,000, $7 billion a year. So we're going to teach it at 200 bucks. And we've got the University of Pittsburgh to award accreditation or units such that you can transfer into a more expensive university. And arbitrage, almost like what you do with junior college, two years then going into a university. It feels to me like accreditation

• 34:55Scott Galloway?

  is nothing more than, you know, a guild. Do we need accreditation? What's, what purpose does it serve?

• 35:03Speaker 02

  Bob, this is all you.

• 35:05Speaker 03

  Sure, okay, I'll jump, I'll jump in here, say, you know, I, I have a lot of issues with accreditation, but I think accreditation has been extremely important to this country and extremely important to, uh, to higher education. You know, you go out there and you go look at some of the, at least pre-COVID, some of the storefront colleges that are not accredited. Yep. It is not pretty. The for-profit schools? Pardon me? You mean mostly the for-profit schools? Well, so, yeah, I mean, they're, they are often for-profit schools, but a lot of for-profit schools are accredited. It's different accreditors than the ones, it's often different accreditors than the ones that, that accredit the traditional colleges and universities.

• 35:46Speaker 03

  But there's nothing about accreditation that prevents colleges from accepting credits from, um, students taking a, uh, taking courses that have been offered in creative kinds of ways. And I think accreditation, accreditation has been really important at preventing, especially the federal government, from asserting direct control over higher education.

• 36:10Speaker 02

  They're the only thing that stops the federal government.

• 36:12Speaker 03

  It has been the only thing, exactly. And that, and right now with the president, we have, we really need accreditation as a, as a separation between, uh, between the federal government saying, you know, here's, here's what it takes to be a quality institution, and instead having it be higher education itself that sets those definitions. There's a lot of flexibility, a lot of things we can improve about it, but I would be really cautious about opening things up.

• 36:42Speaker 02

  And I would just add that accreditation, in the same way that it doesn't prevent a college from taking credit, it doesn't mean that they have to. So you could be accredited and you don't, they don't have to take, I mean, that's, it's a bad side of it. But, you know, Harvard and University of Massachusetts are both accredited by the same accreditor. Harvard could say, we don't want to take your credits from UMass, um, even if they're, so that's still their purview. Does it solve that problem in the other direction either?

• 37:08Speaker 03

  That's a good point. All right, next question.

• 37:12Speaker 08

  I'm a rising sophomore at Mount Holyoke College and there have been recent reports put out by analysts and professors discussing the future of universities, one being Mount Holyoke College. So my question is if you can provide some advice for those universities on how they can financially survive this pandemic while still providing quality education at a decent price, especially now that we're all online. I think that's become a huge issue. So that and also how universities can support international students more and also middle class families because they tend to get the lower end of the stick. They make enough to send their kid to college but not enough to pay full tuition and yet

• 37:53Speaker 08

  still don't receive the financial aid they need and often have to struggle to come up with the funds or have to send their child to a cheaper school because the schools don't really have any mercy on us.

• 38:05Scott Galloway?

  Zakiya, Bob?

• 38:07Speaker 02

  Goodness, I think there are a lot of pieces in there. I'm trying to parse out. One, I would, I will start with the end where she talked about middle income students and I think a lot of students feel this way. I would say though, unless you're very wealthy, it is hard to pay for college. And I think that's the challenge and sometimes people see like financial aid going to the poorest kids. It's like, even if my family could afford to like get me to college, I wouldn't have rather been, you know, so destitute, destitute poor that I like needed, you know, a full, a full ride scholarship. I wouldn't have rather had that, you know, that background. It's just the case that I don't have enough to be able to really afford this. So we're really in a situation where the majority of families, I funded reports when

• 38:51Speaker 02

  I was at the foundation that showed like how affordable college was and what does it actually mean? And like by any general standard of what you would think is reasonable for people to come out of pocket, even if it was, you know, you had to save up for some time, most families cannot afford the average tuition. And I think that is, when you showed some of the statistics earlier and the pushback you get, I think a lot of colleges want to say that they're affordable and they say, you know, no, you know, it's not, sure, your tuition isn't, everybody's tuition isn't $60,000 or $70,000. But the thing that you have to remember is even if your net tuition and fees and room and board and all of it packed together is really Quote-unquote only twenty thousand dollars or quote-unquote only fifteen thousand dollars.

• 39:32Speaker 02

  Most families in America do not have an extra fifteen or twenty thousand dollars to give. And that's just the stark reality, especially since family incomes haven't really risen when you're adjusting for inflation. So that's just, I think we haven't really come to grips with the fact that most people in America cannot afford college. Most people in America don't have enough in their savings account. Most people in America don't have enough to live on if they were to lose their job for six months. Most people in America don't have adequate retirement savings. And so they certainly don't have anything extra after they should have done all those things to help their kids pay for college. And unfortunately, sometimes what they do is they'll cash out their retirement, they'll cash out these other things. They'll forego things to help send their kid to a fancy pants college.

• 40:14Speaker 02

  And, and that is what's crushing us. So we'd have to have a solution. Unfortunately, I don't have a solution, but I do just want to acknowledge, and I sometimes think that people in higher education want to gloss over the reality that most people can't pay for college.

• 40:28Scott Galloway?

  It does feel as if there's a danger zone, though. And there's a, so lowering kids from low-income households faces so many obstacles before they even get to the point of applying to college. It does feel, though, I mean, I was a Pell Grant kid. I applied to school with thirty-eight thousand dollars in total household income. And the system or UC did a really good job of helping me financially. And I remember some of my peers whose parents made a good living but not a great living. Their college seemed to be more of a strain for them because they, they didn't qualify for financial aid. It seems like there's this danger zone in the middle. In terms of the students' question around what can be done.

• 41:10Scott Galloway?

  The thing that really disappoints me is if you think about who's taken the hardest hit in terms of industries through COVID-19. It's essentially industries where you consume the product standing or sitting shoulder to shoulder. So restaurants, sports, hospitality, and education. But if you look at the other industries, they've shown tremendous agility in terms of delivery, remote, apps, and quite frankly, cutting costs. They immediately furloughed people, they immediately fired people, they immediately said, this is our new reality. And my impression of the academic kind of industrial complex is we all want to pretend this isn't happening. And we don't want to cut costs and we want to pretend we want to make stride and statements that

• 41:53Scott Galloway?

  we're welcoming students back to the campus and everything's going to be the same sending your tuition checks. We haven't had an honest, open conversation with our, our consumers. If, if I could have a man a wand and say, what should we be doing? I think we should reduce costs 10 to 30% across the board. Our crisis is a terrible thing to waste. Every 10 or 20 years, if an industry has to cut costs, it's actually a good thing. We haven't done it in 40 years. And also to go to the parents and say, your kid's experience is going to be impaired. There's no doubt about it. We're cutting tuition by 15, 30, 50%. Lean on alumni to help out and have an open, honest conversation. But this, this consensual hallucination that we look forward to welcoming the kids back.

• 42:38Scott Galloway?

  And to me, and, and by the way, at NYU, we're raising tuition 3.5% because nothing's wrong. And it just strikes me as every other industry is facing the music and education isn't. And I really, I think it's only, I think denial is exceptionally expensive and only makes our chin bigger and more easily shattered in the next few weeks. Bob or Anastasia, any thoughts?

• 43:02Speaker 05

  Well, I mean, I, I, I agree, although I would say that a lot of schools are furloughing a lot of people right now. So I don't, I don't want the community thinking that, you know, everybody is fully employed in higher ed. A lot of institutions are making really hard choices. I've talked to clients who are trying to decide what percentage of people are going to go on furlough. And that was in April. So it is happening. I will say it tends to be happening at the schools on your list that I can't remember the nomenclature now, but are, you know, in the struggle or challenged zone more than I would say the NYUs and, and other institutions. But I think you're right. I mean, I think, you know, like every other industry, and look,

• 43:46Speaker 05

  higher ed doesn't even like to be called an industry. So I have a feeling I'm going to get some pushback in even calling it that. They're going to have to make some hard choices. Whether it's systemic choices or they have to just deal with the current crisis depends on the institution, right? Scott, we've talked about that. Like, you know, the, the schools that are going to thrive may have to do short-term cuts, but I don't think they're going to cut their faculty numbers dramatically over.

• 44:13Speaker 05

  Over the long term, I just don't think that's going to be what their play is. I think other institutions are going to have to make those hard choices.

• 44:20Scott Galloway?

  Bob, any thoughts?

• 44:21Speaker 03

  I, I, I agree. There's a lot of denial going on. I think the competitive pressures are really problematic, especially among a lot of the residential colleges. Where they feel that they will have that decline in enrollment if they don't make, that they don't make it seem like they're going to be in person. When the reality may well be that they cannot be in person and, and I'll kind of go back to the antitrust issue. The US Department of Justice has been ridiculous over the past couple of decades of preventing colleges from working together to do what's right for students and to do what's right for diversity. And this is a number, another example where

• 45:03Speaker 03

  they probably would have, would get in trouble if they tried to get together and say, we're all going online. You know, instead of all of us trying to keep, you know, let's just all announce that we're online for the coming semester. Nobody's going back to school.

• 45:21Scott Galloway?

  Yeah, Google's not a monopoly, but, but, uh, Pitzer is.

• 45:26Speaker 03

  Right.

• 45:27Scott Galloway?

  Okay, so next question.

• 45:30Speaker 09

  Hi Scott, my name is Amir and I'm here from San Francisco, California. I was just curious to know what your thoughts are in terms of like opportunities for growth and innovation in higher education. Is it around like, obviously fundamentally redesigning the business model? Is it the delivery of education? Is it like, the social experiences or and so on and so forth. So I'd be grateful if you could provide some context there.

• 45:54Scott Galloway?

  And it's, I have some thoughts, but why don't you kick us off?

• 45:56Speaker 05

  Oh yeah, I mean, the thing that, that's struck me during this whole conversation is we are really focused in most of our conversation right now about the, what most people think of as a college student, right? The 18 to 22 year old who's going to a leafy campus somewhere. But where I think the greatest opportunity and what can really bring the greatest good. To the American economy and and is really focused on what higher ed generally calls the non-traditional student, which is defined as either someone who is outside that age band. So let's say a 25 year old, someone who already has a family, someone who's working,

• 46:37Speaker 05

  and someone usually who has a few college credits somewhere, but never quite got across the line or only took a semester. I think that's where the opportunity really lies, both in terms of increasing access as well as really changing the world and the the economic opportunity for a lot of people. And there are places that are working on that, but they tend to be, you know, not well-funded community colleges. You know, you can talk about how the state has really withdrawn from that. But there are also some interesting online-only places that really focus on that. And they tend to be the ones you see on TV, right? So there are the Southern New Hampsters, the Western Governors, the

• 47:19Speaker 05

  Grand Canyons. I think that space is is an interesting one and one that can do a lot of good. Now, full disclosure, Western Governors, I've worked with them, but you know, they are, I didn't know this, but they're the number one teacher of science teachers in the country right now. And they're doing it at a remarkably cost-effective way, right? They had charged 3,500 for six months of study and as many courses as you can get through during those six months. You know, so I think there are some real opportunities in this space. And I want to let Scott, but I may have taken you off not where you wanted to go. But I think that's something that's really interesting.

• 47:59Scott Galloway?

  Yeah, I think there's a lot of, you know, out of crisis comes a lot of opportunity, hopefully, on the public side. I think this is a real big opportunity for public schools to rethink their business model and get back to this notion of much greater admittance rates, educating a lot more students at a lower price. It's easy. You see everything through the lens of your own experience. I went to undergrad at UCLA and Berkeley Graduate School for a total tuition of $7,000. The reason I'm here, and literally the reason I'm here right now, is through the generosity and vision and innovation of California taxpayers and the regions of UC. So, returning to some of that innovation, focusing on our role as public servants, dramatically increasing admit rates,

• 48:44Scott Galloway?

  and decreasing costs. I think there's an enormous opportunity to rethink what college should be. Should it be a certification around vocational programming? There's, you know, as, as, as everything in our society, the people are really getting kicked in the gut here, our middle and lower income people, because what universities have had to literally close down, the vocational ones, because I can teach brand strategy on Zoom, but it's difficult to teach someone how to weld or how to place a syringe on Microsoft Teams. So, and some vocational schools have been fantastic upward lubricants for kids from lower and middle income households. So, more of a European approach to education, I would say. And then in the private sector, there's just going to be extraordinary capital creation here, because

• 49:30Scott Galloway?

  the willingness of students, the willingness of parents to pursue lifelong learning, different types of accreditation, different types of certification, and just the ceiling of price that's been set by education has created so much opportunity around being able to come in with a me too product. There's, I mean, if I were a young person, there's two industries I'd want to be looking at right now. I'd want to look at how technology interfaces with healthcare and how technology interfaces with education. So I think there's tremendous opportunity both on the public side and in the private sector. Zakir, Bob, do you want to add to that?

• 50:06Speaker 02

  I would just say with a thing that you mentioned about healthcare and higher education, I think actually there are a lot of similarities. And I would go back to something you said at the very beginning, which is, you know, we have some of the best colleges, but I would say to something Bob mentioned, we also have Dare I say some of the worst, um, I guess I haven't traveled everywhere, but it's the same thing with healthcare. We have some of the best healthcare, but some of unfortunately the same people, it's lower income people, middle income people. Have some of the worst healthcare experiences. They don't get the fancy hospital with all the stuff. The black mothers, you know, in inner cities don't get the maternity ward with all the birthing center and all of the stuff. And so, um, the disparities are very similar in both systems. The payment structures are very, they're not always similar, but they have a third party payer problem and they have a very opaque.

• 50:48Speaker 02

  Payment structure that has government interference that makes it a very difficult kind of industry to reduce costs in. Um, I think healthcare is more confusing than higher ed on that front, which is a hard thing to do. But it's very similar in that we have some of the best, but it obscures the fact that we also have some of the most challenging places. And the way to reduce costs in both is really hard because of how the payment structure is, uh, situated.

• 51:12Speaker 03

  Um. Yeah, I think there's big opportunities, uh, really in every part of higher education. I think some of the designing, um. Online, the asynchronous type education, ways of engaging, um, people with different subject areas. Um, thinking about it of, of ways that, uh, people can learn and earn that. That credit that can be, uh, that can be transferred is, uh, there's a critical need for that, especially for someone who, uh. Who has a background in technology. And then I would also go to advising, so especially for disadvantaged families, low income communities.

• 51:56Speaker 03

  Uh, they end up being preyed upon by low quality colleges. Mostly because the only person they can talk to is the person who ends up being a recruiter for one of those colleges. There are not advisors they can go to. Rich folks tire, you know, hire these, um, these counselors to help them figure out. How to get into an Ivy League school, but, um, when a low income family in Pittsburgh is trying to figure out. What college can I go to? And really they should probably go to the community college down the street that has a great vocational program. Um, the, and the person they end up talking to talks them into something to into a taking out a loan to go to a, a for profit college.

• 52:40Speaker 03

  Doesn't serve them well and figuring out how to address those advising needs, um, would do a great service.

• 52:49Scott Galloway?

  Okay, so I have a couple of questions to the panel. I have an eighteen year old who's got into a good school. It's gonna cost, you know, room and board, fifty, sixty K. Maybe some financial aid, some loans, but it's gonna cost our family forty K. We make a good living, but we're not rich. And Tulane is saying, or whoever it is, is saying it's gonna be all online. Do they take sick, do they take the fall semester off? Or do we pay the twenty or thirty grand for them to take Zoom classes from, from what's now my office and used to be the kid's bedroom?

• 53:28Scott Galloway?

  Okay, thanks very much.

• 53:32Speaker 02

  I am gonna not answer just because we have colleges in New Jersey. I would say, I don't have any children of my own yet. We'll have one soon and then, you know, eighteen or so years from then.

• 53:45Speaker 02

  So I could say what I would do and what my parents did, but my parents were very, a different kind of parents. I got into a bunch of colleges, thank goodness. And they, they were the ones that said, you know, hey, we don't have any money for you to go to college. I mean, we weren't like, we weren't poor. We were middle class and I don't know what they did with their money. I think they're fantastic parents. They were just like, yeah, we went to college on scholarships. So you should figure out where you're gonna go on scholarship too. And, and so I think they're always, they're a lot lower cost options than Tulane. Tulane is a great school. I have no doubt that they have tried to improve their online offerings since the spring. Hopefully they have spent all summer improving the quality of that online. But I would say, I know that in New Orleans, there are a number of public colleges and community colleges that may offer the same introductory content.

• 54:29Speaker 02

  And I would see about whether, in general, whether it was, this is frankly advice I always give to people, whether it's a pandemic or not, that there's a lot of, again, it gets to what are you getting from the name brand? Is it really all of that? Or are there other options that you could get the same content from and get the same outcome? So it's a personal decision based on whatever you think. But I, there are certainly ways to get the freshman year educational content for far cheaper than thirty thousand dollars.

• 54:56Scott Galloway?

  Like here, you have a bright future in politics.

• 55:01Scott Galloway?

  Well done, well done. Bob or Anastasia?

• 55:04Speaker 03

  I might as well take the, you know, Zia, Zakiya kind of, I'd say leaned it in, while she didn't take a position, she kind of leaned it in the direction of, there are some cheaper options. So let me go the other direction to say that, you know, look, if you're, if you've basically raised your kids with the idea that, you know, okay, we're going to spend quarter of a million dollars for you to go to a fancy elite school and here's the one you got into and the class of whatever we're, we're in now, 2024, you know, there's a lot to, uh, this is not the way I went to college, but there's a lot to like being a part of that class and having the experience that that class of students

• 55:46Speaker 03

  had as freshmen and all the way through. And if you kind of put the money out there, they're, the, the school's going to be putting a lot of money and time and effort to try to figure out, how do we make this an okay experience? And it will be different from anything that's ever happened at the college before, and they will be able to be a part of that experience. And so give it a shot and maybe the next semester or next fall, they'll then have the residential experience with these people that they only knew online. So, you know, I, I think they're both perfectly fine decisions as long as you're fine with spending the money

• 56:28Speaker 03

  on the, uh, what might be low quality and disappointing education, but an interesting experience nonetheless.

• 56:37Speaker 05

  Yeah. I mean, I think it also depends on what your options are in terms of like, can you take, will they let you defer? Or is this your one shot to get into this particular school? And how much does that matter to you? I mean, there are so many factors that go into this. I wouldn't want to tell any given individual a blanket statement, but I do think, you know, and I've talked to some people, some people have gotten into schools that they never thought they could have gotten into this past admission cycle, and they are all in because they don't want to give up that opportunity. Right? And I'm not saying that's right or that's wrong, but I really think you have to think about that as well. If this is your one shot and Tulane is your dream school, and I'm sorry, we're using Tulane, but whatever the school is.

• 57:23Speaker 05

  That might be worth it, but on the same, but I also, yeah, there are plenty of lower cost options, as long as you think you're going to do well enough at that place to get the opportunity to get into such a school. Because I do think, given the way students are reacting, and I'm hearing this all over, returning students are, even if their school is not open, they are moving back to that school city. Supposedly, the real estate market, right around Wash U, right around the DC universities, you cannot get an apartment because so many students are trying to get there and they're setting up their own pods and setting up their own cohorts and, and they want to be with each other in, in a setting.

• 58:06Speaker 05

  So, you know, if this is your shot, I'm not sure you're going to get that shot again next year.

• 58:12Speaker 02

  I would just say, in general, my advice to people is not to, um, not to have a dream school.

• 58:16Speaker 05

  Well, right.

• 58:17Speaker 02

  Again, I don't have kids, so I've never had to say that to somebody, but I just say, like, if you're, if you're set on going to one place, that one place, and you're,

• 58:26Scott Galloway?

  Yeah, or have multiple dream schools, right?

• 58:28Speaker 02

  They can have you by the cojones and you can't choose anywhere else. So if you're open to a bunch of different places, that's in general life. If you're, you're buying something, if it's like you have to have this or have nothing else, and schools know how to determine, they have algorithms to determine whether you are willing to pay $35,000 or $30,000 or $40,000 based on how many other schools you apply to, the kinds of other schools you apply to. So the more you're actually open to saying, it doesn't matter, um, if I go to this school or that school or whatever, um, the, the more you have a leg up in it.

• 59:01Speaker 05

  And I totally agree, the, the distinguishing characteristics between a lot of university, you know, you get in your head where you want to go as a kid, there is no, there isn't that big a difference between a lot of the places we're talking about, right? Especially, so, I agree with you. So I'm not suggesting you should do it, I'm just telling you what I'm hearing in the market from a lot of people, a lot of leaders.

• 59:23Scott Galloway?

  I would.

• 59:24Speaker 05

  Educational institutions.

• 59:25Scott Galloway?

  I would point out, though, that, okay, so UCLA, Cal, and I say, you went to Princeton, right?

• 59:31Speaker 05

  Yes.

• 59:32Scott Galloway?

  And, Zakiya, you went to Vanderbilt. Bob, where'd you go to school? I graduated from Berkeley, but started at University of Oregon. Okay, so we've all went to, you know, tier one schools and I find that when people start recommending that they look into lower cost options, it's usually from people who went to tier one schools. I still think economically, the parent, until it's your kid, the parent figures out a way.

• 59:58Speaker 02

  That's not what I'm saying. I'm not saying don't have, you know, I.

• 1:00:03Scott Galloway?

  I have multiple dream schools, but I think that's smart. Don't, don't get hung up on any one. That's.

• 1:00:07Speaker 02

  That's what, that's what my advice is.

• 1:00:08Scott Galloway?

  That's recipe to get rejected. That's recipe to get your heartbroken. It's almost as if that school senses that you just want them and they reject.

• 1:00:14Speaker 02

  That's what I mean. That's what I mean.

• 1:00:16Scott Galloway?

  It's crazy. Unfortunately, though, I do think we live in a bit of a caste system where that, that brand is just so important that parents ultimately end up deciding to go to whatever is the best brand, as Anastasia said, as, as indicated by U S News and World Report, which has become this incredibly powerful arbiter. So I want.

• 1:00:34Speaker 05

  But, but brand drives so much of what human beings do. I think, you know, not recognizing that is also potentially dangerous, right? I mean, Scott, you do this all the time. You talk about luxury branding and luxury, right? And how much human beings are driven by that and by status. Why would we expect human beings to act differently? When it comes to higher education, which is a lifetime brand that you get to wear if you graduate. So I also think not understanding human psychology and behavior around this stuff. We're not that different when it comes to higher ed as it comes to, and I don't want to compare it to, you know, to a Lamborghini or whatever, but you know, it's there.

• 1:01:18Speaker 02

  It is a high, it is a high class problem, though.

• 1:01:20Speaker 05

  Yes.

• 1:01:21Speaker 02

  Um, because the majority of people in America who graduate with a four-year degree graduate from colleges that we've never heard of. They're not even your state colleges. They are the, they are the Kane universities. They are the Montclair State universities. They are the Georgia State, not the University of Georgia or the Georgia Techs. They are the Georgia Southerns and, you know, West Georgia State University. So I just want to acknowledge that. And they are great and they fuel like that middle class is made up of people who went to colleges like that.

• 1:01:47Scott Galloway?

  You know, many, many executives of big companies, that's where they went to school. So it's not even that you can't enter the elite and make a lot of money in life from a college like that. So, and I want you guys to think about this. I'm going to make a couple of predictions, and I would like each of you to make a couple of predictions about higher ed. So my first prediction is that we're going to have hundreds of universities begin this death march. I think that the cartel of higher ed, increasing prices with no underlying increase in innovation, the cost structure, the Rolex-ification of the campuses, I think, and this new, if you will, recognition that there are other paths, or at least being

• 1:02:31Scott Galloway?

  opened to other paths, is going to result in, call it the tier three universities being thrust into just utter chaos. And it feels like it's been happening for a while, but it's about to accelerate. I love that Larry Summers quote that it's surprising how long things take and then shocking how fast they can happen. I think we're about to enter the shocking phase of higher ed. And then my second prediction is that we're going to have numerous universities, after an outbreak, decide to send their kids home. I think that, and I'm not asking any of you, I'm not an epidemiologist, but that's not going to stop me from talking about things that involve epidemiology. I think that the risks that universities are taking with a cohort that has proven to be super spreaders, in

• 1:03:14Scott Galloway?

  a high density, in a product, in a social atmosphere that is high density with a cohort that for tens of thousands of years has been taught, this is the time in their life they're supposed to be doing anything but distancing, that we are just begging disaster around some of these smaller college towns. So in sum, destruction and disease are my two predictions. Anastasia, you're up.

• 1:03:34Speaker 05

  Happy, happy, happy, Scott. Man, I think there will be disruption, but you know, maybe it's the historian in me. When Gutenberg came out with the printing press, universities were in a full panic mode that their business model, and they didn't call it a business model, was going to be destroyed because content could now be read by a much larger percentage of the population. And content... Could be distributed, right? It didn't happen. So I don't saying we're in the same position. I think COVID is going to push schools that were already in severe trouble over the edge.

• 1:04:13Speaker 07

  Yep.

• 1:04:13Speaker 05

  That is clear. How many? Not quite sure. What will happen is the strongest schools are going to separate themselves even more.

• 1:04:22Speaker 07

  Yeah.

• 1:04:22Speaker 05

  Um, and I think state universities are going to be in a real crunch because of given tax revenues. It's going to come down again, their, their contributions from states. And I think they actually could be the most interesting places in terms of innovation. And if more places go do, let's say like the Penn State Online, University of Maryland Global Campus. I think those are the places where you're going to see a push. But I think more places are going to survive than, than most people think. And the super spreaders, I don't know what to say about. I mean, I think that's really.

• 1:04:56Speaker 02

  I'm very concerned about the health impacts of, um, virus, especially with what we know about, um, who's most spreading. Um, which is right now younger stu-, younger people in general who are congregating together. I'm very worried about what Anastasia just said about students who, whose classes are online. Who schools have said that it's not safe to be in person together. And they are still coming and trying to figure out how, and I get the human connection portion of that, which makes combating the virus so hard. Um, but it really does worry me about how we can, uh, fend this off in the long term. So this is like a statement about health and less about higher education, but it concerns me greatly. And I think the colleges that aren't thinking about every aspect of how to use all of their resources to encourage students not to do things that spread.

• 1:05:39Speaker 02

  So you need to be having an orientation that gives people education and knowledge about like how the virus is spread and what you should be doing to prevent yourself. You need to be giving them orientation kits that have masks and encouraging masking. Um, from my other like non-high red hats now, um, that stuff does, does worry me a great deal if we're not doing the appropriate things to protect. So I will just end on, on that note that, um, I think we do have some doom and gloom in our future. And folks that are not kind of savvy to that or not accepting reality about what may happen when people begin to gather will have to close. Um, once they have a lot of, uh, spread on their campuses.

• 1:06:16Scott Galloway?

  Bob?

• 1:06:18Speaker 03

  I think you're absolutely right on that. And then on the financially struggling schools, I think the number of schools that we will see close in the next year or so will probably be in the triple digits. I think we can't say, I don't think there's any formula to tell us exactly which ones it will be. There are so many variables. And I think, but though from a student perspective, I'm thinking back to the Mount Holyoke question earlier, that if you're attending a respectable college, you shouldn't worry too much about the potential foreclosure because it's a respectable school. Even if it does close or merge, the units will transfer, you'll be okay.

• 1:07:04Scott Galloway?

  Okay, Bob Sherman, Zakiya Smith, Alice, Anastasia Crossway. Thank you so much for your participation today. Thanks to everyone for dialing in or for zooming in. This is obviously a very nervous and tense and stressful time. We hope you are well. The one thing, another thing I would offer is that I think the debate we're having here is different and should not be conflated with the K through 12 debate. I think this debate around college is a meaningful disappointment for a lot of kids. But I think the K through 12 debate is a profound, has a profound impact on households. And that's an entirely different calculus.

• 1:07:45Scott Galloway?

  And I wouldn't want anyone here to construe our comments as having some sort of blanket viewpoint on K through 12. That's a different talk show. So with that, with the fine print, if you want more information or you want to go, if you want to download the sheet, please go to profgalloway.com. If we can be helpful, please send an email. I'm pretty easy to track down or send one to the prof prof Galloway site. But we appreciate your time. We hope you and your kids are safe. We look forward to getting back to a state of normalcy where we can all spill into adulthood and safe and joyous places and get our hearts broken and have those hearts heal stronger and find wonder in things we had no, no idea we have any interest in.

• 1:08:30Scott Galloway?

  And go to great football games and see fall unfold before our eyes. That was not very poetic, but regardless, we appreciate your time. Stay safe. Thanks very much, everybody. Take care.