If you compare the present values of all future earnings due to a delay in graduation, you’ll come to a different conclusion. Sure, if your kid is about to enter the workplace, it may make sense to delay, but wouldn’t graduate school be a better option in that case?
McKinsey presented three scenarios:
Those entering the work force during an economic downturn tend to do worse in career and pay progression for a decade or more after (some may never become employed in their fields, since employers a year later may prefer a fresh new graduate over an unemployed last year graduate). Going to a funded graduate program may similarly kick the work force entry date down the road, but not everyone can get into a funded graduate program. So it is at least possible that a delay in graduation, despite losing a half year or year of possible earnings (which may not happen if one does not get a job at graduation in a downturn), to enter the work force in a better labor market may result in better future earnings.
But then there are no guarantees as to how long the downturn will last and when and how strong the job recovery will be after (and for the targeted types of jobs). So guessing what is the best course of action now with respect to timing graduation date is like market timing investments – you may guess correctly or incorrectly.
The cost of a delay in graduation is more than a half year or one year worth of earnings, as earnings beyond that half year or one year are also affected because of the impact on seniority and work experiences.
A graduate education isn’t the same as a delay in undergraduate graduation. Presumably, a graduate degree will enhance the earning power of the student.
Harvey Mudd already discounted its summer classes from $6000 down to $1600. I know fall would be a bigger hit than summer since there are way more students.
@roycroftmom obviously Bowdoin couldn’t let so many kids take a leave of absence but they may need to think creatively if they are getting a majority of their parents saying the kids would take a break. I believe they are getting a lot of feedback on this from students and parents. What they are not going to do is tell those kids they can’t come back. I don’t know what the answer is. All schools risk losing revenue at some level. It will be a matter of how they can maximize income and change their budgets around to do what is right for their students. There might be a price out there that parents would agree to for an online semester.
I don’t see a downside to taking a semester off for the student but I don’t know how re-entry would go if too many kids do that. A small college won’t have a way to house more kids who take that “extra” fall semester three years from now. It would almost be better if colleges just stopped for the whole year and we could all just pick up where we left off in the fall of 2021! S19 could take interesting Coursera courses, pick up the guitar again, train for a marathon. …I don’t care what he does as long as he stays busy. I know that’s a pipe dream and won’t happen though.
Because there is no binding national stay at home order, some areas are going to have many active infections while other places have clamped down and gotten it under control. I can’t imagine public health officals in the clamped-down areas being happy about students from around the country bringing the virus in large numbers back to their campuses. I am assuming fall college will mostly be online if it happens at all.
Not if the new graduate cannot find a job at graduation. A year later, the unemployed last year graduate is likely to be seen as “damaged” or “undesired” goods compared to this year’s new graduates.
However, not everyone can get into a funded graduate program, and unfunded ones can be quite expensive.
@INJParent Your economic analysis makes some sense for someone who is 1) lucky enough to find a job right away and 2) puts a very high value on income. My kid is going to be a music major, she obviously decided already she isn’t going to make bank with her degree. ?
My solution is a hybrid fall semester. Let kids do online but if given the OK have kids attend live also. Different tuition for both. So at least money is coming in.
At Lacs I can see this online teaching as a positive
Many foreigners would jump at the chance to maybe do a year online then join the school the next year. This could be positive cash flow for the small lacs that are already hurting. Think everyone needs to think creatively and just assume Fall 2021 will be historic and something you tell your grandchildren about,
Yes, families need to decide on their own what make sense to them, taking into account both economic and non-economic considerations. In my own case, my S is likely to have high earning power when he graduates and decides to go into industry. But he’s as likely to choose to go into academia (or something else entirely that is not even contemplated by us) instead with much lower earning potential. Regardless, I personally still feel a year out of school isn’t worth the potential “cost”, measured not just in dollars, even if the gap year/term can be put to productive use.
I suggest study of the McKinsey report analyzing the financial position of colleges of an on-line semester. A remarkable number simply can’t afford it. Nor can they afford to simply close down for a year. Most schools are critically dependant on tuition to fund fixed operating costs, and will need to bring it in from wherever they can find it, with whatever students they can get.
Again, that is based on the assumption that the student will graduate into a career-track job even during an economic downturn. In an economic downturn, many graduate into the unemployment line instead, eliminating any advantage (and possibly getting disadvantage) by graduating earlier than the next semester’s or year’s graduates.
murray93—
My son is freshman majoring music performance at private conservatory. Online classes don’t work well in music major. All ensembles have been cancelled. So at least, he is doing about 1/2 of music curriculums for the same tuition right now (he receives a talent scholarship X 4 years from his school). He likes his school very much so still feels positive studying with his classmates and professors online and looks forwards to the fall semester. So, we haven’t discussed with him about “If fall semester is online”…
As I know, most smallish private conservatories don’t approve “gap year” (sometimes approve with health / injury issues). If conservatories are allowing a gap year option only to incoming freshman due to pandemic, it is very unfair for current students especially whose family with financial issues. Who knows if schools can offer generous financial aids for all financially impacted students to continue. So, conservatories would need to accept a year off (usually not a semester off because those music curriculums are designed for one year) if any students request. If music conservatory is in university and if university allows students a gap year, they have to accept music major students to take a semester / two off as well. Then, next year’s music major auditions / acceptances will drastically change. It isn’t only this year, it will drag into at least several more years especially classical music performance students tend to go to MM. I can imagine it would be even more competitive to get into MM in 5 years from now if many music students choose to take a gap year this time due to online classes / campus closure. Very complicated.
Because my son is still freshman, I am very sure that he will catch up all missing ensemble and in-person trainings. He is just re-energizing at home and going back to school as soon as his school allows students to come back even with less classmates (if his school allows some students to take a gap year). It can be August, September, October, November or January…In general, less students at school works well for music performance major students to get more attentions and trainings / opportunities.
Thank you @BelmontVA for the Mckinsey link. That was fascinating to me and I think scenario #2 is most likely.
@JeJeJe thank you for your insight. You made me think about a lot of things I hadn’t considered. D is going to a conservatory-style music school within a LAC. There is a lot to think about. We live in a pretty rural area, so private lessons are hard to come by and I really want her to stay motivated. Maybe she could help with the high school program since she’s not sure if she is going music ed or performance. So much to consider! I might message you later with more questions if we really are online this fall. If that’s ok. ?
What makes one think an economic downturn would last only briefly and a better employment picture would return quickly? Besides, if the student isn’t about to graduate next year, how can anyone predict the economic outlook two years or longer from now? Is the student going to keep extending his/her time in school? There’s never any certainty in life. A student always faces uncertainty in the career s/he chooses, and the timing of her/his graduation.
My D17 is suppose to graduate next December. She has stated if classes are online in the fall she wants to take the semester off. She will be living off campus anyway. Will she be allowed a “leave of absence” for a semester if online. What will the schools do. Take a hard line. If she goes PT she loses her merit scholarship which makes it more expensive. Maybe pay out of pocket for just one class? She has loved her college experience and is already missing out for the rest of the semester and does not want her college career to have her final two semesters be online. I support her with this. I dont see how many universities can survive this way. I also dont believe that if they are off campus for the fall, that they will be on campus for spring 21. The vaccine that everyone states is needed for us to return to “normal” still wont be ready by January. So why let everyone return then? I want so badly to return to some normal, but do understand that until there is either a vaccine, or a treatment to prevent deaths, this will not happen. I cry EVERY SINGLE DAY.
Then there is my S19. He will do ok with online classes, but he is so antisocial to begin with and has no friends at home. He was making friends at school. i worry long term about his mental health if they dont return.
BTW from a personal level I would allow my kids to take the risk and return to campus since they are relatively healthy.
Ok, will Return to crying.
“The cost of a delay in graduation is more than a half year or one year worth of earnings, as earnings beyond that half year or one year are also affected because of the impact on seniority and work experiences.”
I think that these are difficult times for our recent graduates and our soon-to-be graduates to navigate.
Please @sdl0625 our kids will find their way through this. My generation found our way through the Vietnam war and the Kent State shootings (and FLQ bombings for people like me who are from Montreal). My parents made their way through WW2, and their parents through WW1. Our kids will find their way through the coronavirus pandemic.
I am focused on getting through this week and next without getting exposed. I have enough gloves and N95 masks to get through two more “once per week” visits to the grocery store. Two weeks from now I will worry about what I will do that week and the next. However, we will get through this one or two weeks at a time.
I am in the camp that campus will not be open until 2021 so online fall schooling. Now I would think a larger state flagship would have better infrastructure to do online learning and the scale to do it pretty well but they also have a ton of kids to teach and perhaps a ton of kids more at risk of being left in the cracks vs a smaller school that may have a harder time scaling up but has to deal w less kids to teach. This is way schools have endowments so hopefully they can tap them, after all they save for a rainy day and this seems to be one of those days ( weeks, months…)I do think we will see 10% or more schools not make it as on going business into 2022.
I feel that there’s a high possibility that Fall Term will be online. Life might return to some kind of “normal” by then but I think the fear of a second wave of CV will cause a need for further social distancing and banning of large congregations of people. It’s just too much of a risk for colleges to take on. That being said, I think that will wreck havoc on enrollment as many students will probably defer, especially freshmen.
- No freshmen wants to start their college career online.
- Nobody wants to pay the same tuition for online classes bc they are of lower quality. Even if the quality is the same, it’s not worth it because college isn’t just about the academics, although that’s very important, it’s also about campus life…etc.
Lots of small privates will be hit very hard. Even large public non-flagships will be in trouble as a result of budget cuts.