The Crystal Ball: Predicting the Rise and Fall of Unis Over the Next 30 Years

College Search & Selection
21

With the warning (for the entire thread) that crystal balls are inherently imperfect:

I am surprised that I haven’t seen the initials “MIT” somewhere in this thread. I know that its endowment is “only” $13 billion, but I suspect that will be enough to get by. The world economy is going towards STEM, and MIT is great in this area, and can bring in full pay students at will from around the world. I think that it is another winner.

I think that a lot of small liberal arts colleges are in trouble.

A few year back I toured Boston University with a daughter. I was quite surprised when they said that they had recently reduced their enrollment (number of students admitted). At the time this seemed odd to me. A month or two later I saw a university ranking (admittedly only one ranking out of many) that had it only a few places ahead of UMass Amherst. Suddenly I got it: If its ranking were to drop down to the same as UMass, or if it stayed within 10 places or so for multiple rankings, then why would any parent ever agree to send a child to BU for $65,000 per year when they can go to UMass for 1/3 the price (if in-state). They had to reduce their enrollment to stay more elite than UMass. Long term, I think that there is a good chance that they might be in trouble. On the other hand, the real estate that they own is so valuable that I could see them very slowly shrinking and selling a building every few years for a very long time, or renting buildings out to businesses, and still staying in business.

22

Strongly disagree. I work at a large tech company that’s working on this now, and it’s already happening. Financiers are already using algorithms to make complex decisions for them based on a variety of inputs. We’re using data science and algorithms to make all kinds of decisions that quite frankly we probably shouldn’t be using data to make, at least not at this level. It’s one of the reasons I say the same thing Cuban is saying. I’m a psychologist, and I sit in meetings with data scientists and developers all day who start throwing around metrics and what data they want to collect and spit out, and I’ll ask a simple question like “What research question are we trying to answer here? What are our constructs?” and get silence.

We need people who understand how to ask the right questions, who can temper the data with a human interpretation and understand what the variables mean in real life, who can ensure that the myriad of algorithms we use to make every day decisions aren’t unfairly disadvantaging people for no reason. I’m starting to see this now, in which the teams I work with have armies of data scientists and statisticians but they still ask for me to work with them because those folks don’t understand behavioral science and research design.

The book Weapons of Math Destruction is a really, really good insight into this.

Stanford already has strengths in the humanities. A lot of people think of it as a STEM university for whatever reason, but Stanford has strong departments and doctoral programs in a variety of humanities and social sciences fields - top 5 in English literature, top 10-15ish in philosophy, top 10-15ish in French literature and language, top 10-20ish in religion, top 15 in psychology, top 5 in political science, top 20ish in sociology…you get the idea. It also has a powerhouse top 10 economics department with a 5% doctoral acceptance rates (for context, even truly excellent top 15 doctoral programs typically have double-digit acceptance rates).

All of the schools on this list are already tippy-top research universities with negligible differences between them on both a general scale and an undergraduate scale. I agree, of course, that they will continue to generate wealth (even just earning interest on their endowments) and continue to rake in alumni donations and raise money to build ever more high-tech campuses.

I’m not sure I’d even label Cornell, USC, or Princeton as wildcards or Dartmouth or Brown as losers. They are, again, elite universities/colleges that dole out excellent financial aid. Losers if you are splitting hairs and comparing them only to places like Stanford and Harvard, perhaps, but in the grand scheme of things? Nope. There’s also no evidence that this hyperfocus on STEM will continue for the next 25 years. The pendulum seems to swing every so often; when I entered college ust about 13 years ago the focus was much more on humanities and social sciences than it is today.

In the next 25 years, the losers I predict will fall into two categories:

  1. Small tuition-driven liberal arts colleges with small endowments and mostly regional pull. Not places like Swarthmore or Amherst - I’m thinking places like Birmingham-Southern College, Southwestern University, Wesleyan College in GA, etc. As college costs spiral out of control and certain administrations cut support for things like loan forgiveness and income-based repayment programs, students are not going to be able to afford full sticker price and those colleges are not going to be able to afford large financial aid programs. This is especially a danger for the colleges that already accept 70% or more of their applicants because they don’t have much farther down in the pool to go, and they don’t have a lot of endowment money to rely on.

  2. Public universities - some state flagships in states that are making deep cuts to education, but primarily smaller regional campuses that support the B students with modest family incomes. I’m thinking not so much places like Michigan, UVa, UNC (which can and does attract OOS students who pay full price) or even places like UGA, Arizona, or Maryland (which have huge buy-in from their state’s top students). I’m thinking places like…Georgia State, which was on the rise and on its way to trying to become a national research university and then got forcibly merged with Georgia Perimeter College, the largest community college system in GA. Also, Georgia hates public education right now, so they’re doing weird things with the budget and the USG.

I think the UCs will potentially fall into this boat just because CA seems to be in crisis!

23

This is true, but it doesn’t remotely support Cuban’s point. Finance companies have armies of mathematicians to design the algorithms, programmers to code the algorithms, and engineers and IT staff to design and operate the high performance computers that run the algorithms. If quantitative trading has eliminated any jobs, it’s the old school traders with liberal arts degrees picking individual stocks.

24

How not? Here’s the relevant quote:

I think the point is, once AI and machine learning is more robust, you won’t need armies of mathematicians and data scientists and programmers to code the algorithms. You may need a smaller team of those technical positions to code the original algorithm and then tend to it thereafter. The hardware maintenance side can be outsourced; a lot of companies are already doing that - they hire an outside company to maintain their servers and do their IT work and they may have only a few or even no IT people on staff. That’s not to say that those jobs will completely disappear (of course they won’t).

I think his point is simply that there will be greater demand for professional positions for social science and humanities majors who can effect change and interpretation of this data and help filter that into decision-making. I can already see that happening from my perspective, is what I’M saying - I work in human-computer interaction and the field is growing as more companies are realizing that having a social scientist to help them make sense of data involving humans is a handy person to have on the team. And as every software developer who has graduated in the last 5 years is trying to make a startup app of this or that, and the field is flooded with competitors, what will set the really good ones apart are elegant user experiences that solve actual problems with minimal friction for people. There have been so many times I’ve seen a dev build something and I’m like “Yeah, but who is going to use that?” and they’re like “I dunno, it’s just cool!”

25

@juillet said: “Financiers are already using algorithms to make complex decisions for them based on a variety of inputs. We’re using data science and algorithms to make all kinds of decisions that quite frankly we probably shouldn’t be using data to make, at least not at this level.”

One big question is (or should be): Who actually understands what these algorithms are doing, and whether it makes sense? I see a lot of young people with fancy degrees who are very confident. Some of that confidence might come from having not lived long enough to have learned how much there is that they don’t know. I also see a lot of history such as in the markets (and politics) which is difficult to fully digest. Has the history of past bubbles and ensuing crashes really been fully digested by our “financial wizards” who understand these algorithms?

" the losers I predict will fall into two categories:…
…1) Small tuition-driven liberal arts colleges with small endowments…"

Yes

“…2) Public universities”

I think that the need for public universities is very large. It appears clear that this need will grow. However, the means to fund them is an entirely different issue.

26

@juillet

Take AQR as an example of quantitative finance. When AI gets truly robust, AQR will need fewer STEM employees. However, it won’t be replacing those eliminated jobs with liberal arts majors. It’ll shrink the size of the payroll. AQR doesn’t need or want free thinking classics majors. It wants Phds who understand the latest mathematical finance research and how to conduct new research. In some hypothetical end state, where AI can replace all those Phds, the company is likely to consist of a server room that runs itself and a small number of partners who spend their time marketing to institutional investors over dinners at Michelin starred restaurants. It’s a fallacy to assume those eliminated STEM jobs will be replaced with more liberal arts jobs, instead of permanently higher unemployment.

27

With regard to public universities, I predict if a democrat is elected president in the near future, public colleges will become tuition free (like K-12). This is something the Bernie Sanders/populist side of the party REALLY wants.

28

It would also require sufficient numbers of representatives and senators who want to do that (or something effectively similar to that, like bigger Pell grants to all students at public colleges and universities).

29

@cue7 “I predict that the large, comprehensive research university is “IN,” and the smaller, more liberal-arts focused institutions will struggle over the next 20-30 years.”

What is in.
-Large schools, because scale is efficient, builds brand recognition, and can offer more options and resources
-Academically rigorous schools (Ivies and peers)
-Private schools (publics get their budgets cut every year)
-Comprehensive research universities (Ideally w/ a medical school, law school, business school, engineering school)
-Recognizable brands (via sports or academics). You are becoming a member of a club.
-Large endowments (better financial aid and resources)
-High graduation rates (who wouldn’t want this?)
-Strong job placement and/or grad school placement (for $250k, an education alone is not enough).
-In or near a major city (preferred by most students today)
-Grade inflation. Students want it and it cuts down the stress levels.

@Cue7 “Cornell - will the Ithaca location hurt it? I don’t know enough about the school. It has such an extensive research plant, which is good, but not sure about fundraising prowess and location.”

The location not near a major city. However over the last 10 years, they have had more application growth than any other Ivy (over 47K applications). Have strong engineering and business, a beautiful campus, a large physical plant and the largest undergraduate school of the Ivies. They are also increasing their presence in NYC.

Honestly, I think all of the big name schools you list are going to be winners. The losers are for-profit schools, small poorly funded public regional or local schools with low graduation rates.

Most top students used to attend the college closest to their home. Increasingly they now investigate and attend national universities that offer them more options and students who are their peers. The quality of students at top schools continues to rise, and many of the better students they are attracting would have gone to local and regional schools before. The difference between top national universities and local schools continues to rise as students sort themselves more extensively.

30

“There’s also no evidence that this hyperfocus on STEM will continue for the next 25 years. The pendulum seems to swing every so often; when I entered college ust about 13 years ago the focus was much more on humanities and social sciences than it is today.”

I agree with this evaluation. I think the most recent reality check on STEM fever was called dotcom bubble. It took the following 10 years to see the resurge of CS graduates. If my memory serves me correct, U. of Florida almost terminated its CS department a few years back.

Do we have a tech bubble now? I do not have an answer because I do not have a crystal ball. But I will surely pay attention to the state of mobile app industry. During the current wave of STEM fever, mobile app industry has seen most capital and skilled labor infusion. Can the industry continue to sustain and justify this level of economic input by providing enough return and economic output? I do not know the answer. All I know is that my family members over the last year have barely downloaded and kept a new app over a week.

31

@prof2dad I agree that apps are on the downswing. However, the problem solving skills of engineers and coders are valued for all types of jobs.

The popularity of CS majors and paying them double what all other majors get will undoubtedly cool in a few years. However, many are realizing that a TEM major is a free option. TEM majors can often do other people’s jobs, but other people can usually not do their jobs. For that reason, people will continue to value these majors highly.

32

@ucbalumnus I also think the recent availability of 4 year option at some Penn State branches is also putting pressure on PASSHE schools that are close.

Does anyone have new data on “acceptance” yield for 2017 and whether the predictions for lower enrollment have been met? It will be interesting to see whether any of these trends (online degrees, pressure on small privates, less international students, etc) are accelerating. Like, how fast is this bubble bursting, or is it simply leaking?

33

It’s not a fallacy; it’s an opinion. We both have one, and we disagree, and that’s totally okay. My point was never that all of the STEM jobs will be replaced by liberal arts jobs. But think about the scenario you just posed - partners spending time marketing to institutional investors. Who do you think will fill those jobs? Right now employers are already lamenting that their STEM graduates don’t have the communication skills necessary to function in the workplace. And that’s leaving out the point that at some point people are going to realize that fine-tuning algorithms that account for human behavior is going to require the expertise of people who understand human behavior.

Yes, exactly!

Oh, I totally agree. In my ideal world, funding for public universities would be increasing. But based on where our current administration and trends are going, I’m not sure that’s the case.

34

“With regard to public universities, I predict if a democrat is elected president in the near future, public colleges will become tuition free (like K-12). This is something the Bernie Sanders/populist side of the party REALLY wants.”

But what happens four years later when the progressive/populist democratic president (such as Bernie Sanders or Elizabeth Warren) gets voted back out again?

The issue of government promising to spend beyond its means (or our collective means) is with us for a very long period of time. There is going to be a lot of thrashing as political forces deal with the impossibility of providing everything that people expect, and the desire to do more. It is not clear, at least to me, what this thrashing is going to do to the funding for public universities. However, the current issues with funding for public universities in California might be a tiny hint of what is to come nationwide.

35

Actually, some other states like Pennsylvania are much further along the way to lower quality and higher (net) cost public universities.

36

And the endless budgetary problems in California mostly come from the fact that rich people in California are shielded from paying property tax by Prop 13, a property taxes are how states traditionally fund their schools systems. California relies on income tax, which is much more volatile.

California has a reputation as a high tax state, but in fact, it is middle of the pack as far as revenue/spending per resident.

37

Yes, but how many people get those jobs at a hedge fund, maybe a dozen? What happens to the other 99% of their employees, who just got laid off?

Maybe, but there doesn’t seem to be much evidence for this being done in quantitative investing. You’ll see people like Cliff Asness discover or rediscover a mathematical strategy, which makes money on Wall Street. Later, the behavioral economists in academia try to justify why a strategy persistently makes money.

38

I wanted to shamelessly Bump this thread before it got too late. I think this discussion is important and not as frivolous as it seems. I think the institutional health of some schools are concerning (especially Lac’s) as tuition discounting continues and the public loosing faith in the higher education system. I feel as though a lot of private schools are in trouble as the desire to pay $300,000 for an education that is not particularly deemed elite/prestigious is waning quickly.
How will schools like Wake, BU, Northeastern, or even Tufts fare as their endowments are small.

I do agree with @Zinhead that schools in/near large cities will benefit the most in the coming years.

39

For those who believe that free public university tuition is the right thing, keep in mind that their budget will be set by each state. Universities will not tell the state the amount they want and the state will rubber stamp it.