PASSHE Institutions Merging

[iupgroundhog]

How do you pay off the debt of closing a campus? Some of these schools owe $70+ million. The Chancellor has said numerous times that closure isn't an option.

I'm not too well-versed on the debt. Who holds the schools' debt? And is it debt for the schools themselves or to PASSHE or the state of Pennsylvania?

[complaint_hopeful]

You are so correct. I repeat again that what is needed is the process that has been used to close and realign overcapacity in military bases. The military uses an independent commission to figure out what to do and then needs Congressional action to NOT implement it. Each time it has been used, the plans from the commission have been implemented. To me, doing this is simple and easily adapted to eliminate overcapacity in the state system of higher education and ignore (but hear) the lobbying efforts you describe.

How do you pay off the debt of closing a campus? Some of these schools owe $70+ million. The Chancellor has said numerous times that closure isn't an option.

[boatcapt]

You are so correct. I repeat again that what is needed is the process that has been used to close and realign overcapacity in military bases. The military uses an independent commission to figure out what to do and then needs Congressional action to NOT implement it. Each time it has been used, the plans from the commission have been implemented. To me, doing this is simple and easily adapted to eliminate overcapacity in the state system of higher education and ignore (but hear) the lobbying efforts you describe.

You are right. Base closures were not fun but very necessary. The local communities around the bases that were selected to close pitched a royal b*tch with predictions that the communites would simply dry up and blow away. But that really didn't happen. They figured out a way to survive without the base and many are actually doing better than when the base was there.

[BADinPA]

The only real way of "fixing" that over supply problem is to cut capacity but which capacity and were? Seems like every school, faculty, alumni and local community have become very adept at lobying for why THEY should not face the axe. Meanwhile the PASSHE is circling the drain at a lower and lower level. Eventually the system as a whole will become unsustainable and it will crash. May not be this year or next, but make no mistake, that is the trajectory they are on.

You are so correct. I repeat again that what is needed is the process that has been used to close and realign overcapacity in military bases. The military uses an independent commission to figure out what to do and then needs Congressional action to NOT implement it. Each time it has been used, the plans from the commission have been implemented. To me, doing this is simple and easily adapted to eliminate overcapacity in the state system of higher education and ignore (but hear) the lobbying efforts you describe.

[Horror Child]

Most students are still 18-25 and that group of students reject the idea of online only. They'll drive 40 minutes each way to attend in person but they won't sit at home. If you have any K-12 kids ask them if they prefer online to in person. I bet its 10-to-1 preferring in person. Most of this is because people are taught to teach using in person methods. There aren't necessarily best practices for online learning. The online demographic is working adults. For-profits using online took advantage of lower income working adults and especially military. Once the government caught on they're in decline. But yes, some brick and mortar schools invested heavily in online (or purchased online enterprises like Purdue buying Kaplan). By and large most of the fully online enrollment is working adults and most of it is second bachelors and graduate study.

PA's problem is that there's not a huge market for working adults looking for additional education. If PASSHE can figure that out they should be able to make up some decent ground from declining high school applicants.

If your assessment is accurate, the integrations are doomed to fail. A key tenet of the western triad is online while the northeastern one is focused on workforce development and non-degree programs.

[Fightingscot82]

You are correct about there being no magic bullet solution. Bottom line is that there is excess capacity to the current and future population of the state. The only real way of "fixing" that over supply problem is to cut capacity but which capacity and were? Seems like every school, faculty, alumni and local community have become very adept at lobying for why THEY should not face the axe. Meanwhile the PASSHE is circling the drain at a lower and lower level. Eventually the system as a whole will become unsustainable and it will crash. May not be this year or next, but make no mistake, that is the trajectory they are on.

On-line education by colleges has fundimentally changed over the last few years and Covid certainly accelerated this. Gone are the days when there were only a couple of options. Seems like every school in every state has an on-line "campus" and unlike in the past, most charge a standard tuition no matter if you are in state or out. In this crowded market, I doubt if a PASSHE on-line college is the answer to increasing enrolement.

Correct. Just yesterday the Missouri system launched their online arm. But PASSHE can undercut most others on price. Base tuition for undergraduate is still under $10,000 for two semesters. I believe full time grad studies comes in around $7,500 a semester. Nobody in PA can touch that and neither can the big online schools. There's a reason Penn States online programs aren't more popular - Penn State tuition isn't the same value without the research or social experiences.

For adult learners a big selling point is corporate partnerships offering discounts. Unsure why, but my company offers discounts with for-profit Strayer and the University of Florida. Even with the 20% discount it's still cheaper to attend PASSHE.

[boatcapt]

I would avoid the mindset that there is a solution for the woes of the PASSHE. Something that will make it all better.

It's a system in decline due to uncontrollable factors, mainly demographics but also some other economic factors.

The best that can be done is to manage the decline. That's what they are trying to do now.

Have a nice day!

You are correct about there being no magic bullet solution. Bottom line is that there is excess capacity to the current and future population of the state. The only real way of "fixing" that over supply problem is to cut capacity but which capacity and were? Seems like every school, faculty, alumni and local community have become very adept at lobying for why THEY should not face the axe. Meanwhile the PASSHE is circling the drain at a lower and lower level. Eventually the system as a whole will become unsustainable and it will crash. May not be this year or next, but make no mistake, that is the trajectory they are on.

On-line education by colleges has fundimentally changed over the last few years and Covid certainly accelerated this. Gone are the days when there were only a couple of options. Seems like every school in every state has an on-line "campus" and unlike in the past, most charge a standard tuition no matter if you are in state or out. In this crowded market, I doubt if a PASSHE on-line college is the answer to increasing enrolement.

[Fightingscot82]

Well online was something that could mitigate the demographic decline in PA, but most schools just kinda did it. They didn't do it great. Doing it great requires making some fundamental changes.

And there was a market for it. SNHU wasn't a household name. A lot of the big providers weren't. That could have been us!

Now, it might just be too late.

Most students are still 18-25 and that group of students reject the idea of online only. They'll drive 40 minutes each way to attend in person but they won't sit at home. If you have any K-12 kids ask them if they prefer online to in person. I bet its 10-to-1 preferring in person. Most of this is because people are taught to teach using in person methods. There aren't necessarily best practices for online learning. The online demographic is working adults. For-profits using online took advantage of lower income working adults and especially military. Once the government caught on they're in decline. But yes, some brick and mortar schools invested heavily in online (or purchased online enterprises like Purdue buying Kaplan). By and large most of the fully online enrollment is working adults and most of it is second bachelors and graduate study.

PA's problem is that there's not a huge market for working adults looking for additional education. If PASSHE can figure that out they should be able to make up some decent ground from declining high school applicants.

[complaint_hopeful]

I don't want to turn on baby boomers, but...

A lot of boomers raised kids in environments that made aging college facilities in the early 2000s seem unattractive. Kids were raised without sharing bedrooms, being able to eat at their convenience, with high speed internet, etc. So the response was not to refresh facilities and come up with better ways of selling it as part of the experience, it was to build, build, build. Boomers went to college with a lot of new facilities. New modern facilities were sold to them as part of their experience so they did in turn. The problem was that when everyone's building you just move the bar. Soon nearly everyone had a new student center with a la carte dining, high speed internet (later wifi), apartment and suite style campus housing, and new academic buildings. So in summary, boomer leadership thought they could revamp their campus with new/renovated buildings but it didn't matter.

The second is that boomers are retiring later so they're sticking around longer. They're now the grandparents of today's college students and 2 or 3 generations removed from the reality of today. They remembered taking out loans and being able to work their way through college. There's not a single state where that's possible anymore on minimum wage. Forbes had a good article on this a couple years ago. So now kids are saddled with debt, lagging wages, and a pretty large percentage of their total compensation (from the employer perspective) going to benefits. So this means young people saddled with debt and stagnant pay are less likely than ever to donate back to their college, buy a house, or have kids all while making less than they would have generations ago. Its a crisis all around. No good.

Sorry to trash baby boomers. But hey, they didn't start the fire, amiright?

Yeah...some modern students almost expect like resort level amenitites.

Now a school like Carnegie Mellon...doesn't need that because it has a prestigious name and students will come there no matter what. And they'll get a high paying job when they graduate.

The PASSHE brand, doesn't really have that reputation. They're in the market segment that basically tries to cater to everyone. Where CMU is in the prestigious market segment that caters to the top level Academic student.

[complaint_hopeful]

I would avoid the mindset that there is a solution for the woes of the PASSHE. Something that will make it all better.

It's a system in decline due to uncontrollable factors, mainly demographics but also some other economic factors.

The best that can be done is to manage the decline. That's what they are trying to do now.

Have a nice day!

Well online was something that could mitigate the demographic decline in PA, but most schools just kinda did it. They didn't do it great. Doing it great requires making some fundamental changes.

And there was a market for it. SNHU wasn't a household name. A lot of the big providers weren't. That could have been us!

Now, it might just be too late.

[iupgroundhog]

I would avoid the mindset that there is a solution for the woes of the PASSHE. Something that will make it all better.

It's a system in decline due to uncontrollable factors, mainly demographics but also some other economic factors.

The best that can be done is to manage the decline. That's what they are trying to do now.

Have a nice day!

[boatcapt]

Correct. The population in PA has been on the decline for decades. Population of high school graduates peaked around 2008 and PASSHE enrollment peaked around 2010. Surprisingly, college admissions is always aware of demographic studies but has always been able to ignore them. I think nearly every college thought they could persist through the decline of high school population. The biggest names will always be able to but the bottom 2/3 will see a wide range of impact.

The big cliff is coming though. The decline of young people was already getting steeper but 15-20 years from now it will be catastrophic. We're not having enough babies to replace our dying population even after immigration. And that was before Covid. Now with Covid, the gap between births and deaths is growing. People aren't reproducing even with marriage rates slightly increasing. They're not even adopting at the same rate as a few years ago. Since March 2020 there's been a huge dropoff in the number of people who think they're pregnant or who are actually pregnant. An alarming drop off.

So for higher ed, like I said, catastrophic. For government, probably the same. Fewer people means less tax revenue. I bet some states will be headed for a budget crisis in 15 years.

Many states and the federal government are already in a budget crisis. And for most, they were in crisis long before Covid!

[Fightingscot82]

I don't want to turn on baby boomers, but...

A lot of boomers raised kids in environments that made aging college facilities in the early 2000s seem unattractive. Kids were raised without sharing bedrooms, being able to eat at their convenience, with high speed internet, etc. So the response was not to refresh facilities and come up with better ways of selling it as part of the experience, it was to build, build, build. Boomers went to college with a lot of new facilities. New modern facilities were sold to them as part of their experience so they did in turn. The problem was that when everyone's building you just move the bar. Soon nearly everyone had a new student center with a la carte dining, high speed internet (later wifi), apartment and suite style campus housing, and new academic buildings. So in summary, boomer leadership thought they could revamp their campus with new/renovated buildings but it didn't matter.

The second is that boomers are retiring later so they're sticking around longer. They're now the grandparents of today's college students and 2 or 3 generations removed from the reality of today. They remembered taking out loans and being able to work their way through college. There's not a single state where that's possible anymore on minimum wage. Forbes had a good article on this a couple years ago. So now kids are saddled with debt, lagging wages, and a pretty large percentage of their total compensation (from the employer perspective) going to benefits. So this means young people saddled with debt and stagnant pay are less likely than ever to donate back to their college, buy a house, or have kids all while making less than they would have generations ago. Its a crisis all around. No good.

Sorry to trash baby boomers. But hey, they didn't start the fire, amiright?

[complaint_hopeful]

So my numbers above show that we are basically at 2000 levels of enrollment now as a system. I think the record highs of 2010 was like a false mirage, but instead of realizing a decline was coming, the schools built more buildings and hired A LOT of employees. And then as they gradually declined, they hung on to those employees. Some schools still seem to not be cutting employees, then when they finally do it's very drastic and instead of doing like 10 a year, they do like 80.

[complaint_hopeful]

Correct. The population in PA has been on the decline for decades. Population of high school graduates peaked around 2008 and PASSHE enrollment peaked around 2010. Surprisingly, college admissions is always aware of demographic studies but has always been able to ignore them. I think nearly every college thought they could persist through the decline of high school population. The biggest names will always be able to but the bottom 2/3 will see a wide range of impact.

The big cliff is coming though. The decline of young people was already getting steeper but 15-20 years from now it will be catastrophic. We're not having enough babies to replace our dying population even after immigration. And that was before Covid. Now with Covid, the gap between births and deaths is growing. People aren't reproducing even with marriage rates slightly increasing. They're not even adopting at the same rate as a few years ago. Since March 2020 there's been a huge dropoff in the number of people who think they're pregnant or who are actually pregnant. An alarming drop off.

So for higher ed, like I said, catastrophic. For government, probably the same. Fewer people means less tax revenue. I bet some states will be headed for a budget crisis in 15 years.

Yes - I read a book called The Accidental Superpower and saw the author speak at a conference. Part of his talk was on how when the Baby Boomers retire, which has already been happening that that the US is going to lose A LOT of tax revenue and have to raise taxes to compensate. Also, he talked about how the economy has been much better than it historically has ever been. We Americans expect this to continue indefinately, but he sees a reversion to the mean coming. There were a lot of nuances to these also. Like late career employees make the most money and you replace them with a lot of entry level workers making low money, etc.

He also talked about how the US basically patrols the oceans with our Navy making it safe for trade the world over. IF we stopped doing that, then oil prices could go crazy and there would be wars over oil and pirates would be attacking ships, etc.

Interesting read.