American colleges face new challenges, threats

Sanjay Paul September 18, 2013 0

Just when a college thinks it’s landed a $250 million gift —poof — it is taken away in a trice. In July, Homer noted, as he bit into a scone without icing, that Centre College in Kentucky had received a staggering donation from one of its alumni, a successful businessman. It was one of the largest gifts made in higher education, and the lucky college lost no time in drawing up plans for spending the largesse.

But now, alas, Homer learned, due to a business plan that went awry for the donor, the
gift has been withdrawn

In 2012, Centre College’s endowment stood at $207 million, not an insubstantial amount for an institution with less than 1,400 students, but still, thought Homer, the news had to hurt.

Colleges have to deal not only with broken promises, but also with competition from unexpected sources. The sudden rise of the MOOCs — Coursera, edX, Udacity — has brought online courses to the masses at a fraction of the cost of a traditional education. Whether this new medium proves to be effective remains to be seen, but few colleges can afford to ignore its growing presence.

Nor can colleges afford to overlook another, perhaps more insidious source of competition: the celebrity university. In recent years, well-known public figures have opened universities bearing their names. There was Beck University, for instance, founded by radio talk-show host Glenn Beck. During his tenure on Fox News, Beck used a whiteboard to explain his complex ideas on the economy, society, politics, culture and indeed on almost any subject under the sun. The reaction from his studio audience was always one of worshipful admiration, not unlike that evinced by Homer’s own students, and it wasn’t long before a supremely confident Beck launched his university to educate the public and possibly make a little bit of money in the process.

College presidents all over America were alarmed. Beck University was bad enough, but there was worse to come. Soon came news that Donald Trump, perennial presidential candidate, was launching his own institution of higher learning. With his usual modesty, he named his new venture Trump University, but, following the threat of legal action by education authorities in New York who felt that his
promises to dispense real-estate wisdom did not quite add up to a university-level education, changed it to the Trump Initiative.

Now, this new nomenclature should have given pause to prospective customers — Homer hesitated to call them students — but some 5,000 people elected to sign up anyway for the Trump-branded education. It did not come cheap. Fees for the Trump Elite package reached as much as $35,000 a course.

The Trump University, or Initiative, or whatever it was called, posed a serious threat to traditional colleges, especially when taken together with Beck University. A student could enroll at the latter and learn all about political science, economics, sociology and other traditional subjects. And then she could simply stroll over to Trump U. and learn how to sell real estate. It was an unbeatable combination.

But in August — a bombshell! The state of New York brought charges against Trump’s school, accusing it of engaging in illegal business practices. The lawsuit claims that the school had not hired instructors or even created any curriculum.

All this is hard to believe, thought Homer. Didn’t the Trump name denote quality and good taste? Trump himself has said that the lawsuit was politically motivated. He claims that 98 percent of evaluations rated his students as “extremely satisfied.”

You cannot quibble with numbers like that.

If he were a college president, Homer thought, he would certainly keep a wary eye on developments in the Trump case. The future of American higher education is at stake.

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