Higher education has taken a hit in the past two years from the coronavirus pandemic, including a drop in student enrollment and concerns about college affordability.
As a result, it’s forcing the industry to rethink what it brings to the younger generation, according to the CEO of a major education company.
“The value of education needs to be redefined,” Chegg (CHGG) CEO Dan Rosensweig told Yahoo Finance at the World Economic Forum (WEF) in Davos, Switzerland. “What is the cost? “What is the program? What is the value? What’s the pot of gold at the end of the rainbow if you do?”
College enrollment has taken a toll in the wake of COVID-19 and continues to decline, according to the National Student Clearinghouse Research Center.
In the fall of 2021, college enrollment fell 2.7%, which was larger than the 2.5% decline schools had experienced the previous year. The declines aren’t a drop in the bucket – nearly a million students haven’t enrolled in a tertiary institution since fall 2019.
Enrollment is important for a college because the more students enroll, the more tuition they pay, which is a key revenue driver for schools.
The affordability of college is another factor at play here, as it has deterred some students from even going to college. Yahoo Finance previously featured a software engineer who took this alternative route and managed to land a high-paying job without incurring student debt.
However, many still believe in the value of a college degree.
According to the New York Fed, outstanding student loans stood at $1.59 trillion in the first quarter of 2022. This represents an increase of $14 billion from the previous quarter. Only 5% of student loans are seriously delinquent or in default, due to the CARES Act which suspended reporting on the current status of student loans.
Title IV schools derive revenue from these student loans which are taken out by students as “financial aid”.
Companies are also inadvertently exacerbating this tendency to prioritize work over college due to the tight job market. A survey of 1,250 hiring managers by ResumeBuilder.com found that one in five companies are abandoning education requirements to keep pace with hiring, with only 43% of jobs requiring only a college degree. high school education or less for entry-level jobs.
Just over half of hiring managers surveyed said they had reduced or eliminated requirements for entry-level jobs, and a majority of them – 66% – said they were doing so specifically because of difficulties in attract candidates due to labor shortages.
For a company like Chegg, which offers textbook rental services, among other things, declining enrollment also means bad news: Declines mean fewer customers.
However, Rosensweig is still optimistic about his industry and said the company has pivoted based on trends in higher education.
“In the case of Chegg, which provides academic support and skills, as our skills business continues to evolve and students take different paths to careers, we have many opportunities for growth,” he said. he declares.
More Yahoo Finance coverage of WEF 2022:
Aarthi is a reporter for Yahoo Finance. She can be contacted at email@example.com. Follow her on Twitter @aarthiswami.
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