It’s not coronavirus alone but it was almost a final straw on top of other financial threats. Schools are braced for a dose of tough reality.- UK private schools feel pandemic squeeze
And so it begins – the great corona virus contraction of 2020. The old new normal is now the new abnormal normal.
After the global recession of 2008-2009 everyone started using ‘the new normal’ to describe the changed state of school finances following the financial crash and world crisis. It described circumstances that were once almost unthinkable but were now commonplace and routine.
Expect ongoing waves of turbulence and change
Now – as the whole world confronts the impact of a pandemic that has whole industries and countries shut down – there is literally no business as usual. And when things do recover – as they will – chances are that the new normal will be ongoing disruption. Meaning: Expect ongoing waves of turbulence and change
As for education – which has seen other industries (retail, news, transportation, hospitality and etc.) turn upside down – this is your moment. Your turn in the barrel.
Many independent schools and colleges were already under pressure and now this: The primary revenue source – tuition-paying students – can’t even enter the building even if schools were able to attract them in the numbers they need to break even or thrive.
There’s a new structural reality and it threatens the very foundation of the old model of education. What is school when it is not a building or a campus or a specific location? Time now to strategize around that reality, anticipate the impact, and plan scenarios that build in flexibility. More so than ever before: Hunker down in the middle of the road, prepare to get run over.
The Problems Pre-date COVID-19
And things were not looking good before this spring.
Birth rate dips, affordability, demographic challenges, decline in international student enrollment and the challenge of low cost alternatives were already pushing many schools to the brink. Many families were deciding they could not afford tuitions that outpaced stagnant wages and inflation. And perhaps, just not buying the value proposition anymore. It’s possible to buy a whole lot of educational enrichment and/ tutoring with the price of an independent school tuition. When the public option is good enough perhaps private is just not worth it.
It’s hard for schools to compete with free and especially when what they offer is not valued or very different from the low cost/ no cost alternatives.
What will happen?
Of course, I don’t have any clue. But when does that stop anyone from having an opinion? But here’s my take. And I’m using up all the metaphorical hyperboles of perfect storms, seismic change and tidal waves.
Options will shrink as schools consolidate, contract or close. Some – those with the reputations and/or big endowments will thrive, but changed. This crisis will affect them too. Overall enrollment will drop and for families who can afford it, it will be a buyer’s market for a while as schools reshape themselves for the new world. Financial aid budgets will be stretched if they were not already. This may buy time but who knows for how long.
2008-2009 was the worst recession since the Great Depression and its impact was deep and long-lasting. It will prove a ripple in a village pond compared with the tidal wave that is now upon us.
Back in that day schools responded by “right-sizing” and “reductions in work force” and all kinds of other belt -tightening budget measures. Some recovered well. And others not so much. Some areas of the country recovered and others settled into the new more austere normal. But the forces of disruption were lurking and they showed up in a variety of ways. Boarding schools saw softer enrollment and even in strong independent school markets like New York City lower school enrollment softened and it became harder and harder -especially for K-8 schools – to fill spots when students left. And Baumol’s disease meant that tuitions just had to keep on going up.
And, when the money started flowing in again, some schools launched into the facilities arms race – new science buildings, a swimming pool, another set of squash courts, an arts wing. And right now all those shiny new facilities are empty. And – for schools that rely on revenue from facilities rental and summer programs now cancelled – the situation gets even worse.
And habits were changing. Families no longer made a commitment to a school for life but were happier shopping around on a year-to-year basis. Loyalty to institutions started to seem a thing of a past golden age.
Families wanted to customize their experience. They liked the STEM or music program but were not interested in athletics. They wanted this, but not that.
Most indy schools managed to survive 2008-9 and open the next year because they were able to rationalize, right-size, re-think and re-organize. It was painful, meant hard decisions and changed expectations. That and a whole lot of financial aid. All of that provided a breathing space for many schools but did not change the fact that many were at their break-point in terms of tuition.
2020 is a whole different magnitude of circumstances and challenges. And so full of so many unknowns that almost any confident prediction except ongoing disruption is foolish.
The education industry was already under strain. New low-cost and no cost options provided competition – eating into the traditional market with magnet and charter schools, homeschool co-operatives, online offerings and all kinds of pop-up and hybrid alternatives. :
The global pandemic is the game-changer and not just because of its enormous and immediate impact. It exposes the fault lines beneath the surface that were already causing small quakes in the school firmament.
For those paying any attention, we already know that the fourth industrial revolution is upon us – artificial intelligence, smart machines, automation, robots and all the rest. Knowledge as a prized and limited possession is a thing of the past. The key skill is the capacity to learn and the ability to solve problems and create, collaborate and communicate. And to care and think about community in ethical, humane and global ways.
Now is the time for school leaders to exercise those skills and that capacity. And good luck because it may truly mean sailing into unknown seas to unknown lands where dragons lie.
The Challenge Is On
So the challenge is on and it’s about what kinds of school do we need to serve what kinds of ends and which institutions – by virtue of resources, skill and good luck – are going to be able to survive this perfect storm and not hurtle off the cliff. This time.
There will be no new normal in the sense of s settled and secure future for school. And forget all the usual ways of going about strategic planning. Imagining and thinking into the future based on the Why of school is more important than ever.
So – what do we really know about how kids learn?
And what do we know about what schools need to look like – and focus on – if kids are going to thrive in this new future of theirs?
Many private schools, including richer institutions with endowments and freehold property such as Eton, are offering discounts of 30 per cent or more, as well as financial aid, extended credit and future fee freezes. – UK private schools feel pandemic squeeze
And one last thought: Perhaps this is step along the way to ending schools that serve only to perpetuate class and wealth distinctions and prop up privilege at the expense of social and economic justice. But I dream.
You raise some very fair points in this post. For me, the consolidation piece was ready to happen anyway. Whether we see this this year due to economically forced restructuring, I don’t know. Many independent schools we work with are actually engaging support to target a new subset of their existing segmentation. A level that haven’t considered independent schooling for their children, but have now moved to that model, as they feel they have adapted to COVID-19 better and can offer a more stable learning environment (remotely or with smaller class sizes).
There are never perfect storms, but we may well see some micro-climates.
Thanks for the post!
All the best,
James
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Hi James – I think there are perfect storms. But, as always, a crisis is too good of an opportunity to let go to waste. And that of course takes the courage to lead and the imagination to see a way forward. That plus a whole boatload of good luck.
How it is for the educational management consulting industry? Lean times? Or golden harvest? Tempest toss’d? Or safe harbor niches?
Hi Josie,
Sorry for the late reply – for us it has been extremely busy, less so in the education sector directly, but certainly in supporting areas. Budgets are hard hit, enrollments are down and many have moved into a let’s do what we have always done mode, to offset the losses, rather than reinvent the wheel. Something that can seem in some circles counter-intuitive.
We are starting to see that corner turn now, it’ll be interesting to see how enrollment numbers look in a months to two months time. Probably going to be a good yard stick.
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True the economy is really getting down.
Good work Josie, I would like to appreciate the time and efforts you have put to provide such content. Your efforts and articles are one of the ways to stay engaged in this outbreak. Thanks for such knowledgeable content.
Josie, Thanks for this piece. Lots with which I enthusiastically agree and have been writing and talking about the coming consolidation and compression in the non-public school world for years. Yes, the change is on, greatly accelerated by this deadly, exquisitely effective virus. There is opportunity once the immediate threat yields to a vaccine but the world will look different. Nothing since WWII will have reshaped us as this will. Give up the antiquated agrarian school calendar? Reconceive of a more integrated K-16 educational ecosystem? I just read in another context that Henry Ford said that everyone could have a car of the color they wanted as long as that color was black. Might we see blossom a rainbow of wildly different educational options? Hope you are well. My beloved Brooklyn is battered and besieged but this borough will eventually bounce back (how’s that for an overly alliterative ending?)
I too have been thinking a deal about WW2 and parallels with this strange time of crisis. (Hoarding, the value of rationing, good government, making do, wasting not, coughs and sneezes and all the rest of it.)
At some point there will be more effective treatment and a vaccine but not for a while so the deadly toll will keep on rolling. And this time will re-shape us.
In the UK the change of leadership in 1940 made all the difference. The coalition government of Churchill and Atlee focussed on winning the war and that meant keeping the support of the British public aligned. It was in the middle of the war that the plans were laid for a fairer and more just future. The Beveridge Report of 1942 was the plan to slay the five giants of evil: Want, disease, ignorance, squalor and idleness. It was the blueprint for all the reforms of the post- war Atlee government. But leadership was the key. Churchill’s in 1940. And then Atlee’s in 1945 after the electorate had the wisdom to vote Churchill out of office.
Something will surely come of this crisis too. And one hopeful sign would be a change in leadership next November. By then perhaps the great American public will be completely done with all the “winning” and ready for some structural change including in education. (The educational effect of Beveridge was a very mixed blessing.)
A “rainbow blossom” would be most welcome indeed!
Meanwhile I count my blessings and hope that you and yours are healthy.
Thanks for the comments John.
Yes, you dream…but the first step toward making that dream come true is to end the nightmare presidency of The Donald in November. Four more years of Trump’s anti-intellectual malevolence, and you can kiss all our dreams goodbye for as far as the wise can see.
Yes. Indeed. 100% true. Dreaming is important but organizing and planning are essential.
It is astonishing to me that anyone can still support the babbling yam. I understand the Republicans for whom he is a great cover for their grift and corruption but anyone else? Unbelievable that his malignant narcissism, incompetence and criminality are acceptable to so many.
wonderful post, Josie. It is hard to imagine the huge effect this will have in education, but you have done a great job outlining what this new abnormal normal may look like. I teach in college, and am starting to wonder if classes will be held on campus in the Fall. That could be devastating. If that is the case, I wonder how many kids will simply delay starting college by a year.
By the way, we just watched The English Game on Netflix, and loved it. Interesting that you bring up Eton in your post, since it is prominently featured in the series.
I think the corona crisis is accelerating what was already happening. If colleges are not open in the Fall then so many students will be shopping around for the colleges that seem to have the most robust online presence/ offerings. And tuition for that won’t include bed and board/ residential.
And the loss of summer revenue will hit many colleges hard. All those wonderful facilities built to attract the best students – all standing empty. Those assets become financial liabilities in the short run at least. The most attractive college assets may become the teachers who can best and most effectively adapt to distance learning.
And then of course we’ll have the baby boom of 2020-21 coming “on-line” enrollment-wise! Hope the virus has burned itself out by then and /or we have an effective vaccine.
Glad to have the Netflix tip. Always looking for something good to watch. Will have to look out for that. Been watching “World on Fire” these last few evenings and that’s been ‘enjoyable’.
I have been saying for these past years that one of the key things that needs to change here in feudal land is we need to get rid of private aka public schools and all the class privileges they help perpetuate. So I share the dream and whatever emerges that we always work toward to better education opportunities we received and that all deserve.
Yes – it’s rather hard to find any compassion for Eton’s finances and especially given the recent crop of politicians it has given the UK.