Acton Institute Powerblog

Whose Higher Ed Bubble Will Burst?

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Consider the following (emphasis added):

“Higher education is an industry in danger,” says Clayton Christensen, the Harvard Business School guru and a senior advisor (unpaid) at Academic Partnerships. “It’s very plausible to say that 15 years from now half of the universities that exist will be bankrupt and in some fundamental way facing extinction and the need to totally change themselves.” (Caroline Howard, “No College Left Behind,” Forbes, 2/12/14)

Richard Lyons, the dean of University of California, Berkeley’s Haas School of Business, has a dire forecast for business education: “Half of the business schools in this country could be out of business in 10 years—or five,” he says. (Patrick Clark, “Half of U.S. Business Schools Might Be Gone by 2020,” Businessweek, 3/14/14)

What do you think? Are the doomsayers about the higher ed bubble generally too pessimistic? Are there discernibly different markets for different kinds of higher ed.? If Lyons is right about the dynamics of B-schools, are there similar dynamics at work for divinity schools and seminaries? Are such religious institutions more or less vulnerable?

There’s no shortage of those warning about various iterations of a higher education bubble. It’s almost a cottage industry. Are they Chicken Littles or true prophets?

For more reading, consider the Controversy in the Journal of Markets & Morality, “Should Students Be Encouraged to Pursue Graduate Education in the Humanities?”

Jordan J. Ballor Jordan J. Ballor (Dr. theol., University of Zurich; Ph.D., Calvin Theological Seminary) is a senior research fellow and director of publishing at the Acton Institute for the Study of Religion & Liberty. He is also a postdoctoral researcher in theology and economics at the VU University Amsterdam as part of the "What Good Markets Are Good For" project. He is author of Get Your Hands Dirty: Essays on Christian Social Thought (and Action) (Wipf & Stock, 2013), Covenant, Causality, and Law: A Study in the Theology of Wolfgang Musculus (Vandenhoeck & Ruprecht, 2012) and Ecumenical Babel: Confusing Economic Ideology and the Church's Social Witness (Christian's Library Press, 2010), as well as editor of numerous works, including Abraham Kuyper Collected Works in Public Theology. Jordan is also associate director of the Junius Institute for Digital Reformation Research at Calvin Theological Seminary.


  • Dylan Pahman

    This is a great observation. No doubt we will see the fall of individual departments before whole universities, but to what extent and how soon are not clear to me. Change is coming, but that does not mean that change cannot happen within universities.

    Re: divinity schools and seminaries—*if* the reality of the job market ever catches up to prospective PhD candidates, I could see many PhD programs folding. But churches will always need pastors, and many still expect some form of theological and pastoral education, if not an MDiv.

  • RestlessLegs

    The bubble has already burst here in Illinois. The state university where I teach has seen a 20% drop in enrollment in just the last seven years. Seven years ago, our spring FTE enrollment was 9,800. This spring, it’s 7,800. Part of the problem is that we’re in Illinois, which is second only to New Jersey in the number of residents leaving the state. Also, the cost to attend here has more than doubled in just 11 years, and the price is simply getting out of reach for many people. We’re already undergoing some serious downsizing in faculty and staff, and I won’t be surprised to see some departments get the axe in the next several years. On top of that, I’m worried for the long-term survival of the entire university.