Stack the odds in favour of students
24 April 2020
Business schools have often done well in past recessions, but will have to innovate to be certain of the same outcome this time, writes Andrew Crisp.
The FT recently warned of university bankruptcies without government support, but suggested the Treasury was reluctant to step in. Many institutions are removing non-essential spend with some around the world already looking to reduce staff numbers. So how do universities and business schools move forward in the current crisis?
For business schools, the sector I know best, many will be hoping that history repeats itself. In previous eras of economic crises, there has often been a flight to study with people anticipating that learning new skills now will pay off as the economy recovers.
Indeed, in a THE webinar recently, Lord Willetts, former Universities Minister in the UK, suggested that with the labour market depressed universities might find a flood of school leavers heading to university and undergraduates looking to study Masters. However, in the UK and more widely, that flight to study may not be as strong as it was in the past or may look very different from before.
A decade ago at the time of the global financial crisis undergraduate indebtedness was a fraction of what it is today. Those completing an undergraduate degree in the UK may now have a £40,000 loan outstanding and may be reluctant to add to it with fees and living costs for Masters study.
Internationally, the market for provision of business skills has altered significantly in the last decade. Many new private entrants, often driven by technology-led platforms have entered the marketplace. Students may consider free skills acquired on LinkedIn Learning while working or a short course in digital skills with a provider such as General Assembly are a better way forward than a Masters degree.
The MBA market, which has historically been one of the major beneficiaries of economic downturn, was already changing prior to the arrival of COVID-19. The full-time market has been softening in a number of markets for a few years with a growing interest in blended and online degrees. That trend looks likely to be accelerated by the current pandemic.
So how can business schools stabilise or grow postgraduate numbers in the year ahead? A running theme in much of CarringtonCrisp’s research in recent years has been interest in the idea of a stackable degree, the opportunity for students to learn in bite-sized chunks over an extended period of time which when added together make a full degree. For students, the attraction of such an approach is flexibility and cost, but still the opportunity to get a degree which is a recognised qualification. For employers, potentially paying for the course, the attraction again is cost, but also learners are acquiring skills they can put to use immediately in the workplace, the day after they have studied in some cases.
A student could start a certificate online this September and as lockdowns ease turn that into an on campus Masters degree with further study from January 2021 or take the certificate, enter the labour market and return to complete their Masters with other certificates at a later date. Students are better qualified than just their undergraduate degree, employers get a skills boost in their workforce, adding in-demand skills, and universities get fee income that they might otherwise never see.
The government also benefits, potentially reducing claims on social security from otherwise unemployed students and gains a better qualified workforce. If the government sees benefit in such an approach they could make interest-free loans available for the certificate costs, perhaps £2,500, with nothing repayable for three years. Employers taking on graduates, but releasing them immediately for three months study or employing them part-time could be incentivised to take on some of the costs. Given where interest rates are at present, the cost would be small - 100,000 recent undergraduates taking such an option would cost the government £250 million upfront - a tiny amount in the scale of current expenditure to mitigate the impact of the pandemic.
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