2040 Prognosis for Higher Education

This article originally appeared in The Chronicle of Higher Education on May 26, 2015.

By Gary Saul Morson and Morton Schapiro

Economists tend to be overly optimistic about growth and prosperity, while education experts tend toward unjustified pessimism. There’s no question that more and more people are arguing that, even if American higher education has had a golden age, by 2040 it will be long gone.

What will the future really look like?

There is a longstanding tradition of making bold, and spectacularly mistaken, predictions about American higher education. So it is with caution and modesty that we hazard a few of our own.

Who will teach?

One trend is clear: Tenure in American higher education has been significantly reduced. In 1975, 57 percent of all full-time and part-time faculty members were in the tenure system, a figure that has fallen below 30 percent today. Some observers predict that over the next 25 years, it will bottom out at 15 to 20 percent, largely limited to private or flagship public research universities and the wealthiest liberal-arts colleges. Our guess is that by 2040, that will be only around 10 percent. Some critics discern that as a blow to academic freedom; others anticipate declining efficiency and worsening undergraduate teaching.

But a recent analysis of data from our own university, Northwestern, indicates that the faculty outside the tenure system (a majority of whom are full time at Northwestern) actually outperform tenure-track and tenured professors in the classroom, at least in introductory classes taken by freshmen. They not only inspire undergraduates to take more classes in a subject but also lead them to do better in subsequent coursework. We applaud the increasing attention to the work conditions of non-tenure-line professors. Were they treated in a manner commensurate with their value, the rise of faculty members designated as teachers would be less a cause for alarm than some people think.

What will happen to support for public research universities?

We believe we are merely at a down part of a long cycle in federal research funding. There have been downturns before, but then support resumed its long-term upward trend, with Congress and the public recognizing the contribution of research to scientific breakthroughs and economic growth.

On the other hand, the days when public higher education attracted a stable share of state expenditures — once 7 percent, now 5 percent — are long gone. These two lost percentage points amount to around $30 billion, more than a third of current state appropriations to higher education. Almost all of that has gone to health care, specifically to Medicaid. Our best hope is that the 1990s repeat themselves and state budgets rise faster than the higher-education share of the pie declines. That would take robust economic growth, along with reining in not just health expenditures but also state-pension obligations. Not very likely.

So we expect that recent funding troubles at public institutions will not go away.

What will colleges and universities teach?

In times of uncertain economic growth, politicians focus on skills that translate fairly directly to employment. The STEM fields are today’s darlings, with the humanistic social sciences, the arts, and the humanities forgotten or worse.

That approach is shortsighted: No one should confuse starting salaries with ultimate earnings. Looking a decade or so beyond graduation, humanities majors generally have low unemployment rates and, in some cases, salaries mirroring those of workers with more technical training. To be sure, the lifetime earnings of engineering majors exceed those of arts majors by $1.4 million. But earnings of students who study the arts are nonetheless a robust $1.9 million. And, of course, the payoff to higher education isn’t limited to finances.

Still, the market test is whether students themselves are leaving the humanities in increasing numbers. By 2010 fewer than 8 percent of bachelor’s degrees were earned in the humanities. However, the biggest decline took place years ago; the percentage of degrees in the humanities has been relatively stable since the early 1980s. On the other hand, a recent study of Harvard University undergraduates shows a continuing downward trend. At Stanford University, around 45 percent of faculty members in the main undergraduate division are in the humanities, but only 15 percent of the students.

The future of the humanities may depend on a shift (we hope already taking place) away from scholarly trends that for decades have emphasized that there is no such thing as objective or intrinsic literary value. But great literature does what no other university subject can: It offers practice in empathy, emotional and intellectual, with people unlike ourselves. Increasing globalization and social diversity will put a premium on that crucial skill.

What will happen to liberal-arts colleges?

More than two decades ago, the economist David Breneman made the startling discovery that the number of "liberal arts" colleges was far smaller than popularly believed. Breneman took a close look at the 540 private colleges with few or no graduate programs and found that only 212 had even a large minority of students majoring in traditional arts-and-sciences fields. A recent study found that the number had fallen to only 130. The others had not closed but had added more preprofessional subjects and graduate programs.

The elite of the 130 remaining liberal-­arts colleges are stronger than ever, but market changes will make the true liberal-arts college more of a rarity.

Will technology change how we teach?

Some educators believe massive open online courses are the wave of the future. There is something attractive about being taught by the very best microeconomist or specialist in Russian literature and going at your own pace, and that model might productively supplement traditional pedagogy. But replace it? Think of it like this: Could you do psychotherapy this way? Presence matters.

Nor do we see the residential experience for undergraduates imperiled by remote learning, especially at the nation’s selective colleges and universities. Faculty members may be blissfully unaware of it, but much learning takes place outside of the classroom. Students reflecting on their treasured educational experiences cite favorite courses and the camaraderie of an intramural team. It is hard to believe they will ever cite beloved MOOCs.

Who will go to college?

College-enrollment rates in the United States are the highest ever: Seventy percent of high-school graduates attend a two- or four-year college within 12 months of graduation. But gaps in enrollment by income and race have persisted, and prospects for children of parents with educationally disadvantaged backgrounds are worse here than in almost all other developed countries.

Moreover, not all college attendance is the same. Of collegegoing students from families with annual incomes below $60,000 in 1999, only 6 percent enrolled at "elite" institutions, compared with 26 percent from families earning above $200,000. Recent data suggest that the disparity has been growing. And while collegegoing among black and Hispanic students has been increasing, it has primarily been at open-access institutions. Significant numbers of academically qualified minority students who would thrive at selective colleges do not enroll.
Will enrollment rates continue to rise? We must first ask: Will the wage premium for having a college degree remain at record levels? And how will sticker and net prices change? Many jobs that provided good wages to workers without college degrees still exist but are now located in Bangalore, Jakarta, and Shanghai rather than Atlanta, Chicago, and Cleveland. Moreover, the days when college graduates could expect to become richer than previous generations may be over. Still, we agree with the many economists who predict that the college premium will continue to rise and, with it, the demand for higher education.

That, however, will not translate into robust growth in college revenues. Tuition increases will continue to be eroded by growth in financial aid. Public scrutiny will put the brakes on tuition increases even if the market does not. We expect the most-­selective colleges to further limit prices. When you have a $4-billion operating budget and you net only $150 million from undergraduate tuition, you might eventually question the entire sticker-­price/financial-aid model. Why not let anyone you admit enroll free, as many colleges do for Ph.D. students? That would affect the vast majority of other colleges, which couldn’t possibly forgo undergraduate tuition revenue.

While the current funding model is not a bubble about to burst, economic, political, and competitive pressures imply that net tuition revenue will become a smaller portion of all institutional revenue.

Whether that will mean that more low-income students will attend college — especially selective ones — is as much a matter of sociology as of economics. The focus on "going to college" obscures the fact that college is not a commodity — not a good undifferentiated by quality. The many college-­outreach programs put into place in recent years will begin to help students and their families understand that.

Will the United States continue to attract large numbers of foreign students?

International students bring not only talent but also tuition revenue. Even at the most heavily endowed colleges, they receive little or no financial aid, either as undergraduates or as students in master’s-degree programs. Those dollars are especially crucial at the many less-prestigious colleges and universities that rely heavily on tuition. If foreign students stayed home, much of American higher education would feel the blow.

While the United States remains the global leader, attracting around 16 percent of all students who study abroad, 10 years ago the figure was 24 percent. As long as the overall number of students enrolling in a country other than their own continues its rapid climb, the declining share going to the United States need not be a problem. But as other countries open new colleges and universities, and increase the prestige of existing ones, the attractiveness of studying at an American institution without a global reputation will be reduced.

On the whole, however, we are optimistic about the state of American higher education in 2040. The best liberal-arts colleges will thrive — and will actually be teaching the liberal arts. Some faculty members will still be in the tenure system, but the many others will do a fine job emphasizing undergraduate teaching and will be appreciated and supported.

Public flagships will still be prominent, if not quite the world leaders they are today. American colleges and universities will continue to predominate, even if international competitors take away some full-paying foreign students. Many colleges will lose some pricing power, and all will face increasingly challenging political realities.

But a college degree will continue to be a great economic investment, and enrollments will increase to record levels. American higher education has long been the model for the world, and 25 years into the future, we are confident that will still be the case.

- Gary Saul Morson is a professor of arts and humanities in the Weinberg College of Arts and Sciences at Northwestern University. Morton Schapiro is a professor of economics and president of Northwestern. This essay is adapted from a book they edited, The Fabulous Future? America and the World in 2040, recently published by Northwestern University Press.