Markets 1, Policy 0

I have had trouble writing about higher education the last few months, primarily because I have needed time to sit back and take stock of where we are, as a sector. When President Biden took office last January, he backed an ambitious higher education agenda. He proposed to create a free community college education for everyone, forgive college debts, dramatically expand the Pell Grant program and re-regulate for-profit institutions. This plan was clear, bold and ambitious. It represented a major effort to use federal policy tools to reshape the higher education market.

Now, one year later, it is highly likely that virtually none of Biden’s proposals will be adopted by Congress. Biden’s agenda was good public policy, in my opinion, but the reality is that it was dictated primarily by political need, not an assessment of the public good. This agenda was very popular with the left of the Democratic Party, and backing these proposals, many of them first articulated by his opponents in the democratic presidential primaries, was a relatively painless way of showing solidarity with the left, meeting them partway and quieting criticism that the president was too moderate, too centrist. Unfortunately, the Democrats never had enough votes in Congress to pass this agenda, and the odds of its passing have now dwindled to close to zero.

So where does that leave us—the higher education community—now? The simple answer is: at the mercy of market forces. The unifying theme of Biden’s agenda was to use government power to change market incentives and alter higher education’s current trajectory. Failure to pass that agenda leaves us right back where we were during the Trump administration. Higher education will go where the market takes us. That means a continuation of six major trends:

1. Continued reliance on debt financing to pay for education.
2. Strong brands will grow stronger.
3. Marketing is and will be king.
4. Consumer demand will drive programming.
5. Big tech will continue to enter the market.
6. Market segmentation will accelerate.

I will explain what these trends mean for us in my next post.