Coronavirus Tests Role of Higher Education as Recession Buffer

Social distancing could lead to lower enrollment, and it’s unclear how many colleges and universities will reopen

By Josh Mitchell of The WSJ. Excerpts:

"In past recessions, the U.S. higher education system has served as a buffer of sorts by absorbing unemployed workers. The peculiarities of the coronavirus-induced recession present obstacles to colleges playing a similar role this time around, some economists say.

For one, it is unclear how many colleges and universities will reopen or to what extent, or how many people will decide to enroll. Many laid-off workers might lack access to high-speed internet to take online courses. It is also unclear how long unemployment will remain elevated, and whether students will acquire the skills they need in the post-Covid job market."

"Workers without a college degree have been hit the hardest and stand to benefit the most from gaining new skills. Jobs held by workers with only a high school diploma and no college experience were down by 5.5 million in June from February, Labor Department figures show. Jobs held by workers with a four-year degree fell by 1.1 million. The unemployment rate for the first group was 12.1% last month, compared with 6.9% for college graduates.

Some colleges have said most or all courses will be taught online this fall to prevent the spread of the virus. Some have said they will move entirely online. The American Council on Education said this spring that enrollment could fall 15% as a result. Moody’s Investors Service said it expects enrollment to rise, but that families will choose lower-cost options."

"Higher education may not be beneficial if workers take on debt they can ill afford to repay to obtain degrees that don’t lead to well-paying jobs.

A 2015 paper released by the Brookings Institution showed that the boom in enrollment during the last recession and the early part of the recovery was driven disproportionately by students at open-admissions schools such as community colleges and for-profit trade schools. Such students were far more likely to drop out and default on student loans than those who attended nonprofit and public four-year colleges, according to the study."