Will half of U.S. colleges be bankrupt in 10 to 15 years?

Is the conventional, brick-and-mortar college experience coming to an end? It could be as many post-secondary institutions are facing the reality of bankruptcy…and the free market.

According to CNBC, Harvard Business School professor Clayton Christensen is projecting that half of the more than 4,000 colleges and universities in the United States will be bankrupt within the next 10 to 15 years.

Not only are these entities experiencing a mismanagement of funds with lavish campuses and facilities, they are continually unable to compete with the trends in the marketplace. Christensen avers that the future of education will be online, and it is serving as a cost-effective and convenient way for students to obtain an education.

This ultimately undermines the business models of colleges and universities, and will eventually “run them out of business.”

CNBC further writes:

At the Innovation + Disruption Symposium in Higher Education in May, Christensen specifically predicted that “50 percent of the 4,000 colleges and universities in the U.S. will be bankrupt in 10 to 15 years.”

More recently, he doubled down on his statements, telling 1,500 attendees at Salesforce.org’s Higher Education Summit, “If you’re asking whether the providers get disrupted within a decade — I might bet that it takes nine years rather than 10.”

Christensen is not alone in thinking that online educational resources will cause traditional colleges and universities to close. The U.S. Department of Education and Moody’s Investors Service project that in the coming years, closure rates of small colleges and universities will triple, and mergers will double.

The only thing that may prevent this from happening are donations that stem from alma maters who were influenced by a professor or coach. Citing his research, Christensen conceded:

“Maybe the most important thing that we add value to our students is the ability to change their live. It’s not clear that that can be disrupted.”

Either way, as Mark Perry of the American Enterprise Institute notes, this is a “bold creative destruction prediction.”

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