Opportunities in Education, Just Not for Schools

Education institutions are in a bad way, and the pandemic has made it worse. A new story in The New York Times describes how state funding for colleges has changed in recent years, with the above graphic summarizing the news.

In short, colleges are in a pinch. So, what happens when the pandemic slows state funding, which very well may be the case? Moody’s Analytics projects a 20% decline in state receipts next fiscal year.

Add on top of that viable alternatives to formal education. Ed tech companies like Degreed, Coursera, and Khan Academy—not to mention subject-specific bootcamps like General Assembly and Codecademy, or, hell, even YouTube—have a real shot at dominating the educational landscape.

Major companies like Google and JPMorgan Chase in recent years have been dropping bachelor’s degree requirements too.

Oh, in case you hadn’t heard, student debt is also a major concern. A dramatic chart from the American Enterprise Institute shows how the price of tuition and textbooks have risen relative to other goods and wages.

Source: AEI

With less and less going to college funding, more and more alternatives, lower barriers to entry, and growing pressure from student debt, this era might very well be the linchpin to undo higher education.

Work tech companies, especially in the learning category, have a huge opportunity over the next few years.