The New Abnormal

It’s not coronavirus alone but it was almost a final straw on top of other financial threats. Schools are braced for a dose of tough reality.- UK private schools feel pandemic squeeze

And so it begins – the great corona virus contraction of 2020. The old new normal is now the new abnormal normal.

After the global recession of 2008-2009 everyone started using ‘the new normal’ to describe the changed state of school finances following the financial crash and world crisis. It described circumstances that were once almost unthinkable but were now commonplace and routine.  

Expect ongoing waves of turbulence and change

Now – as the whole world confronts the impact of a pandemic that has whole industries and countries shut down – there is literally no business as usual. And when things do recover – as they will –  chances are that the new normal will be ongoing disruption.  Meaning: Expect ongoing waves of turbulence and change 

As for education – which has seen other industries (retail, news, transportation, hospitality and etc.) turn upside down – this is your moment. Your turn in the barrel. 

Many independent schools and colleges were already under pressure and now this: The primary revenue source – tuition-paying students – can’t even enter the building even if schools were able to attract them in the numbers they need to break even or thrive.

There’s a new structural reality and it threatens the very foundation of the old model of education. What is school when it is not a building or a campus or a specific location?  Time now to strategize around that reality, anticipate the impact, and plan scenarios that build in flexibility. More so than ever before:  Hunker down in the middle of the road, prepare to get run over. 

The Problems Pre-date COVID-19

And things were not looking good before this spring.

Birth rate dips, affordability, demographic challenges, decline in international student enrollment and the challenge of low cost alternatives were already pushing many schools to the brink. Many families were deciding they could not afford tuitions that outpaced stagnant wages and inflation. And perhaps, just not buying the value proposition anymore. It’s possible to buy a whole lot of educational enrichment and/ tutoring with the price of an independent school tuition. When the public option is good enough perhaps private is just not worth it.

It’s hard for schools to compete with free and especially when what they offer is not valued or very different from the low cost/ no cost alternatives. 

What will happen?

Of course, I don’t have any clue. But when does that stop anyone from having an opinion? But here’s my take. And I’m using up all the metaphorical hyperboles of perfect storms, seismic change and tidal waves. 

Options will shrink as schools consolidate, contract or close. Some – those with the reputations and/or big endowments will thrive, but changed. This crisis will affect them too. Overall enrollment will drop and for families who can afford it, it will be a buyer’s market for a while as schools reshape themselves for the new world. Financial aid budgets will be stretched if they were not already. This may buy time but who knows for how long.

2008-2009 was the worst recession since the Great Depression and its impact was deep and long-lasting. It will prove a ripple in a village pond compared with the tidal wave that is now upon us. 

Back in that day schools responded by “right-sizing” and “reductions in work force” and all kinds of other belt -tightening budget measures. Some recovered well. And others not so much. Some areas of the country recovered and others settled into the new more austere normal. But the forces of disruption were lurking and they showed up in a variety of ways. Boarding schools saw softer enrollment and even in strong independent school markets like New York City lower school enrollment softened and it became harder and harder -especially for K-8 schools – to fill spots when students left. And Baumol’s disease meant that tuitions just had to keep on going up.

And, when the money started flowing in again, some schools launched into the facilities arms race – new science buildings, a swimming pool, another set of squash courts, an arts wing. And right now all those shiny new facilities are empty. And – for schools that rely on revenue from facilities rental and summer programs now cancelled – the situation gets even worse. 

And habits were changing. Families no longer made a commitment to a school for life but were happier shopping around on a year-to-year basis. Loyalty to institutions started to seem a thing of a past golden age.

Families wanted to customize their experience. They liked the STEM or music program but were not interested in athletics. They wanted this, but not that.  

Most indy schools managed to survive 2008-9 and open the next year because they were able to rationalize, right-size, re-think and  re-organize. It was painful, meant hard decisions and changed expectations. That and a whole lot of financial aid. All of that provided a breathing space for many schools but did not change the fact that many were at their break-point in terms of tuition.

2020 is a whole different magnitude of circumstances and challenges. And so full of so many unknowns that almost any confident prediction except ongoing disruption is foolish.

The education industry was already under strain. New low-cost and no cost options provided competition – eating into the traditional market with magnet and charter schools, homeschool co-operatives, online offerings and all kinds of pop-up and hybrid alternatives. :

The global pandemic is the game-changer and not just because of its enormous and immediate impact. It exposes the fault lines beneath the surface that were already causing small quakes in the school firmament.

For those paying any attention, we already know that the fourth industrial revolution is upon us – artificial intelligence, smart machines, automation, robots and all the rest. Knowledge as a prized and limited possession is a thing of the past. The key skill is the capacity to learn and the ability to solve problems and create, collaborate and communicate. And to care and think about community in ethical, humane and global ways.

Now is the time for school leaders to exercise those skills and that capacity. And good luck because it may truly mean sailing into unknown seas to unknown lands where dragons lie. 

The Challenge Is On

So the challenge is on and it’s about what kinds of school do we need to serve what kinds of ends and which institutions – by virtue of resources, skill and good luck – are going to be able to survive this perfect storm and not hurtle off the cliff. This time. 

There will be no new normal in the sense of s settled and secure future for school. And forget all the usual ways of going about strategic planning. Imagining and thinking into the future based on the Why of school is more important than ever.   

So – what do we really know about how kids learn?

And what do we know about what schools need to look like – and focus on – if kids are going to thrive in this new future of theirs? 

Many private schools, including richer institutions with endowments and freehold property such as Eton, are offering discounts of 30 per cent or more, as well as financial aid, extended credit and future fee freezes. – UK private schools feel pandemic squeeze

And one last thought: Perhaps this is step along the way to ending schools that serve only to perpetuate class and wealth distinctions and prop up privilege at the expense of social and economic justice. But I dream.