This is the first time higher education has faced the dual-crisis of finance and health.
After World War II, the American higher education foresaw a significant expansion, which helped their economy to grow. During the Great Recession, a similar plot took place: College enrollments surged along with the tuition fees.
In an ever-expanding industry, a tremendous amount of money has been circulating since then: contributing to the economy and funding for infrastructures and research models — but in a rather unsustainable manner with unsustainable debt levels.
The global economy has faced several recessions. However, the current global economic crisis we are facing is different: it is more so focused on saving lives, and then saving the economy.
With travel bans, lockdown, and social distancing enforced to minimize the transmission of coronavirus, enrollments face new uncertainty.
This is the first time higher education has faced the dual-crisis of finance and health. Thus, it’s hard for institutions to strike a sustainable balance.
Higher education was already on the verge of collapse long before the coronavirus forced the world into lockdown.
In the past eight years, colleges and universities alike had been facing the decline in domestic enrollments, only saved by the significant increase in international enrollments. But since the commence of the US-China trade war, international enrolments had also fallen low.
To attract more students, enormous debts were used to invest in infrastructures such as student centers and research labs. Such investments require a continual cash flow. Recessions jeopardize that cash flow. The financial future of most of those institutions were already at risk. Their annual operating budget desperately depended on the students’ tuition fees, which have been increasing.
As previous recessions illustrate, higher education has always been one of the first budget lines to be cut due to declining state appropriation needed to balance budgets. Competing against expenses such as health and pension, higher education is an easy target, as it was throughout previous recessions.
To manage unsustainable debt, colleges and universities would shift the costs to the students by increasing tuition fees — quicker in public institutions than in private. Student debt would rise as the student loan limit is relaxed.
Over the years, financial aid has increased substantially — although not enough. But the institution’s debts and tuition fees will outweigh the financial aid.
For instance, in March 2020, the congress of the U.S. has approved $14 billion (economic rescue measure against the coronavirus)for the educational sector: over $6 billion in student aid; and about $7.5 billion for institutions. However, colleges and universities are already spending around $8 billion just to refund room and board charges for the current academic year, according to the American Council on Education (ACE). Only 1% of that student aid has been distributed.
During previous recessions, enrollments saw bloom. What about now?
Enrollments were highly positive during previous recessions. As earnings decrease and unemployment rises, a theory suggests that individuals will be more likely to attend college. Research from Dellas and Sakellaris (2003) shows that when the unemployment rate rises by 1 percent, college enrollment doubles.
Travel bans and lockdown enforced all around the world has helped in minimizing the transmission of the virus. But the preventive measures themselves cause further consequences. All these pandemic preventions spell trouble to bring in international students.
For (and from) such unprecedented times like this pandemic, ‘Survey’ was invented. Asking the right questions to the targeted demographic results in much-needed data to evaluate the next steps. The primary targeted demographic are students, but they are not the only one to participate in such surveys: teaching staff, board members, parents, and all higher education stakeholders need to communicate properly as well.
Few surveys have already been carried out.
830 Chinese students have been unable to return to the US to continue their studies, as per a COVID-19 survey by the Institute of International Education (IIE). About 100,000 Chinese students who were in China for their Lunar New Year holidays were unable to return to Australia due to the pandemic enforced travel bans. In the UK, about 60 percent of Chinese students who have already applied to study in the UK next year are either likely to cancel their plans or have yet to decide, as per a survey by Matt Durnin, regional Head of Research and Consultancy, East Asia at the British Council.
These numbers are highly relevant to evaluate the probable future of higher education as China is the largest source of international students in the world. And international students contribute tremendously to the global economy through their enrolments as well as their accommodation costs overseas. For example, in 2018, international students contributed $39 billion to the U.S..; $37.6 billion to Australia.
India comes second to China. About 70 percent of prospective international students from India want to continue with their applications to study abroad, according to a survey by Yocket, a Mumbai-based EdTech startup.
In such a crisis, international students also suffer more.
Academically, every student suffers equally, but economically, it’s different.
This is a myth.
Every student doesn’t suffer equally academically. Some are well-equipped with technology for online learning; some may lack technology; some proper internet connection. Some may be fortunate enough to have enough savings, taking away the toll of worrying about survival.
This panic hampers mental health. Lack of mental clarity will indefinitely hurt academically.
Accommodation is always cheaper at home country when the income source is out of the question. Data shows that international students contribute more from accommodation expenses and similar living expenses than they do from their tuition fees.
Meaning that, accomodation triumphs tuition fees.A highly relevant aspect. In April, Australian Prime Minister Scott Morrison stated that foreign students in financial difficulty should leave. The infamous speech garnished a lot of criticism, citing that Australia should not be ‘biting the hand that feeds it.’
Because, once the coronavirus transmission is subdued, the competition for international students will be of massive importance; one which has been in action long before the pandemic. Australia has lost points in this regard.
Meanwhile, other countries are using strategic plans such as easing immigration rules. For example, Canada has permitted international students planning to begin studies in Canada for spring 2020, to complete up to 50 percent of their courses online — a mitigating measure away from travel bans from their home countries.
More surveys will follow. For the time being, the logical answer each survey points towards is E-learning. But it has its own caveats.
Going offline: a new kind of ‘dropping out’
As the majority of the universities are shut down physically, they are opting for online learning, and students are justified in asking for a price cut on their tuition fees. The expensive fees seemed to be for the ‘college experiences’ of falling in love, partying in dorm rooms, and so forth besides the course itself.
The debate of online learning versus traditional learning carries on now more than ever before. Professors, including some outdated from modern technology, are trying their utmost to learn to operate online software. Most of the students who have access to the required technology will attend classes. However, most universities are lacking a proper system to even carry out the basics such as taking attendance.
Absency, in the pre-coronavirus era, used to occur frequently in high numbers for several causes. So did dropouts. Now, most of the world’s educational institutions are physically closed, and courses have been compelled to move online. Once, majorly used to browse social media, is now forced to share the screen time with their respective professors.
But the caveat is that more students than previously are missing class.Some don’t log in; some don’t complete assignments; and so forth.
Most of the absence come from low-income students, who lack access to home computers and stable internet connection — or lack thereof in its totality.
Generating participation is also more difficult than it is inside a normal classroom. But online, it’s even more so.
Online classrooms might do for now, but it is unlikely to ever replace traditional classrooms.
Collapse or revolution? Conclusion.
The Covid-19 pandemic will ensure many of the small institutions to collapse entirely by disrupting the cash flow. Meanwhile, the future of the bigger ones remains in doubt. Cannibalism: the financially strong one consume the weak.
The three aspects — uncertainty in enrolments, unsustainable debt levels, and growth in online courses — have a massive role to play for the future of higher education. International competition does matter as well.
At the moment, in shaping the new world order, China is regarded as one of the top countries. It has already started to reopen its economy. It has provided strict guidelines to its schools and universities on how to physically reopen in an ‘orderly manner’.
Before the pandemic, Xi Jinping dedicated measures to improve education at all levels in China and envisioned producing at least 40 world-class universities by mid-century (the figure will rise to 16 by 2030). In 2018, two universities from China (Peking University and Tsinghua University)ranked inside the World University Rankings (Times Highers, 2018) top 30; outranking several prestigious institutions in Europe and the US.
If China finds a way to retain its Chinese students against overseas countries — taking advantage of this pandemic and travel bans around the globe — higher education won’t be the only thing that gets revolutionized. The world economy will too.
As previously mentioned: In 2018, international students contributed $39b to the U.S.; Australia, $37.6b. Of those figures, Chinese students alone contribute approximately about $13b to the U.S.;$12.1b to Australia.
China has an immense opportunity here: to promote its universities against online lectures amid lockdown elsewhere. As with the US-China trade war, China has the upper hand during this lockdown. The future of Economies and Higher Education will be affected by how China grasps this opportunity.
The hegemony of knowledge and the new world order: U.S. and the rest of the world
In today’s world, knowledge and technological advantages determine – to a large extent – differences in the management of international policy. The increase in a country’s intellectual power directly defines an increase in its economic power, thus changing its position in the international competition for dominance.
The power policy, first in the agricultural age and later in the industrial age, was characterised by military and then economic hegemony, while the power policy in the information age gradually reveals the characteristics of knowledge hegemony at both the scientific and intelligence levels.
The hegemony of knowledge in contemporary international relations manifests itself specifically as unequal exchange in international trade, exploitation of high-value information and various conditions related to technological production. Hence, we see the transfer of polluting industries from privileged to poor countries: energy-consuming and high-intensity activities.
Western culture and values are disseminated vigorously, through the so-called soft power in information and mass media, and take on obsessive and oppressively hypnopedic forms.
Developed countries have patents in the use of outer space, as well as in the development of deep sea resources and in the production of environmental resources that pollute, while developing countries can only sigh as they look at other’s oceans and satellites, which fly around, do reconnaissance activities and monitor them.
The resources of the great and deep seas – which should be shared by mankind as they belong to everybody like the air, the moon and the sun – are instead exploited by the developed countries. On the contrary, they freely and ‘democratically’ share with the wretched ones only the evil consequences of environmental pollution.
With specific reference to sanctions and armed interference in international relations, the technique of violent and conscious bullying is adopted: whoever is militarily stronger imposes the validity of their interests, also at legal level.
The root cause for generating knowledge hegemony lies in the polarisation of the intellectual status of the nation-State. Western developed countries have already crossed the threshold of an information society, while developing countries are still struggling to climb towards industrial civilisation from the most primitive and closed state of existence. Although developing countries hold most of the world’s natural and human resources (just think of Africa), they are far behind in science and technology. Just look at the continental histogram of the 207 Nobel Prizes in Physics from 1901 to 2017 (winners are counted by country of birth except for the Algerian Nobel Prize winner Claude Cohen-Tannoudji , who was born when Algeria was a French territory):
Source: Nadua Antonelli <<Africana>> XXIII (2017) page 12
If they have no means to study, even the greatest and most brilliant brains cannot make discoveries or file patents, looking only at the sky and the earth.
About 80 per cent of science and technology staff and their achievements are concentrated in developed countries. The knowledge advantage gives developed countries the right to set the rules of the game and of communication for all global knowledge production and dissemination. In particular, the developed countries’ knowledge advantages in the military and high-tech media enable them to expand their influence on the civil and military fronts and achieve their strategic objectives.
Developing countries wander between traditional society, modern industrial civilisation and post-industrial civilisation, and are often challenged and oppressed by the third party’s hegemony of knowledge.
The new economy created by the information revolution is still a ‘rich-country phenomenon’, the core of what is called ‘advantage creation’, under the cover of ‘competitive advantage’, or rather: competitive towards those who cannot compete.
The country leading the information revolution is the United States, which is the biggest beneficiary of these achievements. The digital divide highlights the status of the US information superpower. In the global information sector, in 2000 the central processing unit production in the United States accounted for 92%, and software production for 86%.
IT (Information & Technology) investment in the United States was 41.5% of global investment, Microsoft’s Windows system accounted for 95% of global platform applications, while the US Internet users accounted for more than half of global Internet users, and 58% of all e-mail goes through US servers.
E-commerce is worth 75% of the global total and US commercial websites account for 90% of the planet.
Currently, there are almost three thousand large-scale databases in the world, 70% of which are in the United States. There are 13 top-level domain name servers in the world and 10 of them are located in the United States.
The above figures far exceed the share of US GDP, which is 28% of the world total. The United States is far ahead of all countries in the world, including the other developed countries. The leading position in information technology allows the United States to control the basics in the field of information with its strong economic and talent advantages, as well as to master the actual rights, and to set standards and formulate rules and regulations.
The status as cradle of the information revolution has brought enormous wealth and development benefits to the United States. Since the 1990s, the development of information technology and the rise of the related industry have become an accelerator of further economic advancement in the United States.
In the growth of US GDP – from 1994 (the beginning of the Internet) to 2000 – the share of the information industry in the value of the country’s total output has caused the economy to rise from 6.3% to 8.3%, and the contribution provided by the information industry development to the actual US economic growth is estimated at 30%.
At the beginning of the 21st century, the United States – with its strong national-global power and the relative hegemony of knowledge/information – was already ready to build a new world order.
Knowledge is also the soul of military hegemony. Since the 1990s the United States (after the USSR’s demise) has taken advantage of its absolute leadership in information technology to vigorously promote a new military revolution and equip its armed forces with a large number of modern sophisticated weapons, especially cyber weapons: an overwhelming advantage in the conventional field, clearly overtaking the Third World, as well as its Western allies.
The US superiority in equipment ranges from one to two generations (i.e. from 15 to 30 years) over developing countries and from 0.5 to one generation over allies. All this has established the hegemonic status of the United States as the world’s number one military power.
Gulf Wars II (1991) and III (2003) (the first was the Iran-Iraq War in 1980-88), the Kosovo War (1999), the Afghanistan War (2001- still ongoing), and the Iraq War (2003-2011) were four localised wars that the United States fought to establish a new world order after the Cold War. During those events, the US hegemony was strengthened on an unprecedented scale and its attempt to establish a new order made substantial progress.
Moreover, backed by strong military advantages (scattering the planet with its own bases and outposts), as well as economic and technological advantages, those events ensured that the United States had and still has a leading position in the world, thus making the White House a planner and defender of the new world order. (1. continued)
Hardened US and Iranian positions question efficacy of parties’ negotiating tactics
The United States and Iran seem to be hardening their positions in advance of a resumption of negotiations to revive a 2015 international nuclear agreement once Iranian President-elect Ebrahim Raisi takes office in early August.
Concern among supporters of the agreement to curb Iran’s nuclear program which former US President Donald J. Trump abandoned in 2018 may be premature but do raise questions about the efficacy of the negotiating tactics of both parties.
These tactics include the Biden administration’s framing of the negotiations exclusively in terms of the concerns of the West and its Middle Eastern allies rather than also as they relate to Iranian fears, a failure by both the United States and Iran to acknowledge that lifting sanctions is a complex process that needs to be taken into account in negotiations, and an Iranian refusal to clarify on what terms the Islamic republic may be willing to discuss non-nuclear issues once the nuclear agreement has been revived.
The differences in the negotiations between the United States and Iran are likely to be accentuated if and when the talks resume, particularly concerning the mechanics of lifting sanctions.
“The challenges facing the JCPOA negotiations are a really important example of how a failed experience of sanctions relief, as we had in Iran between the Obama and Trump admins, can cast a shadow over diplomacy for years to come, making it harder to secure US interests,” said Iran analyst Esfandyar Batmanghelidj referring to the nuclear accord, the Joint Comprehensive Plan of Action, by its initials.
The Biden administration may be heeding Mr. Batmangheldij’s notion that crafting sanctions needs to take into account the fact that lifting them can be as difficult as imposing them as it considers more targeted additional punitive measures against Iran. Those measures would aim to hamper Iran’s evolving capabilities for precision strikes using drones and guided missiles by focusing on the providers of parts for those weapon systems, particularly engines and microelectronics.
To be sure, there is no discernable appetite in either Washington or Tehran to adjust negotiation tactics and amend their underlying assumptions. It would constitute a gargantuan, if not impossible challenge given the political environment in both capitals. That was reflected in recent days in Iranian and US statements.
Iranian Spiritual Leader Ayatollah Ali Khamenei suggested that agreement on the revival of the nuclear accord was stumbling over a US demand that it goes beyond the terms of the original accord by linking it to an Iranian willingness to discuss its ballistic missiles program and support for Arab proxies.
In a speech to the cabinet of outgoing President Hassan Rouhani, he asserted that the West “will try to hit us everywhere they can and if they don’t hit us in some place, it’s because they can’t… On paper and in their promises, they say they’ll remove sanctions. But they haven’t lifted them and won’t lift them. They impose conditions…to say in future Iran violated the agreement and there is no agreement” if Iran refuses to discuss regional issues or ballistic missiles.
Iranian officials insist that nothing can be discussed at this stage but a return by both countries to the nuclear accord as is. Officials, distrustful of US intentions, have hinted that an unconditional and verified return to the status quo ante may help open the door to talks on missiles and proxies provided this would involve not only Iranian actions and programs but also those of America’s allies.
Mr. Khamenei’s remarks seemed to bolster suggestions that once in office Mr. Raisi would seek to turn the table on the Biden administration by insisting on stricter verification and US implementation of its part of a revived agreement.
To achieve this, Iran is expected to demand the lifting of all rather than some sanctions imposed or extended by the Trump administration; verification of the lifting; guarantees that the lifting of sanctions is irreversible, possibly by making any future American withdrawal from the deal contingent on approval by the United Nations Security Council; and iron-clad provisions to ensure that obstacles to Iranian trade are removed, including the country’s unfettered access to the international financial system and the country’s overseas accounts.
Mr. Khamenei’s remarks and Mr. Raisi’s anticipated harder line was echoed in warnings by US officials that the ascendancy of the new president would not get Iran a better deal. The officials cautioned further that there could be a point soon at which it would no longer be worth returning to because Iran’s nuclear program would have advanced to the point where the limitations imposed by the agreement wouldn’t produce the intended minimum one year ‘breakout time’ to produce enough enriched uranium for a bomb.
“We are committed to diplomacy, but this process cannot go on indefinitely. At some point, the gains achieved by the JCPOA (Joint Comprehensive Plan of Action) cannot be fully recovered by a return to the JCPOA if Iran continues the activities that it’s undertaken with regard to its nuclear program…The ball remains in Iran’s court, and we will see if they’re prepared to make the decisions necessary to come back into compliance,” US Secretary Antony Blinken said this week on a visit to Kuwait.
Another US official suggested that the United States and Iran could descend into a tug-of-war on who has the longer breath and who blinks first. It’s a war that so far has not produced expected results for the United States and in which Iran has paid a heavy price for standing its ground.
The official said that a breakdown in talks could “look a lot like the dual-track strategy of the past—sanctions pressure, other forms of pressure, and a persistent offer of negotiations. It will be a question of how long it takes the Iranians to come to the idea they will not wait us out.”
Wendy Sherman’s China visit takes a terrible for the US turn
US Deputy Secretary of State, Wendy Sherman, had high hopes for the meeting in China. At first, the Chinese side did not agree to hold the meeting at all. The reaction had obvious reasons: Antony Blinken’s fiasco in Alaska left the Chinese disrespected and visibly irritated. This is not why they travelled all the way.
So then the State Department had the idea of sending Wendy Sherman instead. The US government actually needs China more than China needs the US. Sherman was in China to actually prepare the ground for Biden and a meeting between the two presidents, expecting a red carpet roll for Biden as if it’s still the 2000s — the time when it didn’t matter how the US behaved. Things did not go as expected.
Instead of red carpet talk, Sherman heard Dua Lipa’s “I got new rules”.
That’s right — the Chinese side outlined three bottom lines warning the US to respect its system, development and sovereignty and territorial integrity. In other words, China wants to be left alone.
The bottom lines were not phrased as red lines. This was not a military conflict warning. This was China’s message that if any future dialogue was to take place, China needs to be left alone. China accused the US of creating an “imaginary enemy”. I have written about it before — the US is looking for a new Cold War but it doesn’t know how to start and the problem is that the other side actually holds all the cards.
That’s why the US relies on good old militarism with an expansion into the Indo-Pacific, while aligning everyone against China but expecting the red carpet and wanting all else in the financial and economic domains to stay the same. The problem is that the US can no longer sell this because there are no buyers. Europeans also don’t want to play along.
The headlines on the meeting in the US press are less flattering than usual. If the US is serious about China policy it has to be prepared to listen to much more of that in the future. And perhaps to, yes, sit down and be humble.
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