These Minnesota colleges could 'perish' after pandemic, researcher claims

Colleges and universities have already lost hundreds of millions of dollars in revenue to the Covid-19 pandemic. They're now scrambling to see how — or if — they can bring students back to campus this fall.

And it could get worse: A New York University professor scored hundreds of U.S. colleges and universities on their prospects in the aftermath of the pandemic, predicting that dozens will fail due to revenue streams being too closely linked to tuition.

In a quadrant-style breakdown of 437 U.S. colleges and universities, Scott Galloway details schools' value compared with their tuition and which ones are more or less vulnerable to the continued impacts from the novel coronavirus pandemic: Will they "thrive," "survive," "struggle" or "perish"?

UPDATE: Galloway has since changed the "perish" quadrant to "challenged" and upgraded the University of Minnesota-Twin Cities to "thrive" (from "survive" and Concordia College at Moorhead to "struggle" from "challenged."

"If students don’t return in the fall, many colleges will have to take drastic action that could have serious long-term impacts on their ability to fulfill their missions," Galloway wrote in a blog post. 

Galloway, who has been an outspoken critic of colleges' plans to bring students back during the pandemic, generally considers the upper echelon of schools safe, as well as the big public universities that serve as research and economic engines for their respective states. However, smaller schools could face spiraling revenues.

The financial challenge facing small colleges isn't new. The Business Journal took a look at the issue in 2017. What's new is how the pandemic has accelerated things.

Galloway's list, which is not peer reviewed and is considered by him as a working document that will change over time, includes 13 Minnesota colleges and universities. Carleton College was the only Minnesota school predicted to "thrive" by Galloway.

As of July 28, the Minnesota colleges Galloway predicts will "perish," in the current operating environment include:

Gustavus Adolphus College, St. John's University, St. Catherine University, St. Olaf College and the University of St. Thomas were all pegged to "struggle." The University of Minnesota's Twin Cities and Morris campuses are both in the "survive" quadrant.

The Business Journal reached out to all five of the schools listed in the "perish" quadrant. Ellen Johnson, vice president for enrollment management at St. Scholastica, said in a statement, "A St. Scholastica education remains a solid investment; an independent research project named it the top college in Minnesota for economic mobility of its graduates." Macalester also disputed the results.

Some schools in other states objected to Galloway's study, saying that the data was flawed or that it failed to include areas such as leadership or business strategy.

RELATED: See the full data set here

Galloway gave each university two scores: a value-to-cost ratio, which aims to quantify each school’s value relative to its tuition, and a vulnerability score, to quantify a school’s likelihood to be negatively impacted by the coronavirus pandemic. The value-to-cost ratio is based on the school's reputation and ability to serve as a career accelerant, the experience the school offers, and the caliber of its instruction divided by its tuition, Galloway said. He used multiple data sources, including the U.S. Department of Education, U.S. News & World Report, and Niche.com's Student Life Scores.

Larry Ladd, senior consultant with the Association of Governing Boards Universities & Colleges, told the Boston Business Journal that Galloway's research backs up the idea that many colleges will struggle.

“It's more data confirming that many colleges are in financial trouble, and that is true,” Ladd said.

However, the analysis may misrepresent individual institutions because it relies on just a few data points per school and therefore offers just a snapshot in time rather than a full, real-time picture of any one institution, he added.

It's worth checking out the comments to Galloway's post, as well, since others are chiming in with counter-arguments or criticism of his methodology or scoring of specific schools. There are also plenty of comments taking issue with the whole study. One reads, “Your foolish initiative can do more damage than Covid."