Should We Believe Scott Galloway’s Predictions of Soon-to-Perish Colleges?

What Did Scott Galloway Do on July 17?

On Friday, July 17, in an article on his website titled USS University, Scott Galloway published a list of 89 colleges that would perish and 129 colleges that would struggle in the coming months. Galloway based his conclusions on a formula that attempts to measure 1) a college’s value for its cost and 2) its vulnerability to COVID-19 related factors. Within hours, the Twittersphere was hopping with comments on his new post. I shared his results on my Linked In page Friday and received more views on it than anything I have posted in the last year.

We all like easy answers to complex problems. One of these problems is who and what is going to survive COVID? Most of our efforts are spent on people who are most likely to be fine (healthy and under 65 years old) or not (over 65 years old with additional health issues). The survival of entire industries is also receiving serious attention. Package delivery companies are getting rich while restaurants without take out are barely making it. But what about universities?

Galloway plays on a recent analogy of comparing colleges to cruise ships to suggest that the conditions aboard cruise ships are similar to colleges. Both venues bring large numbers of fun-loving people together to socialize and let loose for a period of time before returning to reality (in a number of weeks in one case or years in another). The CDC had a “no sail order” for cruise ships through July 24, 2020 – we can imagine how their industry is doing.

Because the college “cruise ships” (I realize colleges are much more than this) have not left the dock yet, there is still much hope that the condition of their passengers and the ship rules will prevent any similar CDC order. Scott Galloway has made his best first attempt at recommending which of these colleges’ guests may want to avoid getting on board.

At the risk of overwhelming readers, it is important to know what factor Galloway is using to make his predictions. Galloway describes his big variables as I) value and II) vulnerability. A college’s value is based on three factors A) Credential, B) Experience, and C) Education.

The Credential factor is based on a college’s a) their undergraduate admit rate, b) the amount of times the college’s name is searched in Google, and c) the institution’s rank in U.S. News. It is worth noting that the U.S. New rank is based on 15 factors of varying percentages.

The Experience factor is based primarily on millions of student responses to surveys from on the culture of their campuses. Galloway divides these three factors by their net price to students (i.e. the average price a student at their college pays.)

The Education factor is rooted in the return on investment for degrees 15 and 30 years out (i.e. how much a sum of money in the future is valued today; including costs, future earnings, and the length of time it would take to invest and earn a certain amount of money over a fixed horizon). The third component of the Education factor is the amount of money institutions spend on instruction/teaching per full-time student.

The scores from these three variables (after changing them to scales from 0-1) are multiplied and divided by the net price or average cost to a student (after changing to a 0-1 scale).

Galloway’s other measure of university’s likely survival is based on their vulnerability to COVID. This measure is based on two numbers – their endowment / student and the percentage of international students at their institution. He probably selected endowment per student as it is a respected measure of the college’s ability to have savings from which to draw during challenging financial times. He uses the percentage of international students knowing that they often pay high percentages of the listed price of tuition which results in major revenue (that would be at risk during COVID).

Galloway wisely suggests that he may have left out a number of variables that could improve his rating of colleges’ likelihood of survival. He mentions potential value coming from the percentage of commuting students or colleges with hospitals.

Galloway also acknowledges that one of his main goals to simply get the discussion going on what is going to happen to colleges. He welcomed feedback, including critiques, at

What is the Value of Galloway’s Research?

I don’t think we can say that Scott Galloway is not making an informed attempt at what many of us are trying to figure out. Galloway knows the value and of and uses the Integrated Postsecondary Education Data System (IPEDS) along with integrating the fifteen factors which make up U.S. News Rankings and the ten factors in’s rankings.

A number of the factors Galloway uses have been shown to demonstrate institutional instability. Endowment per full-time student is a commonly used measure of institutional strength. Admissions selectivity, although recently removed from U.S. News rankings, is still a factor that has been used in several reports to demonstrate institutional instability. First to second-year student retention has a strong correlation with institutional success.  Instructional expenses per full-time student demonstrate how much of an investment colleges are putting into the education of their students. Lower amounts on this measure have been correlated with institutions that close.

Although the amount of international students in the past would have only been used as a positive factor to an institution’s strength, Galloway is one of the first (after the Chronicle of Higher Education,) to use the percentage of international students as a risk to an institution.

We have struggled for centuries to figure out how to describe a student life culture in any meaningful quantitative manner. Galloway attempts to put some value on the culture of the college and surrounding community by using data from millions of student feedback points collected by

What Should We Question in Galloway’s Analysis?

While Galloway is transparent in providing his methodology, he does not explain in much detail why he selected and gave the various weights to the items. I am not a skilled data scientist – more of a fan and proponent of the new ways of intelligently using the information we have. This leads me to call several of his selections into question.

I will probably be one of thousands of critics of Galloway’s decision to include the student rankings of the party scene in the likelihood of an institution’s survival. While an active social life can be important to students, I am not aware of any correlation between the amount of alcohol consumed (score is linked to closeness of bars to campus) and the existence of a university. This is particularly evident when we examine the fast-growing adult-focused institutions growing faster than most traditional age college students. Does the almost entirely online Southern New Hampshire University’s party scene put them in trouble? I am not saying this is not important to a section of students but to have it as a factor in a university’s potential demise seems excessive.

I am way out of my league on understanding search engine optimization and Google keyword planner use. Galloway uses the latter as a third of his score for a college’s credential. I have never seen this measure be used as a measure of evaluating colleges but I am open to understanding it more. It strikes me as a creative quantitative measure of an institution’s popularity, but it also concerns me that this is the first time I have ever seen this criterion used.

Galloway’s incorporation of the return-on-investment of colleges, labeled as net present value, is welcomed. The data on this value was published for the first time in fall 2019 and has generated mostly positive attention. The primary drawback of this data is similar to what most rankings systems struggle with and that is the inability to disaggregate the students going to elite institutions versus the students going to less well-known colleges. Students lacking some established privilege would likely not be as successful if the institutions with high return-on-investment are not intentionally structured to provide additional assistance to them.

Last but not least, it would help if Galloway had explained why he gave his various factors certain amounts of weight. For example, the admissions selectively and Google search volume are worth the same amount as the  U.S. News ranking, which is a ranking comprised of fifteen different factors including graduation rates.  U.S. News has reduced admission selectivity to less than 5% of an institution’s ranking before eliminating it last year. Galloway not only brings admissions selectivity back, but makes it one third of a college’s credential score, equating that one measure with the sum of all fifteen of the U.S. News ranking factors.

What Is Missing from Galloway’s Analysis?

Because the fall of a college is a rare phenomenon, the examples from the past several decades have been thoroughly studied and used to attempt to provide greater predictability looking forward. In fall 2019 I led an independent study on the topic of institutional instability. We finished the semester by creating a list all the factors that had been published in various articles and reports that were linked to institutional closure. As already mentioned with regards to Galloway’s factors, many of the factors we identified were connected to the universities’ closure but were rarely identified as causal factors to the closure.

In comparing the list that we came up with last fall to Galloway’s factors there was some overlap. For example, endowment per student and instructional costs per students were both commonly mentioned factors in many reports along with student retention rates and net price.

However, many of the factors on our list were left out of Galloway’s analysis. Galloway might respond by indicating that many of these measures are not maintained in easily accessible locations on a national level. In most cases, that is probably true. On the other hand, making a prediction about a college’s closure is significant enough that a thorough review of the potential factors is warranted.

Examples of data that could be located but was not included includes variables with regards to institutional and student debt, fundraising and grants, budget cuts, leadership experience, online courses, student enrollment changes, and institutional type. A list of 50 factors that Galloway did not include in his analysis, but that have been mentioned in the research on college closures is available by emailing the author. Not all of these fifty factors are easily measured or accessed, but many of them would offer a more complete picture of institutions that may be identified as perishing.

Scott Galloway was recently described in the Chronicle of Higher Education as “Higher Education’s Prickliest Pundit”. His USS University article on July 17 was true to this descriptor. Depending on how you look at it Galloway has either catalyzed an important conversation or needlessly scared and offended hundreds of colleges. Both are probably true.

In 2015, Sweet Briar College’s Board announced they would be closing that summer. They still had 80 million dollars in their endowment at the time. They had a beautiful campus in the hills of the Blue Ridge Mountains. Unfortunately, they did not want to co-educate, they were geographically isolated, and their enrollment numbers and yield rates were declining. None of these factors are a part of Galloway’s predictions.

However, when Sweet Briar made this announcement the alumni rose up in opposition and reversed the decision. The little women’s college still exists today, albeit still small and struggling financially. One of the lessons taught to me by a former mentor who just so happened to have served on the Board of Sweet Briar and had a hand in encouraging closure, is that it is almost impossible to kill a college. There are many examples of colleges that were expected to disappear (e.g. Antioch – see picture) that did not because there were alumni who would not let it happen.

I share this because one thing Scott Galloway may need to get credit for is that the shock he just gave several hundred universities may lead to a push for survival that would not have occurred without Galloway’s conjecture. In short, I predict the colleges on the “Perish” list are now going to take more urgent and informed steps to prevent their demise. They may be the lucky ones who just received a shot of the virus in the form of a vaccine that will ultimately strengthen them for the coming months. Let’s certainly hope so.


1 Comment

  1. Thanks for pointing out some of the complex issues related to this analysis. As a higher education scholar, Galloways article was a very frustrating read. Unfortunately, there are many measurement issues that do not make for good “public comment” but are critical to the validity of the analysis. As but one example, the measure “Endowment per FTE” has fundamentally different meaning for a private and public institution. Mixing them together would be like applying hormone measures equally to men and women: yes both have estrogen and testosterone, but their levels have completely different meaning for men and women. Unfortunately, you and others note that this work seems informed because is uses some of the measures found in popular rankings, which are also not scientifically valid measures.

    In addition to not understanding the measures well enough, Galloway also does not appear to understand the industry beyond his own experience of it. (Which should not be totally discounted as he works in the industry). However, he does not appear to have done much research on how institutions evolve over time through mergers, reorganizations, etc., rather than simple closings.

    Galloway is correct that there will be notable pain and likely closing of hundreds of colleges. But they will likely be mostly small, private institutions, of which there are many that enroll very few students. The public institutions, which represent only 25% of institutions but enroll 75% of all students in postsecondary education, will see major fiscal realignments that are depending on their state and local context. Few, if any will “fail” but there will surely be more reorganizations of public systems to save money. Conversely, the private institutions that constitute 75% of institution but only 25% of enrollments are in a more dire situation and there will be more closings, mergers, and reorganizations than have already been occurring (which are not a trivial number).

    Thanks for providing me some space to offload these thoughts that have been troubling me since I originally read Galloway’s research. He may well be a Brand Strategy expert, but he is not a higher education expert.


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