There was reason Sweet Briar College’s announcement that it was going out of business came as such a shock last week. There was little indication — not even government metrics designed to warn against college instability — that the Virginia school was in dire straits.
But officials decided that waiting for the lights to be shut off was the least desirable way to cope with the inevitable. Sweet Briar — which has served its students for more than 100 years — will cease operation at the end of the school year.
In response to the news, Mark Cuban — the entrepreneurial billionaire who owns the NBA’s Dallas Mavericks — tweeted, “This is just the beginning of the college implosion.”
Those who have been following Cuban know that he has been warning of the “student-loan bubble” for years. He expressed his concerns on Inc.com last summer, but has also been writing about it since at least 2012.
He was so intent on ringing alarm bells, he developed a college loan debt clock, which shows students owe $1.3 trillion on college loans. Credit card and auto loan debt stands at $1.6 trillion with college loans closing fast.
“We freak out about the trillions of dollars in debt our country faces,” Cuban wrote three years ago. “What about the TRILLION DOLLARS plus in debt college kids are facing?”
“At some point it’s going to pop,” Cuban told Business Insider. “When you’re 18 years old and you don’t really understand all the nuances of what it’s going to cost to pay something back — it was almost inevitable.”
Richard Ekman, president of the Council of Independent Colleges, told Inside Higher Ed that “idiosyncratic” institutions — places like women’s colleges, historically black colleges and colleges of denominations — face unique challenges while larger public institutions will likely become the norm. Perhaps the challenging attributes unique to Sweet Briar — an all-woman liberal arts college in rural Virginia — extend far beyond the student-loan bubble, but Cuban’s “canary-in-the-coal-mine” fear is too great not to consider.
In fact, he isn’t the only heavy hitter trying to bring attention to a looming national crisis. In the week before Sweet Briar’s stunning announcement, six U.S. Senators — including Connecticut’s Richard Blumenthal and Massachusetts’ Elizabeth Warren — penned a letter to Education Secretary Arne Duncan criticizing a system that suffocates students. “It is not the job of the Department of Education to maximize profits for the government at the cost of squeezing students,” the letter said.
Cities of Promise — which highlights programs trying to battle an unsustainable system (even lotteries couldn’t keep pace) — welcomes opinions, solutions, possibilities and anything else that can help push the conversation. What will colleges do to adapt? And when? If your business model is founded upon easy credit in a rapidly-changing environment, waiting is not an answer. Expecting young people and families to shoulder the burden will prove unwise.
As for Mark Cuban, we’d love to talk to you.