Chegg CEO: Coronavirus pandemic causing higher education bubble to explode
Dan Rosensweig says colleges have not adjusted to 'the needs of the current, modern-day student'
The coronavirus pandemic has been the perfect storm to bring about the end of the higher education bubble, Chegg CEO and President Dan Rosensweig told FOX Business’ “Varney & Co.” Wednesday.
“All the signs of the bubble are, when your market is shrinking, you raise your prices, you provide inferior products,” Rosensweig said. “One day, it explodes. And that's what's happening.”
According to Rosensweig, the U.S. is in $6 trillion of college debt with 40% of Americans not currently paying back what's owed. But 30% of college students are still working 40 hours a week, which he said signals the need for change.
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A student walks in front of the Old Main building on the Penn State campus in State College, Pa. Friday, Nov. 11, 2011. (AP Photo/Matt Rourke, File)
“I don't think America really understands who our college student is,” he said. “They're 25 years old, they’re often parents, they have jobs. They're increasingly women who have both family and jobs. And college has not adjusted itself to serve the needs of the current, modern-day student. They don't have [a] curriculum that's necessarily relevant.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| CHGG | CHEGG INC. | 2.11 | -0.19 | -8.26% |
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Rosensweig claimed the irrelevance of most college courses is widening the skills gap in America.
“Education raising its price is increasingly irrelevant, delivering in a format that is too expensive, that can't scale,” he said. “And so those are all the signs of the bubble. And look what's happening now, which is people are borrowing the money, but they're actually not paying for it.”