Education institutions experience obstacles as classes move online

Steven Agran, managing director at Carl Marks Advisors, spoke with Yahoo Finance about the current challenges facing education institutions as they move classes online due to the coronavirus pandemic.

Video Transcript

MYLES UDLAND: All right, welcome back to "Yahoo Finance Live." Myles Udland with you here in New York. We're joined now by Steven Agran. He's a managing director at Carl Marks Advisors. And, Steven, let's just start with I think a topic that we haven't touched a lot in the last couple of weeks, which is what's happening right now with higher education and where the educational system as a whole goes from here.

If we go back in time just a couple of weeks here in the US, I think we saw a lot of the large-scale shutdowns happen at the university level, and then we saw it at the public-school level. States and municipalities across the country moved quickly. As you see the landscape right now for these institutions, where do they go from here to try to finish out this school year and then kind of pick the pieces up and figure out how to proceed when September rolls around?

STEVE AGRAN: Well, Myles, this is kind of the important part of the year. You've got your seniors who are graduating, and they're going to be integral into your future emissaries and your, you know, people who are going to talk about the schools. We're not talking necessarily about the well-known, highly branded universities. There's over 5,000 schools in the United States. The majority of them are small regional schools.

So they're dealing right now with the seniors who are graduating. At the same time, they're sending out acceptance letters for their new admits. So they're kind of at a major crossroads right now in the school year.

So if we look at this-- we'll take these seniors first. So the seniors are coming back from spring break-- or in this case, they're not coming back from spring break. A lot of them were looking towards this time of year. I know when I was in college, this was kind of the best part of the four years. It was that last term. You were able to hang with your friends and do that. That's what a lot of the students want to do. At the same time, they're also looking for jobs.

Well, they're coming back from spring break, and they're going home. They're not hanging with their friends. And all the job fairs that were scheduled are now not happening. So you've got a lot of anxiety with some of these students, so some of the recommendations we're making to university presidents and the administrations is to make sure you're keeping very good outreach and working with those students who are seniors.

You can't do anything trying to recreate their senior year and that last term, but you can help them making sure that they're getting in contact with potential employers. You're keeping in contact with them. You're making sure that the resumes are right so they can look back at the end of the year and say, OK, at least I had a positive experience when I finished off my college experience. It's not what I expected, but they helped me through. They kept communication and all that good stuff.

The other side of it is your incoming students. Again, a lot of high-school students were expecting to go on their revisit days. They were expecting to do their college tours with their parents, trying to make final decisions about where they may want to go. Well, that's still out there, and now you're asking students to make final decisions without being able to do that last touch of the university. And as a matter of fact, they can't even talk to really anybody there because all those people are home.

So this is a really anxious time for the new incoming students and for the graduating students. It is key for the administrations to make sure they're doing correct outreach to reach both of these very critical constituencies for the future. They really need to make sure that the graduating students who will be future donors and the incoming students who are going to make up their classes for the next four years are involved in the process and feel like they're wanted by those schools.

JEN ROGERS: We've been talking a lot about the balance sheets and the solvency of companies, public and mom-and-pop companies. For schools, obviously large, well-endowed schools are going to be able to handle the shutdown, but should we be expecting that there are smaller schools that are on the bubble that actually won't make it through this crisis?

STEVE AGRAN: I think that's absolutely going to happen. It was already happening as it was now. There's been a lot of schools-- smaller schools-- that are having challenges.

I think one of the things that people have been-- or schools have been against is kind of merging the programs with other smaller schools in their area. The big schools have kind of forced the smaller schools to offer everything to everybody, and they just don't have those resources. So while you may have a couple of schools in the area, maybe one's going to give all the business courses and one will be a science, but the other schools will be able to batch on and send some of their students to take a class or two there so they don't feel like they have to have everything for everyone.

So I think you're going to see a massive, you know, consolidation, again, in the smaller-school space. It's been happening. These schools, as you said, are not well endowed. They're having some challenges, and they actually live semester to semester. And right now it's really challenging because a lot of them rely on that summer term. Well, I don't think you're going to find a lot of students right now signing up for the summer term.

ANDY SERWER: Hey, Steven, I have a college senior, so I feel a little pain there through her, and I'm also on the board of a college. So I've been watching this sort of unfold real time from various perspectives. It's been very, very difficult, and some are rising to the occasion. Some are not, as you indicate.

What are some other things that the schools are looking at in terms of making the decisions about getting people back to class, about graduation, summer programs? And then let's talk about something we haven't even mentioned, which is the fall semester. I mean, is that even under question?

STEVE AGRAN: Well, all of those are challenges. What I've been telling most people I'm dealing with is right now the horizon and the information out there is so much changing on a regular daily basis that trying to cancel graduation right now or even say we're definitely going to have graduation right now is almost impossible. So you've got time.

I mean, there are schools that have early May graduations. They're going to have to make a decision pretty soon. But the ones who are late May or June, you still have some time. And while we all are expecting the worst right now given, you know, what the situation is and how long China took to get through this, for parents, this is their opportunity to go enjoy their graduating senior's time in the limelight. It's really going to be kind of harsh for them and for the graduate students.

As far as the fall goes, again, I think we're probably pretty good for fall. The question is you've done your acceptances now. You've sent out your acceptances in the next couple of weeks, if they haven't been done already. You're trying to predict who's going to accept you, and one of the challenges you have is you don't know. Are people going to hesitate going to a city school because there's been extensive outbreaks more in the city schools?

Are people going to want to stay around local and go more to schools in their area because of the concern that this whole outbreak has begun and created, things that you never thought about like, hey, I've got to pick up my senior's or my student's belongings from their dorm room within the week. And I live in Florida, and they are in Miami of Ohio University. I have a friend who's dealing with that. They have to get in a car, drive out there, pick up the stuff, and they were never expecting that. I think those are challenges.

But as I said earlier, the summer term is really the one right now that is going to have a major issue because I don't think they're going to have very strong registrations for summer. The fall term, you know, it's going to be what it's going to be. I think the students are going to be very excited when they get to their schools, that's for sure, after dealing with this.

I mean, I've got a senior in high school right now, and, you know, they're kind of upset. They're not going to have potentially graduation. They're not going to have a senior prom, potentially. They're not going to have that last, you know, couple of weeks and months hanging out in the nice weather here, but that's the reality of what we're living through now.

It's not going to end immediately. We're hoping to get to graduation. That's kind of the key of what people are focusing right now. Maybe you get back the middle to end of April, but, you know, what we were just talking about looks to be kind of challenging.

HEIDI CHUNG: Hey, Steven. You know, one of the things that struck me about the closures with universities is how little investments were being made towards online learning. You know, it sounds like it was single digits. I mean, it seems like a lot of these bigger universities were well prepared for that. But I'm wondering if the lasting impact of what's happened or played out over the last few weeks is the fact that universities are going to invest a lot more and move a lot more classes online.

STEVE AGRAN: Online learning has been huge or a huge opportunity for a lot of universities, but there's been a lot of pushback. The administrations that have on-site campus learning kind of feel that this could impact them a little bit, which it can.

Also, it's not really simple. It takes potentially years to set up a curriculum, and a lot of effort goes into every single class that goes from on-site, on-campus learning to virtual learning. So it's not a very easy that I'm teaching a class at the campus level. I'm just going to convert it very quickly to an online learning experience. It's a very, very large investment and a very time-consuming investment, and you really have to create a administration and a learning group that is geared to that learning, which is very, very different, especially for the younger students, the 18-, 19-, 20-year-old students.

Online learning, while they live their life online these days, our kids, trying to learn and deal with that could be something different. I mean, I've got my daughter right now who's doing online learning, and you're asking them to watch a computer screen basically for seven, eight hours a day. There's a little challenge in that. It's a little different on the college level, but from-- you know, any kid who's going through this right now, it is a definitely different experience than what they were expecting from an on-campus situation.

MYLES UDLAND: All right, Steven Agran is the-- or is a managing director at Carl Marks Advisors. Really appreciate the time today, and we'll talk to you soon.