Plus: Back-to-school shopping is getting pricey, weekend reads, a spicy Nugget, and more.
RE-AOL is an online project that recreates the look and feel of the ‘90s internet. The design includes lo-fi graphics, chat rooms, and the familiar sounds of AOL Instant Messenger. **Door shut**
In today’s email:
Higher ed: Why are colleges merging?
Chart: Inflation, back-to-school edition.
Weekend reads for your Friday cocktail.
Around the web: Lifestyle creep, all about traffic cones, so many online radio stations, and more cool internet finds.
🎧 On the go? Listen to today’s quick podcast to hear Juliet, Zack, and Rob discuss college mergers, TikTok’s “pink sauce” craze, why Americans are moving to Europe, and more.
The big idea
Higher education meets high finance
Academia and industry have some stark differences — but a new trend in higher ed is straight out of the corporate playbook.
There have been 95 college mergers in the past four years, 21% more than in the previous 18 years, per The Wall Street Journal.
Why would colleges merge?
Like most things in business, it starts with supply and demand. Demand for college degrees has been falling due to:
Rising prices: The student loan crisis has caused many parents and students to question the economics of a college education.
New alternatives: Tech firms like Google, Microsoft, Coursera, and Teachable offer courses for a fraction of the price.
Another reason? National sentiment around college is shifting. In 2019, only 51% of US adults said they considered a college degree to be “very important,” compared to 70% in 2013.
But not all schools are struggling
Brand-name schools and state schools are doing just fine. It’s the community colleges and smaller, less prestigious private schools that are getting hit the hardest.
One example is Mills College, a historically all-women’s school near Oakland, California — not far from Silicon Valley. This proximity made the school a target for Northeastern University’s M&A team when Mills announced it would close in March 2021.
The deal looks like a no-brainer:
Northeastern took on Mills’ $21m worth of liabilities and invested $30m to continue the school’s feminist legacy. In exchange, it got Mills’ land, estimated at ~$1B, its $191m endowment, and an art collection featuring works by Winslow Homer.
This is just the beginning
When the pandemic swept the country in 2020, the US government dropped $76B to help colleges avoid financial peril. While the short-term solution helped, it’s also allowed struggling schools to delay the inevitable.
Robert Zemsky, a professor at the University of Pennsylvania, suggests 500 four-year colleges and universities may close in the near term.
In other words — a lot more acquisition targets.
After the bell: Snap shares fell over 25% in after-hours trading after the company reported it fell short of revenue and earnings estimates in Q2. The company says it will slow hiring going forward, and refused to provide guidance for Q3.
Health care haul: Amazon announced plans to acquire One Medical, the membership-based health care provider, for ~$4B. The deal enhances Amazon’s health care aspirations, which already include a digital pharmacy and telehealth service.
New feeds: Facebook launched a new tab in its iOS and Android apps called “Home.” It’s designed for algorithm-based discovery, much like TikTok. The tab previously known as “News Feed” will henceforth be known as “Feeds.”
Healthy workplaces: Whether it be mental health workshops or family planning support, creating comprehensive wellness programs helps keep workers happy. Learn how to design benefits that fit your employees on the Hustle blog.
Inflation’s impact on back-to-school shopping
It’s hot AF outside now, but autumn will be here sooner than you think — and that means back-to-school shopping.
The back-to-school market is now worth $34.4B for K-12 students, per Deloitte. And this year, parents are expected to spend an average of $661 per child, up 8% YoY and 27% from 2019.
Why the rise?
Oh, just that major bummer reigning across all markets right now: inflation.
“It’s not that people are really buying more, it’s just the costs have truly changed in the past year, based on our survey,” Alex Vaz, senior manager for Deloitte & Touche LLP, toldFortune.
How’s this affecting parents?
A Morning Consult survey found just 36% of parents think they can easily afford supplies, down 16% from last year.
Worth noting: In 2021, many parents received enhanced tax credits and federal help, but not in 2022.
To save, some parents are turning to used or refurbished items, while others are checking for deals and sales, such as Amazon’s recent Prime Day.
Parents will also spend less on technology and more on clothing and accessories, which are 18% more expensive this year, as kids ditch at-home education for in-person schooling.