Back To School

Articles From: Heptagon Capital
Website: Heptagon Capital

By:

Equity Fund Manager

Heptagon Capital

The start of September marks the beginning of a new academic year. This is an important time for many, your author’s twin children included, who will be commencing their secondary education. The bad news is that today’s learners face more pressures than ever. For those at university, the statistics are stark: 38% of students do not graduate and of those who do, 41% find themselves underemployed despite having taken on $30,000 of average debt to earn a degree. These data relate to the US (and come courtesy of Chegg), but the problems highlighted are universal.

Fear not, however, there are solutions on hand. At one level, school and university architecture is being improved to create environments more conducive to learning. Significant sums of pandemic relief money in the US (and likely in other countries too) has been earmarked for educational improvements. Gone is the model of classrooms and hallways. Forward-thinking schools increasingly feature improved lighting and ventilation, better disability access and new facilities such as wellness spaces that promote mental health and outside areas more connected with nature. 

An increasing number of businesses (such as Chegg) have also expanded their platform of learning tools in order to provide additional academic support to students in their studies. 92% of students polled by Chegg said that such a platform helped them to better understand the concepts they were studying in school while a similar figure was of the view that these tools enabled them to work more efficiently.

Developments such as these matter. Typically, when the economy slows down, more people return to school (either to gain a degree or a professional qualification). Chegg noted on its August earnings call that “significantly” more students had taken summer school courses relative to a year prior. Some of this may be attributable to a post-pandemic catch-up effect, but the trend is still notable. Of course, better learning spaces and tools are not a panacea. Educational stakeholders need to think about how to allocate resource to the most deprived areas, which have suffered disproportionately in recent years. The UN warns that 23m learners (from pre-primary to university level) may never return to school because of the pandemic. As a reminder, the fourth of its Development Goals calls for ensure inclusive and equitable quality education for all.

Originally Posted September 2, 2022 – Back to school

The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Heptagon Capital is an investor in Chegg. The author of this piece has no personal direct investment in the business. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.

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