Higher education is going to change a lot, soon

Washington Monthly runs a fascinating story, "College for $99 a Month".

But one thing about StraighterLine stood out: it offered as many courses as she wanted for a flat rate of $99 a month. “It sounds like a scam,” Solvig thought—she’d run into a lot of shady companies and hard-sell tactics on the Internet. But for $99, why not take a risk? . . .

Crucially for Solvig—who needed to get back into the workforce as soon as possible—StraighterLine let students move through courses as quickly or slowly as they chose. Once a course was finished, Solvig could move on to the next one, without paying more. In less than two months, she had finished four complete courses, for less than $200 total. The same courses would have cost her over $2,700 at Northeastern Illinois, $4,200 at Kaplan University, $6,300 at the University of Phoenix, and roughly the gross domestic product of a small Central American nation at an elite private university. They also would have taken two or three times as long to complete.

The author argues that higher education is about to be in the same position as newspapers are today:

Consider the fate of the newspaper industry over the last five years. Like universities, newspapers relied on financial cross-subsidization to stay afloat, using fat profits from local advertising and classifieds to prop up money-losing news bureaus. This worked perfectly well until two things happened: the Internet made opinion and news content from around the world available for nothing, and the free online classified clearinghouse Craigslist obliterated newspapers’ bedrock revenue source, the want ads. Suddenly, people didn’t need to buy a newspaper to read news, and the papers’ ability to subsidize expensive reporting with ad revenue was crippled. The result: plummeting newspaper profits leading to a tidal wave of layoffs and bankruptcies, and the shuttering of bureaus in Washington and abroad.

Like Craigslist, StraighterLine threatens the most profitable piece of a conglomerate business: freshman lectures, higher education’s equivalent of the classified section. If enough students defect to companies like StraighterLine, the higher education industry faces the unbundling of the business model on which the current system is built. The consequences will be profound. Ivy League and other elite institutions will be relatively unaffected, because they’re selling a product that’s always scarce and never cheap: prestige. Small liberal arts colleges will also endure, because the traditional model—teachers and students learning together in a four-year idyll—is still the best, and some people will always be willing and able to pay for it.

But that terrifically expensive model is not what most of today’s college students are getting. Instead, they tend to enroll in relatively anonymous two- or four-year public institutions and major in a job-oriented field like business, teaching, nursing, or engineering. They all take the same introductory courses: statistics, accounting, Econ 101. Teaching in those courses is often poor—adjunct-staffed lecture halls can be educational dead zones—but until recently students didn’t have any other choice.

Other people are warning that change is coming. Don Tapscott:

Universities are finally losing their monopoly on higher learning, as the web inexorably becomes the dominant infrastructure for knowledge serving both as a container and as a global platform for knowledge exchange between people.

Meanwhile on campus, there is fundamental challenge to the foundational modus operandi of the University — the model of pedagogy. Specifically, there is a widening gap between the model of learning offered by many big universities and the natural way that young people who have grown up digital best learn.

Peter Klein:

There’s no doubt the traditional model for producing higher education is grossly inefficient and that there’s been tremendous overinvestment in facilities and staff (malinvestment, in Austrian lingo) over many decades.

Seth Godin also sees a parallel to newspapers::

MIT and Stanford are starting to make classes available for free online. The marginal cost of this is pretty close to zero, so it's easy for them to share. Abundant education is easy to access and offers motivated individuals a chance to learn.

Scarcity comes from things like accreditation, admissions policies or small classrooms. . . .

If you think the fallout in the newspaper business was dramatic, wait until you see what happens to education.

(For interesting look at current Web courses, see "How Much Can You Really Learn With a Free Online Education?")

Lafayette College president, MBA, and former management consultant, Daniel Weiss:

I genuinely believe that we are at a crossroads here in higher education. I think we have reached a ceiling that we’re beginning to bump into.

Of course, some people, like Johns Hopkins professor David A. Ball, prefer to whistle past the graveyard:

Highly placed academics do have a tendency these days to decry their own supposed obsolescence. The former president of my own university, William Brody, liked to compare academia to the buggy whip industry. But where, exactly, is the proof of this obsolescence? Admissions to top American universities and college remains as competitive as ever--no matter how much, it seems, tuition rises. Despite an academic job market that has been anemic at best and disastrous at worst for more than 35 years, top Ph.D. programs still receive far more qualified applicants than they can hope to admit, include a rising proportion from overseas. America’s position in basic research, as measured in such things as Nobel Prizes, seems unchallenged. European academics generally regard the American academic system with untrammeled envy, while their own university systems go through crises that make ours look minor in comparison. Academia has suffered from the current economic downturn, just like virtually every other sector of the American economy. But this is the sort of “obsolescence” that Chrysler and The New York Times can only dream of.

And some colleges are refocusing on very crucial things, like which way the student guide faces on the ubiquitous college tour.

Comments

[pj]

Will be fascinating to see how this shakes out ... this depression, or the federal budget cuts which must come eventually, could be triggers precipitating the inevitable shakeup ... The rise of online education will be many decades in coming, but the period of high and perpetually rising tuition, infrastructure, and staff is likely over.

[Patrick R. Sullivan]

Rather than waste our children's time speaking to them via television, Obama ought to read this article and ponder its possibilities in K-12.

[John Henry]

Interesting. My main question is about the accreditation. The credits actually come from other junior colleges so I do not see how one can get an accredited BA from them.

Assuming that they can overcome this hurdle, this looks like a great idea.

I had been a bit dubious of online education. After 25 years teaching in the classroom, I started teaching online last March. So far I've completed 2 courses, and will start 2 more next week. It is different, to be sure and it requires some self-discipline. On the other hand, an awful lot of learning got done by the students and I think as much, perhaps more, than if they had just come to listen to me lecture.

The charge by month is not new either. Walden University charges by the month in their graduate programs. You can take as long as you like or do 2-3 courses at a time. All the same monthly fee. A lot more than the $99/month, though.

Thanks for the article, Craig.

John Henry
www.changeover.com

[Allen Cic]

When I started at Ohio State in 1957 tuition was $75/quarter. That was for 15 credit hours or more. If you took fewer than 15, tuition was cut in half. They raised it to $90 and everyone bitched about it. One quarter in a dorm cost $225 and that included all meals except Sunday dinner. Even linens and a maid to make your bed and clean your room each day. A rough rule of thumb was that a year of college would be about $1,000.

Of course a professor made around $7,500 a year. Even with a Ph.D. from Harvard.