Monday, September 07, 2009

End of the World, Etc.

The three loyal readers I have (hi mom!) may recall that I cited some doomsayers a while back, and speculated along side them that the end of education as we know it is nigh. In particular, that education could be delivered for many subject in purely open-source online formulations. I came across another article on the education subreddit that has something to say on the subject. The Washington Monthly headline reads "College on $99 a Month."

The college in question is, although "college" may make you imagine more than what's here. There are no degree programs, only a handful of courses, which you can browse on their catalog. But the vision is certainly ambitious. From the article:
StraighterLine is the brainchild of a man named Burck Smith, an Internet entrepreneur bent on altering the DNA of higher education as we have known it for the better part of 500 years. Rather than students being tethered to ivy-covered quads or an anonymous commuter campus, Smith envisions a world where they can seamlessly assemble credits and degrees from multiple online providers, each specializing in certain subjects and—most importantly—fiercely competing on price.
This is an interesting idea--to create a collage college--the postmodernization of higher ed. I can see that the typical defensive policies of universities would get in the way of this--requirements to take the last thirty hours at the home institution, for example. And what does it mean to get a degree from My U, after all, if only a minority of credits come from there? That is left unexplained.

Smith's first venture in online education was, which delivers on-demand tutoring that colleges can buy in blocks cheaper than they can provide the service themselves.

The way for-profit education works is sketched in the article, and it's worth mulling over. Here's how author Kevin Carey describes it in the article:
Traditional universities are complex and expensive, providing a range of services from scientific research and graduate training to mass entertainment via loosely affiliated professional sports franchises. To fund these things, universities tap numerous streams of revenue: tuition, government funding, research grants, alumni and charitable donations. But the biggest cash cow is lower-division undergraduate education. Because introductory courses are cheap to offer, they’re enormously profitable. The math is simple: Add standard tuition rates and any government subsidies, and multiply that by several hundred freshmen in a big lecture hall. Subtract the cost of paying a beleaguered adjunct lecturer or graduate student to teach the course. There’s a lot left over. That money is used to subsidize everything else.
There are massive state and federal subsidies for higher education in the form of grants and loans to students. That part alone can easily come to 10K per academic year in my experience. Even without loans, let's say it's $5K per year, conservatively. At a bricks and mortar university there are lots of costs that burn through this quickly and only whet the appetite of administrators, who must rely on some combination of tuition, gifts, and endowment return to make up the difference. But by focusing just on delivering the product and turning a profit, a company like University of Phoenix Online can undercut traditional costs by enough to matter and still make a heap of profit. And the cost of delivery of instruction can only go down. For the tutoring service, Smith outsourced labor overseas.

As noted in the quote above, the fattest part of the market is the freshman level courses--ironically the ones profs typically don't like to teach. But that's where the juiciest FTE harvest is, and the place where a company like StraighterLine can come along and cheery-pick.

Anyone who's sat through a lecture with 300 other freshmen in a giant hall has probably wondered if there's not a better way to accomplish the same thing. Online delivery holds the promise of cheaper and better and more convenient: a disruptive innovation, a neologism coined by Harvard Business School Professor Clayton Christensen and entrepreneur Michael Horn:
Such services tend to start small and cheap, targeting a sector of the market that established players don’t care much about—like tutoring in introductory courses. “This allows them to take root in simple undemanding applications,” Christensen and Horn write. “Little by little, the disruption predictably improves… And at some point, disruptive innovations become good enough to handle more complicated problems and take over, and the once-leading companies with old-line products go out of business.”
If you read my blog, you'll note I'm always going on about the power of evolution to solve complex problems. This is an example--a description of a blooming ecology of solutions that will attack the problem (how to harvest the maximum amount of revenue from higher education) from all angles, until the traditional model dissolves.

But, as noted, the traditional model has its own defensive system. It's not as easy as all that to just walk in and eat the lunch of the edusaurus rex. Ed policies like the 30-hour limit, restrictions on transferability, and of course accreditation requirements--necessary to siphon off the nectar of state and federal grants--are significant obstacles.

The newcomers are evolving ways around these defenses:
[Smith] devised a clever way under the accreditation wall, brokering deals whereby a handful of accredited traditional and for-profit institutions agreed to become “partner colleges” that would allow students to transfer in StraighterLine courses for credit. After the credits were accepted—laundered, a cynic might say—students could theoretically transfer them anywhere else in the higher education system. The partner colleges stood to benefit from the deal as well.
The story doesn't end there. You can read the rest in the article. Suffice to say, it's an ongoing battle with accreditation and public relations.

On the other hand, completely free education is expensive: this chronicle article says that Utah State University is closing down its open courseware initiative after running out of grant money.

I think it's safe to say that we live in interesting times, and those of us who depend on the care and feeding of edusaurus rex should mind the scampering mammals underfoot and the chill wind from the north. But it's not the end of the world just yet.

Related posts: Open Ed Conference, Edupunk and the New Ecology, Open Courses, Unplanned Obsolescence

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