the end of higher education as we know it
Higher education is a split system. On the one hand, you have elite research universities and liberal arts colleges. These institutions have a built in market demand – people want the prestige of spending time with leading thinkers. On the other hand, you have the other 95% of the higher education system: the army of community colleges, state colleges, and technical colleges. These colleges survive on a simple model: they sell basic training at a high price (a few hundred $ per credit) and the labor is cheap (often grad students or adjuncts).
Now, as reported by the Washington Monthly, there is a serious challenge to the system: a firm called StraighterLine now offers credit for $99/month. The concept is simple. For $99, you log into a web site and take as many courses you want via podcasts and videos. Instructors help you out via email and messages. Chat rooms help you work with other students. Study as fast or slow as you want. Most courses count for credit at real colleges, who have partnered with StraighterLine to provide instructors.
Though they overstate the point a bit, the Washington Monthly article is correct in pointing out that this firm undermines the business model of the community and state colleges. Why spend thousands of dollars, when you can get your math-accounting-econ courses efficiently done from the comfort of your own home? Working on the weekends, a lot of folks could do three or four basic courses for about $300. Huge savings – not just on tuition, but also on travel, lodging, books, etc. Sooner or later, people will realize that a lot of basic education can be done in this manner.
The teaching schools will change, but they will survive. Many teach vocational topics that probably can’t go online: police training/forensics, teacher training, nursing, etc. But it will be a different world when millions go the world of virtual education.
Photo credit: Steve McConnell / UC Berkeley. Photo date: 1/8/2007 12:02:36 PM. Courtesy University of California, Berkeley.
orgtheory.net 
Signaling is a huge factor (even more so for community colleges)… it will be quite a while before millions get a virtual education.
After all, we have public libraries, mit’s ocw, the internet, and so forth already. Higher Ed, sad to say, is only tangentially related to imparting information.
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Thorfinn
September 22, 2009 at 1:07 am
The change will probably be pretty rapid. Already online courses are picking up steam at many of these institutions. The only thing that keeps pricing up is branding and as you say, the majority don’t have the brand name needed to maintain high prices. This is probably a good thing.
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Fred H Schlegel
September 22, 2009 at 1:20 am
These business models have tens of thousands of years of evolutionary adapatations going against them. We are social creatures, and online courses can’t compete with in-person communication.
Present company is not excepted from this rule. Bloggers and blog readers substitute online communication for in-person communication that would be impossible — there isn’t any physical location that I know of (even in Silicon Valley) where I can chit chat about the range of topics I find presented on orgtheory, marginal revolution, or any of the other blogs that I follow…
StraighterLine will pick up the additional demand that opens up with lower cost supply — and there will probably even be a Netflix of such suppliers, which stands out among the rest for quality –, but it is not really competing for the same people that attend community colleges, much less research universities.
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Michael F. Martin
September 22, 2009 at 1:29 am
I’m a bit ocnfused by the pricing model. Admittedly I’m not at a small state school, but the rate other PhD students and I charge for tutoring is $50/hr. At 99 bucks a month, given the overhead, is each teacher giving you one hour of time? And mind you, this is the rate charged by students who haven’t gotten their degree yet.
That said, I see some value for “superprofessors”. Imagine if Noted Scholar X put together TAs at 50 lower-ranked schools, lectured over video, handed off questions to the TAs themselves, and thus taught 10,000 people a semester. Presumably this would allow the teacher to fund awesome levels of course preparation as well. In particular, I can see this happening for “Core” style courses (say, Western Civ) where there is very little interaction with a professor in the status quo.
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kcre
September 22, 2009 at 1:35 am
Imagine how much cheaper AND user-friendly this would be if it weren’t proprietary, but were instead organized on open-source and peer-network principles.
A free P2P University might include online lecture transcripts like those at MIT’s Open Courseware project, along with open-source textbooks (or even assign–with a wink and a nudge–proprietary textbooks available for free, in digitized form, via bittorrent at future incarnations of The Pirate Bay). Those in need of special help might turn to wikis, email lists and other social networking tools like those of various software or computer user communities (like user communities giving each other tips on how to fix Apple hardware problems the Genius Bar refuses to handle, Linux support, etc.).
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Kevin Carson
September 22, 2009 at 5:38 am
This seems to be a shocking insight to a lot of people–but not all students are interested in or well served by learning online! My (public) institution is currently experimenting with online and hybrid courses; while they’ve been very helpful for some students who have the skills and motivation to work in that structure, others avoid them like the plague. Market diversification can be a very good thing, but I just don’t see online education, especially self-paced online education, taking over the market any time soon.
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Mikaila
September 22, 2009 at 12:03 pm
Online learning is going to grow in ways and directions that we can only speculate on now. One of the posters mentioned “brand”. I believe that now with the increased need to have an MBA to get ahead in business this is where the brand will be most important. If I can get my “basic ed” requirements out of the way and recognized for transfer credits to a high branded institution (much how community colleges are used now) then I would be greatly ahead economically.
We have seen the entrance of “for profit” companies into Higher Education and as with most such schemes the quality is always sacrificed for profit and has been recognized by the brand dissolution of these schools. Higher Ed schools with a good reputation will struggle to maintain their reputation with the decreases in funding and increases in operating costs. Online is a “quick and easy” solution for the short term but has to be managed carefully so the schools do not lose their prestige in the long term. Online has many benefits that are afforded by the technology creating a new learning environment that can support many life styles and needs. “Change Managing” the transition is where the real work is in this. The technology is easy, people are a bit more of a challenge.
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OnlineGuy
September 22, 2009 at 1:20 pm
I’m not sure this “Netflix model” of higher education will last very long. Sure, it sounds quick, simple, and to the point, but it took quite a while for the University of Phoenix to grab a descent following. That may have been influenced by the technology at the time, but UP, Strayer, Capella, Kaplan, DeVry, and Walden (to name a few) went through an intense phase of scrutiny and some would say accountability to become the institutions they are today. They’ve established a pretty good hold on for-profit online education and have some measure of “quality” that people (somewhat) accept now.
Honestly, StraighterLine sounds like a new form of a diploma mill than a legitimate alternative to traditional higher education. It would be interesting to see how many faculty they have on staff, and how well/poorly they are paid.
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Hillbilly
September 22, 2009 at 1:57 pm
Mikaila: I don’t know why that would come as a shock to anyone here. Steve McConnell stipulated that some of the Washington Monthly rhetoric surrounding StraighterLine was exaggerated, and only argued that the business models of traditional universities would have to adapt to competing with “free.”
And StraighterLine’s course catalog is heavily weighted toward the kinds of lower level classes where the required skill set and motivation extend to sitting anonymously in an auditorium with five hundred other people listening to lectures from an overworked and underpaid grad assistant.
If traditional institutions are to adapt to the competition from free, one of the forces for adaptation will probably be the kind of “insider activism” your departmental bio says is one of your research specialties. Specifically, traditional universities will need to shift toward a low-overhead, bottom-up, stakeholder cooperative model of organization: eliminating prestige salaries, job descriptions, mission statements, overhead padding, and all the other Weberian trappings of Paul Goodman’s “culture of cost-plus.”
At the same time, we’re experiencing long-term structural forces in the larger society that may reduce the incentive for those who lack motivation and interest to attend college merely for the sake of its signaling and job guarantee functions.
Even a few years ago, James Bageant observed that the Empire had room for only about 25% of its population in administrative-technical positions, and that the rest of the educational machine only overproduced trained people to drive down their pay and keep them divided against themselves and loyal to the system.
I expect that an increasing share of students in higher education will be self-selected, studying particular subject areas out of real interest, with the pace and intensity of learning driven by that interest. The difference is illustrated by Phaedrus’ lecture on the Church of Reason in Zen and the Art of Motorcycle Maintenance:
http://mutualist.blogspot.com/2006/02/phaedrus-on-church-of-reason.html
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Kevin Carson
September 22, 2009 at 5:58 pm
Just to bring your attention to the spelling error: “Now, as reported by the Wahsington Monthly,”
Thanks. Great article.
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PolymerPhD
September 22, 2009 at 9:34 pm
I’m pretty sure I know the answer to this one, as I graded correspondence school when I was in graduate school. When you are working off all by yourself, it is hard to stay involved and get done. Correspondence school courses are cheap because the vast majority of students pay the tuition but never do more than 0 or 1 lesson. The instructors are paid by the lesson graded, not by the student/course. Looks to me like electronic correspondence school, working on the same financial model. There are a lot of students you’ll collect money from for whom you’ll not have to pay the instructor.
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olderwoman
September 23, 2009 at 1:43 am
[…] this orgtheory.net post, Fabio Rojas assesses the U.S. university “system” with admirable clarity: Higher […]
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Brokedown Palace: Higher Education À La Carte « Generation Bubble
September 23, 2009 at 3:03 pm
[…] most directly under threat right now. There are many new entrants such as StraighterLine that are offering to do this much less expensively than universities […]
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