Innovative Models for Low-Cost Graduate Degrees
The price of college has increased faster than the median household income, while student loan debt has surpassed credit card debt for the first time ever. Along with their degrees, students graduating from college carry an average of $25,000 in student loan debt.
But while delinquency rates for all loans have trended downward for the past three years, student loan delinquencies have catapulted to 11.5 percent, and are 90 days past due. The United States has fallen from first to sixteenth worldwide in the proportion of college graduates.
This bewildering decline is untimely if we juxtapose statistics that demonstrate strong demand for workers with some level of formal learning after high school has grown by 3 percent each year, yet the supply of college graduates expanded by only 1 percent during that same time.
This issue could truly make or break our country’s economy. Rather than proposals to subsidize the growing price tag of a college degree, we should be tackling the underlying causes driving tuition hikes in the first place.
Outdated Business Models
The business models of our higher education institutions remain outdated as our institutions continue to resist the systemic change toppling, without exception, every other sector in our society — namely technology-enhanced efficiencies.
Exemplifying higher education’s resistance is its disjointed and negligent adoption of online education.
Rather than focusing on enhanced online education — able to deliver embedded content and assess understanding in a manner that is personalized to each student’s pace, path and needs—today’s institutions continue to stockpile embedded inefficiencies, reward bad incentives and resist online micro-credentialing efforts aligning programs to labor market demands.Instead, academic institutions cling to and clamor for grant and loan reforms that surrender at the outset to high tuition rates rather than utilize procurable technology able to disrupt the barren status quo.
Instead, academic institutions cling to and clamor for grant and loan reforms that surrender at the outset to high tuition rates rather than utilize procurable technology able to disrupt the barren status quo.
However, in the last 18 months, a few brave institutions have been attempting to attack the business model directly.
Georgia Institute of Technology’s $7,000 online master’s degree in computer science, created in partnership with the online education provider, Udacity, is a good example. The program charges online students the smallest amount necessary to cover its costs, which turned out to be $510 for a three-credit class.
By comparison, the University of Southern California charges its online students $5,535 for a similar three-credit class. Yet, both institutions are ranked within the top 10 computer science departments in the nation.
Why Low-Cost Is of High Importance
“In creating the program, Georgia Tech may have discovered a whole new market for higher education, one that could change the way we think about the problem of college costs.”
The effort at Georgia Tech is transformative because it demonstrates that the negative headwinds that have plagued online education are beginning to shift — at least at the graduate school level.
Name-brand and elite universities (Harvard, Stanford, etc.) have now suddenly become interested in digital learning and begun to price their programs at the true efficient cost of technology while shedding or unbundling the non-essentials (the classroom, the overhead, the athletic team, etc.) that have burdened traditional higher education institutions.
Driving this market are eager edtech companies that provide value with performance-driven metrics and give top-notch graduate schools the ability to effectively compete in this new evolving online education arena.
We must credit the early disruptors — massive open online courses (MOOCs) such as Udacity, Coursera and edX — with the early redefining shift of quality from the perspective of the university to the perceptions of their consumer students. Most success in the online arena will occur at the graduate level where there is not as strong a sense of loyalty to campuses as at the undergraduate level.
Now, the federal government has an opportunity to support and subsidize a new and improved business model for higher education. Policy surrounding higher education should be based on modernization efforts to support new technologies and edtech startups if we want our education system to actually work in the digital economy.
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