(Guest Post by Matthew Ladner)
Ed Sector’s Kevin Carey’s article on the technological transformation of American higher education is a must read. Carey’s article leaves much to discuss, but a bottom line conclusion is that computer based learning at traditional universities is improving instruction, lowering costs and moving us in the direction of outcome based assessment- all very positive developments.
The other story however is that many universities are pocketing the efficiency savings and jacking up tuition, making undergraduates even bigger cash cows than they used to be. Higher education is on an unsustainable path, and yet Carey writes:
Long-prosperous colleges risk finding themselves in the perilous state of the newspaper, with competitors using the Internet to drive down prices in businesses that were once profit leaders. That would be a mixed blessing, at best. The Web is a boon for those who need to access higher education at a distance. For colleges that have grown complacent and inefficient—and there are many—a dose of fiscal reality would do them good. But the financial cross-subsidization at the heart of the modern university also sustains much of what makes it a uniquely valuable institution, more than a mere conveyer of credits and degrees. Much as newspapers use classified advertising to support money-losing foreign bureaus, subsidized scholarship makes huge contributions to the scientific, cultural, and civic lives of the nation. The University of Phoenix does not.
Carey is of course correct about the huge contributions of university academic departments which cannot financially sustain themselves. I suspect however that the costs of many such departments are far greater than their benefits. It’s not a stretch, for example, to view, say, a Sociology department with a large number of faculty and few students as a group of self-indulgent rent seekers whose dead-weight cost helps drive up tuition and wastes taxpayer money. Mind you, there has been some great work done by sociologists, but there seems to be much more taxing of plumbers to subsidize coffee house revolutionaries going on.
Not just to pick on the Sociologists, when I was a Political Science graduate student in Texas, my fellow graduate students and I once counted up the number of Ph.D. programs in political science in the state. We wondered “do we really need so many?” The answer was obvious: no, hell no.
I think Carey’s use of the newspaper analogy is an apt one- it just hasn’t happened yet. A little Schumpeterian creative destruction in higher education seems long overdue.
Jay P. Greene's Blog 
Matthew:
It’s too easy and simplistic to make the claim that online education delivery allows universities to “jack up tuition.” Your comment leaves the impression that distance ed programs make money hand over fist for institutions.
It is true that distance education can be an income stream, but it’s certainly no golden goose as you seem to imply. The costs of high-quality online delivery programs are surprisingly high – closer to bricks-and-mortar programs than many educators realize.
Having produced business plans for distance education programs for a number of universities, I can tell you that many administrators are surprised by the investment required for online education and support.
Hi Bob,
I think Matt’s point was that universities were jacking up tuition despite finding methods that should reduce their costs.
I fear that the inefficiency in higher ed would make K-12 look like kid stuff, which I guess it is. And unlike Matt I don’t see a reckoning anytime soon, for K-12 or for higher ed. As long as taxing power still exists, the gravy train isn’t likely to be stopped. And I’m glad I’m aboard. : )
Bob-
One of the themes of Carey’s piece is that even if traditional higher ed institutions capture efficiency gains, that they have no intention of passing them on to students in the form of lower tuition, or even a slower rate of increase. Given that higher education cost inflation has been outpacing health care inflation, it is an assertion that rings true to me.
[…] The Way of the Future in Higher Education December 1st, 2008 […]
The University of Oklahoma funds a Women’s Studies professor who researches “Chicana lesbian food culture in fiction literature.”
I’m not kidding.
They also have cafeteria menus and campus maps that are actually flat screen televisions…but that is another story.