Can Big Data Save Higher Education?

by Grant Sabatier on February 13, 2013 in Cultural Shift, Future of Higher Education, Technology with Comments Off
numbers

I warn you that this is a bit of a rallying cry. A wake up and start thinking creatively cry. A, you better start listening or you will be crying type of rallying cry.

We are living in the age of data, where our movements are tracked, aggregated into large data sets, and analyzed to build predictive models about how people like “us” behave, engage, and ultimately purchase. I can say quite confidently that in Higher Education – a world where ideas have been tested and validated for centuries – data  has become king. But the biggest question is, how can data save universities and ultimately help them thrive?

The once hidden institutional research departments are now at the forefront of the kingdom, where Chief Information Officers are finding correlations between earth-shattering data sets like the number of students who bought ice cream at the student center when the temperature outside was between 40 and 52 degrees. This type of insight is helping them determine how much ice cream should be ordered based on the extended 10 day forecast. But seriously, institutions now have dashboards that tell them the “what” and “how” of everyday operations. The only question is: What does all of this data really mean and how can it be used to create a better university. As participants and leaders in higher education we need to challenge ourselves to look at data in new ways in order to uncover insights that are truly new and can be used to create significant value across the enterprise.

People inside higher education tend to forget that the industry is market driven and that the people who want to purchase your product are ultimately the ones that control the growth and sustainability of your university.

So how do you understand what your market wants – what it expects of you – and where the biggest opportunities are for impact? Well you listen to your market. You not only use surveys, but you contextualize anecdotal evidence with true data sets – business, social, and market data. If properly empowered with the data that matters, university administrators can make daily decisions that are more likely to have an actual business impact. The implications string across the critical functions of your institution: recruiting, marketing, alumni management, development, faculty retention, and student satisfaction. The amount and nature of the data that can be gathered is evolving rapidly, so you have to find creative ways to cut through the clutter and you have to make some real decisions.

It doesn’t always feel good to shut down a program that started 50 years ago, or shrink your class size to maintain classroom quality, but it feels even worse to be irrelevant…There are deep insights hidden within your data and they are telling you what you should and shouldn’t do. So are you listening? How are you tracking? And more importantly, are you adapting based on what you hear?

When Colleges Close…

by Martin Van Der Werf on February 11, 2013 in Cultural Shift, Future of Higher Education with Comments Off
closed.sign

The declining financial health of higher education has gotten me thinking about some of the hardest stories I wrote in my six years as a reporter and editor at The Chronicle of Higher Education: articles about colleges that went over the financial brink and closed.

Visiting college campuses that were set to close was like visiting a terminally-ill patient who has not yet died. Everyone is moving stone-faced ahead with what needs to get done — assuring that students can transfer or graduate, that final paychecks will go out, that books and furniture will be donated or sold. All the while, the thought processes of anyone left at the college is like those of the relatives of that terminally ill patient: they keep hoping for a miracle that will reverse the fate, or at least a pinprick that wakes them from a terrible dream.

I revisit this topic now in hopes that colleges in decline can learn from those before that couldn’t reverse their downward spirals. I hope that those endangered colleges can recognize their dysfunction and make changes before it is too late.

Small colleges have much to offer, even if their total enrollment is a collective 5 percent of so of all the students attending higher education in this country. “Their very lack of pretense is what makes them attractive to some students, especially those who might be intimidated by the thought of attending a larger institution,” I wrote in my story documenting the last 14 months of Mount Senario College. “With each shutdown, the diversity of American higher education is lessened. And the future, at least in some small communities, gets a little dimmer.’

Take the examples of Mount Senario and Bradford.

Bradford College was a classic New England liberal-arts college, founded in a small town shortly after the American Revolution and content to skate by with small classes and limited ambitions until a disastrous plan to grow the college by building additional dorms in the late 1990s. (A reprint of the Chronicle story can be found here.)

Bradford had a history of shifting targets and one prominent president: education scholar Arthur Levine, who went on to become president of Teachers College at Columbia University. Levine looked back fondly at Bradford, which he led from 1982-89, but his recounting of the demands will be familiar to any small-college president:

“It was never easy. At small colleges like Bradford, having ten fewer students than expected in the fall or spring is a serious financial problem. Having thirty fewer is a disaster. Throughout the year there would be monthly reports on applications, this year versus last or the last two years. After April, there would be weekly yield reports, number of students admitted who paid deposits. After June, there would be twice-a-week meetings. Beginning in July, they were daily. Senior administrators sat with admissions and students affairs staff going over new students and current students name by name and developing strategies for each to convert them to matriculants. Have Professor X make a phone call. Have the dean of students write a note.”

Mount Senario was more of a longshot than Bradford. Mount Senario was only about 40 years old, and located in hard-bitten Ladysmith, Wis., a town of less than 4,000 people in the northern woods.

It had many challenges: a small enrollment (many years less than 500), a rural location, a rotating cast of unimpressive presidents, and a lackluster Board of Trustees who had a hard time owning up to the challenges of the colleges, much less trying to solve them. (The story is here, but a forewarning: it is behind the Chronicle paywall.) It had gotten by becoming one of the first colleges in Wisconsin to offer distance education at numerous locations around the state. But as that business faltered in the face of competition, it had little to fall back on, with out-of-date facilities, a faculty that was unequipped to properly teach all the classes they were assigned to, and a constant turnover of students.

These colleges, in their final days, had much in common: fatigue after years of hand-to-mouth existence, mutual distrust between faculty members and administrators, and an intense preoccupation on short-term issues that precluded any possibility of long-term planning.

Ann E. Martin, a professor of chemistry and biology at Mount Senario when it closed, went on to write a doctoral thesis on the reason colleges close, and concluded: “The end of a college is rarely the result of a sudden catastrophic event. Often there has been a long history of challenges and struggles, culminating in either a crisis or dead end from which no escape is possible.”

Her thesis refers to stages of decline of an organization, first identified by William Weitzel and Ellen Jonsson:

1. Blindness — a failure to recognize the problems at hand

2. Inaction — when employees recognize that something is wrong, but don’t do anything about it

3. Faulty Action — the institution takes action but the quick fix makes the situation worse

4. Crisis — the do-or-die point

5. Dissolution

This progression can be traced at any college that is failing. At most colleges in serious financial trouble, the constant cutbacks result in the deterioration of the core course offerings. Once that happens, there is nothing left. As William Bowen once said, “After you do not wash the windows once, what do you do for an encore? How do you not wash them again?”

The closure of a college is a loss not only to the immediate students, faculty and staff, it is a loss to the community, the alumni, the collective memory of everyone ever touched by the institution. Not every college can be saved, and not all will be. Some students perhaps will be served better by educators with deeper pockets. Even Mount Senario’s campus has college classes again.

What I observed at these colleges was a failure of spirit — an unwillingness by multiple people on these campuses to come together for the common good. Everyone kept their head low and their blinders firmly in place, thinking that saving the college was someone else’s job. As a professor at Bradford said in its final days: “Our inability to talk honestly is what killed this institution. What is at the core of the liberal-arts tradition is an open discourse with everyone involved. A lot of people here knew a lot of things. We were complicit with our silence.”

As financial pressure mounts on colleges, their continued health will require the collective good will, good ideas and common purpose of everyone. Saving a college is everyone’s job.

The Rise of the Machine — The Future of Higher Ed?

by Martin Van Der Werf on January 25, 2013 in Cultural Shift, Future of Higher Education, Higher Ed Models, News, Online Learning, Reports, Teaching, Technology with Comments Off
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We spend a lot of time imagining what the college of the future will look like and how it will respond to the needs of students. Two recent pieces helped fill in some aspects of the higher education picture I had not yet contemplated. Both are well worth your time. And a third article is vital reading for those in the middle of this meltdown: the faculty.

“The future looks like this: Access to college-level education will be free for everyone; the residential college campus will become largely obsolete; tens of thousands of professors will lose their jobs; the bachelor’s degree will become increasingly irrelevant; and ten years from now Harvard will enroll ten million students.”

That’s in the first paragraph of Nathan Harden’s article in The American Interest, “The End of the University as We Know It.” If you read that far, you’ve got to read the rest.

Universities are teetering on financial collapse, Harden argues. They are continuing to build for an old-school model — big buildings that will go begging for students. (He is not the only one pointing out this fallacy.) My favorite factoid in the article:

Last year Yale finalized plans to build new residential dormitories at a combined cost of $600 million. The expansion will increase the size of Yale’s undergraduate population by about 1,000. The project is so expensive that Yale could actually buy a three-bedroom home in New Haven for every new student it is bringing in and still save $100 million.

“In the future,” Harden writes, “the primary platform for higher education may be a third-party website, not the university itself. What is emerging is a global marketplace where courses from numerous universities are available on a single website. Students can pick and choose the best offerings from each school; the university simply uploads the content.”

The vision is apocalyptic for colleges, but incredibly optimistic for students. They are on the verge of access to the world’s knowledge and its best teachers — for free or at very low prices.  The Internet has a way of destroying any business that depends on selling information to make a profit, Hardin argues. He has a point — just ask anyone in the newspaper industry, or anyone who used to print maps or encyclopedias.

If all of higher education were to melt down this fast, wouldn’t most of it just disappear? The red ink would be like a lava flow, wiping out all in its path.

I would caution, “Not so fast.” People who run colleges are pretty smart. I think Harden writes very convincingly about why colleges will close — he seems not to have imagined why many will remain open.

For that, turn to the (how’s this for a grabber of a headline?) “Online Education White Paper” from University Ventures, an investment fund. Don’t let the plain vanilla look dissuade you from reading — there’s some visionary observations here.

The paper amplifies a theme in Harden’s article: the advantages of “machine-guided learning” and the unique willingness of the next generation of college students to engage with machines rather than people. The insertion of machines into the learning process, and the resulting data that will be produced, will allow higher education to deliver education as a competency-based product, rather than in classes of cohorts. Educations will be custom designed for students, and their progress will be charted and verified in ways that are not possible with human instructors in large (or small) classrooms.

The report envisions a much tighter connection between universities and employers. Businesses and universities will create a “taxonomy of capabilities” that will describe a person’s skills in far more detail than a transcript or resume can ever do. As this new approach to the job market takes hold, it will only further reinforce the shift to online learning. And that will be the future profit center for universities.

It is a decidedly unromantic view of college, devoid of socialization and learning much about oneself while preparing for a career. Is this the inevitable path that colleges will travel?

That brings me to one final recommendation. If all of the above doesn’t frighten the average faculty member out of complacency, perhaps this blog post will. A research professor writes of how she ends most of her talks with a slide that reads: “IF WE PROFS CAN BE REPLACED BY A COMPUTER SCREEN, WE SHOULD BE.”

Everything in the two aforementioned articles says that is going to happen, in one way or another. Faculty members: It is time to wake up and embrace a new vision for higher education, rather than fighting a rear-guard action to protect the shrinking turf many professors seem content to occupy: the “we can’t be measured” and “why change a model that has worked so well for 400 years?” ground.

I wrote above that colleges are run by smart people, who will find new business models. But the smartest, most creative people on campuses are their faculty member. Rather than shrinking into their offices and labs, they need to be applying their resourcefulness to imagining a new enduring model of higher education.

If the world cannot preserve some the quirkiness and self-actualization inherent in a college education, that will be a profound loss indeed.

A Vision of The College of 2020

by Grant Sabatier on January 12, 2013 in Cultural Shift, Future of Higher Education, Higher Ed Models, Students, Teaching, Technology with Comments Off
future

At the College of 2020 we spend a lot time blogging about what the future of higher education will look like – now I want to try to help you envision one potential view of the it. This is 2020 – while only 8 years from now, I believe the higher education landscape will look drastically different – primarily because of online content and mobile devices.

I believe that a majority of higher education students will take at least 80% of all of their classes online or in some online dominant hybrid format. The tablet will be the dominant learning platform and will contain all dynamic course content and will allow students to attend classes, online study groups, and parse through libraries with millions of volumes. Institutions will be defined by their apps and the way they structure content for mobile devices.

The tablet will also support global learning and allow students all over the world to participate in the same classes. Will there be degrees? Of course, but they will look strikingly different. Degrees will be based on accumulated points (much like credits), but students will be able to get them from accredited networks of institutions – the points will come from a large extended network of university partnerships. All students will still have a “parent” institution that they pay tuition to as well as associate with, but supplemental course content will be licensed from other institutions freely.

There will also be a content marketplace – much like an iTunes, and a vast majority of institutions will sell their own content to both individuals and other institutions. Institutions will focus on subject niches and will have less internal competencies around fewer focus areas that aren’t directly related to their core research. The best content will rise to the top and be purchased from other institutions. Then the “parent” institution will structure the content into programs. Both institutions and faculty will become content aggregators and conversation facilitators, but will do far less content creation.

The college cost debate will become increasingly focused on the value and outcome of the institution’s degrees – with more of the focus on actual performance metrics linked between specific programs and related industries. Degree and programs will continue to evolve to be more industry and career focused, even in the liberal arts. As consumers get more and more discerning they will be expecting a clear ROI for their investment before they even start. This will hit some institutions very hard, like small private liberal arts colleges that don’t have a strong brand name and very few performance metrics. The students that would have once chosen smaller private institutions will instead join larger extended online campus networks that are tied to larger institutional brands with a value priced product.

Be open.

What Can Higher Ed Learn from Healthcare Reform?

by Martin Van Der Werf on January 8, 2013 in Cultural Shift, Future of Higher Education, Higher Ed Models with Comments Off
highered.healthcare

I am thinking of an industry that performs a vital public service with unlimited demand. But it is marked by cost increases that far outstrip inflation, extreme specialization, and a lack of coordination.

Sounds familiar, right?

But I am thinking of healthcare, not higher education.

In many respects, reform of healthcare and higher education are proceeding on parallel tracks. Both are immense industries, with core products that are essential to well-being, heavily subsidized by the public, and entrapped by outdated business models.

There is a striking difference: While higher education still seems just short of its Day or Reckoning, healthcare had its crisis of cash and conscience a few years ago. Healthcare, therefore, is several years ahead in reform, speeded, of course, by the passage of Health Care and Education Reconciliation Act of 2010 (see how often those terms get paired!)

The ways in which healthcare reform has developed could, therefore, be a template, of sorts, for the reform of higher ed. Listen, for example, to the clarion calls for a presidential commission on the future of higher education, kind of like Obamacare for colleges.

A lot of the reforms in healthcare are the subject of intense study. This, among other reports, nicely sums up many of the issues. These studies serve as good jumping off point to ponder:

1. What can colleges and universities learn from healthcare reform?

2. Are some of the pilot projects and new ways of doing business that hospitals and healthcare systems are trying illustrative of possible solutions to the conundrums that higher education is facing?

Here are five of the defining pathways of healthcare reform and how they might relate to higher education:

  • Outcome-based solutions rather than fee-for-service. The biggest cost driver in healthcare has been the model most of us have known forever: every doctor does what is needed for a patient, then passes the patient on to another doctor (usually a specialist), where the whole process starts all over again. Multiple blood tests, multiple x-rays, multiple filling out of paperwork. Each doctor is able to extract the maximum fees; the system discourages cooperation. Now accountable-care-organizations are driving doctors to work as teams to resolve the needs of each particular patient, while being held accountable for the quality of care to the patient and whoever is paying the bill (such as Medicare or insurance companies).

How does this apply to higher ed? The comparison to how colleges operate is spot-on. Most colleges exist in in a bubble, repeating the same procedures and buying the same expensive equipment as the competitor right up the street rather than cooperating with that competitor. Credits don’t often transfer, core courses (like blood tests or x-rays) need to be repeated. Each student has to fit into the system of the university — with classes only offered at certain times and locations and certain required credits, for example — rather than a college, or several colleges, pooling resources to arrive at programs or classes that best serve the needs of the students. If administrators and instructors formed the equivalent of “accountable care organizations,” it would change the way universities approach education.

  • An emphasis on patient experience. You may not have felt this way on your most recent visit to your primary-care physician, but hospitals and healthcare plans are increasingly placing value on customer service. The philosophy is that patients who are treated well and given good follow-up care won’t be so intimidated by the healthcare complex, and seek out treatment early rather than waiting until their symptoms have multiplied and worsened and become, therefore, much more expensive.

How does this apply to higher ed? College students are typically assigned an advisor or  counselor. But how proactive are they? After all, a student who never asks a faculty advisor for anything is time saved for that faculty member.

Amidst this inattention, how many students flounder through changes in majors, dropped classes, and crises in confidence? The student might not know where to get help or be too intimidated or embarrassed to ask for it. All the while, that student is piling up debt. If systems were in place to identify those students and give them deep personal attention, it would show that the university cares about their well-being and wants to guide them ethically through their options.

  • Put more practitioners into management. Hospitals are always seeking doctors who are willing to learn the pressures and realities of the economics of healthcare. They find very few takers. Among other reasons, a doctor with knowledge of both the finances of a hospital and the realities of patient care could be a bridge between the two groups, and help find compromise. The lack of aspiration to management, and a refusal to consider the perspective of management only allows bad feelings to fester.

How does this apply to higher ed? We have written about this before. Many universities are caught in an us vs. them showdown between administrators and faculty members that must be resolved if many campuses are to make real progress in taming the financial challenges that they face. There are few bridges across this chasm because former faculty members who have joined the administration are seen as sell-outs. This is a difficult problem to manage, but university leaders must realize that faculty members who can speak to both sides of this debate and retain their integrity are a rare commodity. They should be nourished.

  • Making more data-based decisions. The growing prevalence of electronic medical records and the gathering and crunching of the data they produce has allowed doctors to identify trends and similarities among disparate patient groups that couldn’t have been seen before. This has helped in making correct decisions on treatment of patients as well as in saving money by identifying inefficiencies..

How does this apply to higher ed? Most universities teach efficiency but don’t practice it. They insist that education is not a commodity and cannot be treated like one. Yes, there is truth in that. But universities are large operations, and they have missed opportunities to identify preferences, tendencies and needs that can be found in data.

Interestingly, the university departments with the most important impact on the bottom line — admissions, financial aid, and development — are striking exceptions to the usual way of doing business on campuses. All are highly sophisticated and data-driven. Admissions departments have become increasingly adept at identifying students that are likely to attend their institution, and zeroing in on the factors or enticements needed to get that student in the door. Financial-aid departments have developed algorithms to help them determine exactly how much aid to offer a student to maximize the chance of matriculation while also guaranteeing the highest possible revenue. Likewise, colleges and universities are among the most successful fundraisers in the world, using highly-specialized technology for keeping track of potential givers and to understand their tendencies to give and how much they can afford to donate.

If that level of data-based operation is possible in one area of a university, why not in others? Universities could be using data to understand the best approach to teaching students, preferred formats (online or in person), and times to offer classes, among other things. The “business” departments, such as facilities, purchasing and residential life, could be combining forces to get better deals from vendors and a deeper understanding of how they need to change their operations to be more efficient and to please their customers. That is not to say that none of this is occurring now, but more advances in efficiency are certainly possible.

  • We have enough specialists — we need more primary-care physicians. When you hear about the doctor shortage, experts are really referring to a shortage of general practitioners or internal-medicine doctors. Most medical students — nearly 80 percent — prefer to be specialists, lured by better pay and working conditions. Who wants to spend all their time haggling with insurance companies, as many general-practice doctors do? As a result, the medical establishment is looking for ways to push more medical students into general practice, including guaranteed hours and bonuses for producing positive outcomes in patients.

It is indeed a time of deep soul-searching for young doctors. After spending years and tens of thousands of dollars on undergraduate education, medical school, internships and residencies, a growing number of young doctors report that they regret their choice of profession. As this forum shows, many worry about paying off their debt and whether there will be need for specialists in the future. But doctors are also showing a growing acceptance of their new reality — a system that had lost all cost controls and had to be hemmed in by federal legislation. It is not going back to the free-for-all that it was. And even with more cost containment, the average starting salary for a family-practice physician is about $189,000, still one of the highest-paying livings out there.

How does this apply to higher ed? The analog is pretty simple: Being a college professor is still one of the best (and more remunerative) occupations out there. It is a position of trust in a fulcrum of constant change. But, like the job of a doctor, it is changing forever.

Professors, by definition, are experts in their field. To ever become a professor, a person, of course, needs to devote years of study to a given topic. But can that system last? We would guess No. Universities simply are not going to be able to maintain departments of every subject under the sun, when the same departments exist at dozens, perhaps hundreds, of either neighboring or peer institutions. The economics of such repetition cannot make sense indefinitely.

It is, and it should be, a time of soul-searching for university professors as well. Rather than needing so many specialists in so many disparate fields, what a lot of universities need right now — and will need more of in the future — are just plain old good teachers, people with expansive minds who can draw parallels between unrelated topics and help the world make sense to young people just beginning to discover themselves.

Professors will still enter the academy as experts in a certain discipline, but those who are thinking productively about the future will care less about their specialty than what they can demonstrate about learning. The university of the future will not just be the School of Education, Business, Nursing, Communications, Liberal Arts, etc., all divided by different styles, requirements, and internal politics. The university of the future will be a community of learners taking in stimuli from all the professional courses of study and ordering it in a way that makes sense. At the center of that will be professors learned in one discipline but open to others, combining topics with other like-minded instructors in ways we are only beginning to unravel. That professor will be a general practitioner of the most essential function of the university: teaching.

 

The Future of Higher Education Infographic

by collegeof2020 on December 7, 2012 in Uncategorized with Comments Off

We Need More Truth Telling in Higher Education

by Martin Van Der Werf on November 8, 2012 in Cultural Shift, Future of Higher Education, Uncategorized with Comments Off
truth

A lot is being written about the future of higher education, but truth-telling about the current state of colleges and universities is still in short supply. So a book-length gathering of papers caught my attention — for the breathless way it skewered current practices. Here are some outtakes:

Rather than embracing innovations that have swept over the rest of the economy, boosting productivity, lowering prices, and improving quality, most colleges and universities have chosen to batten down the hatches, raise tuition, and hope for the best.

Many facets of the governance structure push higher education toward higher costs, minimal transparency about outcomes, and a low level of quality control.

Established colleges are often ineffective and always inefficient.

For colleges and universities to make real lasting change, they must first be able to look at themselves, and recognize what they are doing wrong. I get the feeling a lot of colleges are still just waiting for the economy to improve and thinking all will be better when it does. They are wrong.

The papers were prepared for a little-noticed event held in August by the American Enterprise Institute. The conference was titled Stretching the Higher Education Dollar, but it reads more like a general diagnosis of most of the ills afflicting higher education, not the least of which is myopia. Which is why, when read together, the collection is so bracing.

If you are trying to bring together all of the stakeholders on your campus to study your current state and the future of higher education, assigning everyone to study these papers might be a good place to start.

The papers are being collected to be published as a book — most of these chapters are at least 30 pages. So in the interest of saving you time, here are some of the topics covered and the highlights of what is said (I think these quotes give a sense of the strength of the arguments):

The need to reform accreditation — “Like with the postal service, the arrival of new and cheaper options allows students/customers to differentiate themselves by type and by need. Institutions negatively affected by such differentiation are raising prices while reducing services— the business model death spiral.” (For our view of this issue, see here and here.)

Emphasizing the college with the best “fit” – “The annual tuition lost on students who fail to persist is offset by many institutions using price increases on new and continuing students. The bottom line is that the students who stay end up paying for the students who drop out and, at public institutions, society at large foots the bill.” (our view)

The need for innovation NOW – “Aside from the elite institutions and flagship research universities (and really, Stanford, Harvard, MIT, and the University of Virginia do not have to spend a moment worrying about online education as a threat, no matter the pronouncements of their leaders), the great majority of colleges and universities stand to be disrupted. … It is easier if the institution is lower down the status ladder. Institutions that enjoy high status within the industry (or in their own minds) tend to resist innovations that are admittedly inferior at their start (as was early online education), fail to accept the improvements, and overestimate the security of their position.” (our view)

The promise of online learning – “Almost one in three college students is taking at least one online class, according to the Sloan Consortium. Whether through hybrid classes, fully online degrees, mass-access ventures, adaptive learning modules, or as-yet-invented technologies, it seems hard to believe that this phenomenon will not continue to spread.”

“What we now know with certainty is that well-designed online education provides improved learning, better service to students, greater access to programs and resources, and improved economics to the provider institutions. … The standardized course design allows us to effectively use adjunct faculty at $2,500 to $3,500 per course versus a FT faculty cost of $16,571.” (our view)

Inflated price tags — “In higher education this is known as the Chivas Regal effect. … The association of price with quality leads to a particularly perverse incentive: the more a college or university spends per student, the more consumers associate that institution with higher quality. … A corollary to the Chivas Regal effect is any attempt by a single competitor to lower cost will be interpreted as an attempt to lower quality.” (our view)

Broken governance — “This model is popularly known as ‘shared governance.’ Unfortunately, it has been undone by administrators, who simultaneously convinced boards that faculty will not tolerate intrusion into academic policy and faculty that boards will not tolerate faculty meddling in their jurisdiction. As it stands now, shared governance is fragmented governance.” (our view)

And lastly Administrative bloat (these figures are mind-blowing!)– “To give you an idea of just how deep the organization was at Berkeley, in one level of management that was four steps below the chancellor, there were 525 supervisors earning $57.6 million in salary and benefits. This dense layer of management created significant bureaucracy and often paralyzed the organization by tying up key resources in endless meetings. … Non-academic employees were reviewed using a five-point performance ranking system (1-2—below expectations; 3—meets expectations; and 4-5—above expectations). Of the 13,000 employees in the system, only seven received a 1 or 2 rating.

Taken as a whole, these papers present a bleak portrait of higher education, one that is likely to be kicked aside unless it wises up.

As one paper says, “We should promote new ventures to lead the way with disruptive innovation. As they become successful, the establishment can either follow along or perish.”

The Industrialization of Education: Guest Post by Bill Sams

by collegeof2020 on October 30, 2012 in Cultural Shift, Future of Higher Education, Higher Ed Models, Online Learning, Students, Technology with Comments Off
factory.college.of.2020

(This post is by Bill Sams, a Commissioner on the eTech Ohio Commission and an Executive in Residence at Ohio University. Bill has written and spoken on the transformation of education for several years and recently has produced two videos on the subject: EPIC 2020 and 2012, The Tipping Point.)

Certainly in the United States a case can be made that the traditional education system at both the public school and higher education levels is a failure. With the United States ranked outside the Top 20 among developed nations on international math and science tests, inner city and rural schools consistently ranking below their suburban counterparts, and student debt passing $1 trillion, the system is failing on many fronts. For years educators have maintained with pride that they are not an industry. Today, rather than a statement of pride, that concept is now a statement of the problem.

The productivity of education has barely changed in a hundred years while American industry has seen major leaps in productivity. Information technology has been the poster child of productivity operating under Moore’s law where product capability is doubled every two years. Education, which at its core is an information provider, has been unique in its lack of adoption of technology that improves productivity. In far too many universities the concept of productivity is to put more students into a classroom. This is very much akin to a person in a foreign country who does not speak the local language speaking slower and louder in an effort to gain understanding.

Productivity is not achieved by doing more of the same thing with fewer resources. That is called lowering the quality while raising the price. Productivity is a process of doing things differently that provides better results, faster and cheaper. The Khan Academy — with a faculty of one — is teaching 4 million students a month incredibly well for free. That is productivity.

Faculty fervently resist the characterization of students (people you do something to) as customers (people you do something for). The concept of Henry Ford that people could have any color of car they wanted — as long as it was black — is alive and well in academia.

Beginning in early 2012 consumers and customers of learning are being offered industry-based alternatives to the failing traditional system. Major universities such as Stanford (Udacity, Coursera), MIT and Harvard (edX) are establishing well-funded educational organizations apart from faculty control that are customer-centric with new industry-based revenue models that make the concept of tuition obsolete. The new revenue models could include fees from employment agencies, advertising, corporate sponsorships and volume discounts. These universities are inventing ways to deliver to the learning consumer courses that are provided by world-class faculty, anytime, anyplace, with no prerequisites and for free.

Additionally, these new online Internet-based education start-ups are applying well-understood industry practices of total-quality-management to improve their courses. By providing learning services to hundreds of thousands of consumers simultaneously and analyzing what works and what does not, their annual improvement in efficiency and effectiveness can be expected to be more in line with Moore’s law. The traditional university system, which takes three years to a decade to change, cannot possibly respond to this level of innovation.

Employers have long complained that university graduates are not prepared for the workforce. A liberal arts degree from 1912 is not very different from a liberal arts degree in 2012 with the exception of the abandonment of Latin. Yet the workplace has dramatically changed with not only the content knowledge that is needed but also the soft skills that are emphasized, such as collaboration and high performance teamwork.

The open source badges project being developed by Mozilla offers a meaningful alternative to the outdated concept of degrees. Badges have the potential to define a wide range of skills. As job demands change, badge requirements can quickly adjust, thus providing current and potential employees with clear market signals of what they need to learn to stay current and competitive. This contrasts dramatically with the rarified process of a university curriculum committee and its member’s conflicts of self-interest to expand their own specialties.

The traditional education system is a seriously flawed model that is incapable of being fixed due to all the vested interests that currently benefit from and control the system. It is time for a new customer-centric industry-based model to bring the efficiencies and effectiveness of an industrial approach to education. 2012 will be viewed as the tipping point in the transformation of education from a limited and expensive local craft to a universally-available global commodity.

This industrialization of education will have a negative impact on those in the traditional education system just like the transformational changes that took place with integrated steel factories, print news, the post office, and companies like Blockbuster and Borders. But the transformational changes in education will have a global impact on improving the human capital of the world that make the positives of this movement almost unimaginable. Our efforts should not be spent in mourning, protecting or continuing the traditional system but rather in accelerating and improving the transformational changes of the future. People in a well-educated world will have the capacity to solve many of the major global problems that exist today.

The Perpetual Half-Price Sale on College Tuition

by Martin Van Der Werf on October 4, 2012 in Future of Higher Education, Higher Ed Models, Students with Comments Off
Screen Shot 2012-10-04 at 12.02.18 PM

The number of issues bedevilling colleges right now is staggering. But if we were to trace the issue where higher education lost the support of the public, it would be tuition. Think about all the conversations you have about college — don’t most of them begin with price? Who can afford college? Why has it gotten so expensive? How will I ever save enough to send my kids to college? “It’s outrageous these institutions have the audacity to charge so much for tuition and give so little to the city.”

It seems that if colleges wanted to win back some public support, they might want to start with tuition. Many colleges would argue that it isn’t possible and articles have shown that at some colleges, the tuition price doesn’t even cover the cost of the education. But I don’t think colleges can win this argument. To see why, look at these charts — they show the sticker price and the net tuition collected by public universities, and private colleges and universities, respectively:

Source: College Board

Why are these charts so important? Because they show that while colleges have been jacking up prices at rates far exceeding inflation, the net proceeds have barely inched up.

In short, tuition is a shell game. Stephen Trachtenberg, who recently stepped down at as president at George Washington University, said he deliberately made it the most expensive university in the nation because “People equate price with the value of their education.” Every year that colleges have hiked tuitions, they have also increased the average discount they give to each student. The most recent survey showed the average discount for freshmen was 42.8 percent, the highest ever. And the average discount for all undergraduates is 37.2 percent, another record. At the current rate of increase the average discount will reach 50 percent soon, and college truly will be half-price.

Almost no one pays full price for college. So why do colleges keep attaching a sticker price that is alienating to so much of the public and politicians, and killing the dreams of young people?

A number of colleges, like Concordia-St. Paul have recently dropped their sticker price to more closely reflect the reality of what they are collecting in net tuition. But most of the colleges that have done so are small regional liberal-arts colleges that don’t have the influence to change the direction of the market leaders.

Meanwhile, Grinnell College, the fifth wealthiest national liberal arts college, recently surprised many by announcing that its current financial trajectory is unsustainable. Grinnell’s tuition-discount rate is a staggering 60 percent, and its own analysis predicts that the discount will increase to 70 percent within a decade.

Step back and think about that for a moment. Grinnell’s tuition for U.S. students this year is $41,004. But at a discount of 60 percent, it is actually only collecting about $16,401 per student. What other business could possibly ask for so much and collect so little, and stay in business?

Grinnell happens to have a $1.4 billion endowment, much larger than almost any college of its size. So it can afford this approach much more readily than other colleges and universities. But even a nest egg that large can’t last forever.

Here’s what we are left with: most colleges are in a perpetual half-price sale, but they say they can’t do anything about it because if they were to cut their price, they would no longer be competitive. Not only is the high-tuition, high discount approach a broken business model, it is a cruel and unnecessary business model.

Here’s why:

  • And the colleges with the highest default rates, for-profit institutions, would not be able to charge as much either. They typically charge just a little less than their traditional counterparts, and since they don’t typically have any institutional aid to offer, their students must tap the loan market to pay their tuition. These students usually have lesser financial means than students in traditional higher ed– thus the higher default rate.

We can’t just decree that all colleges cut their tuition rates by one-third. We need to let colleges continue to compete. But essentially colleges are already treating their tuition as a myth. The business models of colleges are not built on sticker price — they are built on net tuition. As the graphics above show, most colleges could cut tuition by at least a third, and not damage their bottom lines one iota.

Wouldn’t that be a starting place for colleges to begin to build some good will with the public? Wouldn’t it begin to make college seem more attainable again? And isn’t that a better competitive place to be in for most colleges than straining to explain to angry customers why the laws of economics simply don’t exist when it comes to college tuition?

Cost-cutting: Who Will Tell the Faculty?

by Martin Van Der Werf on August 27, 2012 in Faculty, Future of Higher Education, Higher Ed Models, Teaching with No comments
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A few weeks ago, at the annual meeting of the National Association of College and University Business Officers, there were numerous presentations by universities about cutting costs, paring back administrative bloat, and how to plan communications strategies for assuring that everyone understands why cost-cutting is needed.

“Is the faculty involved?” was a recurring question.

In most cases, administrators dissembled, and said they were working their way up to bringing in the faculty.

It is no surprise that administrators don’t want to tackle the “faculty issue.” What is their leverage when tenured faculty has more job security than they do? And, when the faculty has an equal role in the shared governance structure that rules most institutions? But it has to happen.

About 62 percent of all spending at public research universities goes to instructional costs, a category that includes faculty salary and benefits and administration of academic departments. Large universities are realizing significant cost savings by such actions as centralizing vendor contracts, using space more efficiently, and eliminating layers of bureaucracy. But even at the largest and most ambitious of universities, the savings might total $50 million. That would be equal to a 2.5 percent cut for a university with a $2 billion budget. In addition, many of the savings can only be realized one time, or the savings in subsequent years are much smaller than in the first year.

Meanwhile, state support for public higher education dropped 7.6 percent in the 2011 fiscal year. State support is a major, albeit dwindling, component of funding for public research universities.

It doesn’t add up. Saying you can balance a university budget without touching instructional costs is like saying you can balance the federal budget without touching national defense, Social Security and Medicare.

It is understandable that academic leaders don’t even want to entertain the discussion about cost savings at their universities. Most faculty members simply want to be left alone so they can pursue their teaching and research. Just by entering into the talks, faculty members are concerned that they will be perceived as giving ground.

But the security and job satisfaction that the professoriate has long enjoyed is lessening. More than half of public college and university classes are now taught by adjuncts. Professors who have retreated to research are finding research budgets cut, and competition for grants steeper than ever. More academics (like this one) are explaining that given the outlook for higher ed, they would rather take their chances in the private sector.

But the stakes couldn’t be higher for everyone involved. Faculty members must understand that if more colleges close their doors, there will be fewer academic jobs to go around. Yes, administrative bloat has been unchecked at many institutions, but that argument between who has been more wasteful — administrators or faculty — has no winner.

Most universities have not created models for paring faculty ranks (other than the occasional early-retirement package). But the conversation must be built on mutual trust and a shared goal: the more money a university saves in overhead, the more it can devote to teaching and research. Creative minds can find creative solutions.

Universities committed to change must involve faculty members at the outset of any discussions. Begin with finding potential allies in the faculty to start the conversation, and spread it from there. This won’t be an easy discussion, but it will get harder the longer it is delayed.

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