All posts tagged student debt

The Industrialization of Education: Guest Post by Bill Sams

(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.


When Will For-Profit Colleges Ever Shape Up?


The advance of MOOCs into mainstream higher education has a lot of people wondering if giving away content for free will be the death of traditional higher ed. But the increasing popularity of online courses got me thinking about another troubled part of higher education: for-profit universities, the players that popularized the online course in the first place.

The for-profit universities have fought staggering odds to make important inroads against the higher ed establishment. The pioneer, the University of Phoenix, proved that there was a sizable population of adult students hungry for its brand of night and weekend classes in rented buildings. It was ignored by traditional universities and colleges, which were convinced it was little more than a fad. With the rise of the Web, Phoenix and its for-profit brethren took advantage of the growing technology, drawing students to online classes. Traditional higher ed shrugged, arguing that only face-to-face education was valuable, and shunning all substitutes.

As more students saw value in the new online learning, and demanded online classes from the establishment, some begrudgingly began to offer them.

The for profit universities now command as much as 13 percent of the market share. Ten years ago, that proportion was closer to 3 percent. The higher ed establishment should probably be giving credit where credit is due — the innovative teaching styles, class offerings, and methods of reaching students of the for-profits have redefined higher education. Instead, the for-profit universities continue to get no respect. And that is because the entire industry is tarred by its bad actors, colleges that see an opportunity to make a quick buck, all too often at the expense of taxpayers.

To wit, Virginia College, which raked in $293 million in federal loans in one year, is being sued by former students who say some were steered into programs that were more costly than what they needed and then they ended up with worthless degrees. The National Bureau of Economics released a paper saying there is no monetary advantage to gaining a certificate or degree from a for-profit college. Ashford University, with some 90,000 students, is at risk of losing its accreditation, primarily for not spending enough on instruction but plowing resources into getting new students. Federal student loans make up 85 percent of its revenues. Studies show that for-profit college students are the most likely to end up in debt. A marketing company for for-profit colleges paid a $2.5 million fine to settle allegations that it deceived veterans into thinking that certain for-profit colleges were the only places they could use their educational benefits. These are headlines from just so far in 2012. The parade of stories featuring unscrupulous money-grubbing for-profit colleges and associated companies is never ending.

One wonders after a while why the more status-conscious more respectable for-profit colleges never do anything about it.

The for-profit universities have proven that they are going to be around for the long haul, that they have a rightful place in the diversity of college options available to Americans. So they have several options for solidifying their place in that world. They can go on chasing taxpayer guaranteed loans and GI bill money, and getting roasted at the national spit on regular occasion like some kind of payday loan provider.

Or they could try something completely different and long-lasting: a code of conduct and policing of the actions of all.

The industry will never be able to discover all the malicious providers before they steal another wallet. But it would certainly make a difference in the public’s eye — and that of the rest of higher education — if it at least looked like it was trying.