Wednesday, May 09, 2012


The Right Questions

Yesterday’s post about adjuncts on food stamps had as its subtext a sense that the current economic models for higher ed are unsustainable.  To my mind, the right questions are not “how do we restore a Golden Age?” or “how do we create hundreds of thousands of new faculty positions without raising tuition?”  Those simply aren’t going to happen.  The right questions involve finding new economic models for higher education that could actually survive.

That’s why I’m glad to see some folks starting to innovate, even if I’m not entirely sold on what they’ve developed so far.

Ameritas College, for example, is blending the for-profit and non-profit models in ways that sound interesting, if complex.  Community colleges have done versions of that for a long time, of course; many of them, mine included, have profit-making non-credit programs that subsidize the losses on the credit-bearing side.  But the Ameritas model sounds different.  From a fairly abstract IHE account, Ameritas is part of Brandman University, which itself is part of Chapman University.  Ameritas is partnering with a for-profit venture to establish a for-profit subsidiary that will run all of the non-academic parts of the operation on a for-profit basis.

The whole arrangement strikes me as too clever by half, and prone to the kinds of temptations that tend to break down so-called “Chinese walls.”  I understand how you might run, say, the cafeteria or the bookstore on a for-profit basis, but I don’t know how that would work with, say, HR.  If the profits from the subsidiary are sent over to the non-profit side in the form of subsidy, then I don’t see the rate of return for the investors; if they aren’t, I don’t see how this helps the non-profit side sustain itself.  

The article suggests that this is a complicated work-around to the recent changes by regional accreditors that make it harder for for-profits to just buy struggling non-profits’ accreditations like taxi medallions.  If that’s all it is, I’d expect to see the investors slowly slink away over time, as the deadweight cost of the workarounds dampens the returns they earn relative to other things.  

But this may also be the first iteration of something much more interesting, almost despite itself.

The partnership between StraighterLine, the Saylor Foundation, George Mason University, and Northern Virginia Community College hit me similarly.  It sounds a little like the “Efficient Degree Organizations” I wrote about as a mere baby blogger back in 2005.  In essence, students will be able to take online courses for free, then get cheap credentials through a central organization.  The credits could even eventually be transcripted by existing colleges and universities.

Here, too, the flaw is clear; the clearinghouse is essentially parasitic on existing institutions. (The same could be said of HMO’s, actually.)  But there’s no reason that would always have to be true.  It’s a start, and it’s a start I could see morphing over time into something far more interesting if the right people got involved and took it seriously.

Whether either of these particular models catches on or flames out, of course, is mostly beside the point.  The point is that we’re starting to see a critical mass of people with resources asking the right questions.  The answers, presumably, will take a bit longer.

I thought the highlight was how part of the profits from this non-/for-profit hybrid are going to the University of Texas, via its endowment management company. What a clever way to get a public R1 into the for-profit education business!

I'll observe that some hybrids are pretty common, and growing. Do you run your e-mail system, or contract it out to a for-profit company like we do? Do you run a CMS on your own hardware, or contract it out to a for-profit firm? Do students work problems that are graded by your faculty, or do they pay an extra fee to a for-profit firm to grade them electronically?

Finally, this plan is a bit more sophisticated than something thought up by the Underpants Gnomes. The "relatively low-cost" CC classes are $360 per credit in a state where CC tuition has now doubled to $46 per credit.
You're right to bring up asking the right questions. I've recently seen articles asking questions like "Does college still have value? or "Should college education be more academic or vocational?". The answers to these questions are yes (putting a bunch of people in a nice setting to talk about subjects they're interested in is always valuable) and it shouldn't and doesn't matter. And we're done.

Now we should ask the right questions, like the one you bring up: What are economically sustainable higher education systems? How can be increase benefits and reduces costs in a realistic way? Schools aren't typically known for innovation as they're almost by definition a conservative institution, but these are interesting times. I hope more educators and other individuals start looking for good answers to these questions.
I think we should pull money out of higher ed and put it into K-12 education. Find a way to make a HS diploma signify that you're literate, numerate, and hard working enough for basic clerical work.

Right now we have a system where a HS diploma means squat, a BA/BS in a non-professional field means you can do basic clerical work and a MS/MBA is required to impress anyone.

My solution? Better K-12
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