Maney: The Internet May Be the Key to Managing Runaway College Costs
The rampant inflation in the cost of U.S. higher education since 1980 makes gasoline and healthcare price hikes over the same period look like an Indy car racing a pair of old-school Volkswagen vans. But disruptive forces unleashed by the Internet and the flood of information it brings with it may herald the beginning of real competitive checks and balances against the crushing costs of college.
Just how hard Americans have been pounded by college costs is difficult to determine, as data from the College Board, the National Center for Education Statistics and other organizations is neither standardized nor particularly transparent. But nearly all sources point to college costs (tuition, fees, and room and board) that have increased between 400% and 600% percent over the past three decades – an astonishing three to four times faster than the overall consumer price index during the same time period.
Most big-name state universities (like Penn State, University of Illinois, University of Colorado, University of North Carolina) will cost parents between $20,000 and $25,000 per year. Private colleges and universities range from $30,000 to more than $60,000 per year. Given ongoing high inflation rates – more than 8% in 2010 at public institutions – it’s safe to say there’s almost no way a student can spend less than $100,000 for a four year degree. Sending a student to an elite institution can easily cost parents more than a quarter million dollars and/or burden that student with a debt load that can severely restrict their future career choices.
But the fundamental idea of college – the transfer of the collected knowledge of mankind to the next generation, along with a set of skills to enable the student to build on and process that knowledge – can increasingly be accomplished in ways other than through the physical collection of students in a room with a wise man/woman at the front. And the still-expanding power of social media platforms may prove the equal of the college dormitory as a mechanism for helping young people open and expand their interpersonal horizons.
A few cutting-edge initiatives have been launched by innovative players from the higher education world itself, while others are emanating from Silicon Valley and from non-profit foundations and think tanks. The Massachusetts Institute of Technology has been the most aggressive existing institutional player, first creating the MIT Open Coursewareprogram, which put almost all of its course materials – notes, videos, and exams – on the Web for free public review. More recently it has launched the fascinating MITx , an online learning platform that will begin issuing “certificates” rather than diplomas for a fee – but at a fraction of the full $50,000 a year cost of attending the university.
The Mozilla Foundation-- the nonprofit, open source web and software development organization -- has also launched an aggressive program to create digital badging and credentialing platforms for tracking learning achievement and skills acquisition in both classroom and non-classroom settings. The idea mimics the military's system of badges, which among other things allow one member of the military to size up another quickly and visually. In the Armed Forces, badges may be awarded for training courses successfully completed, military actions participated in by the wearer, and for particular achievements or notable accomplishments (such as battlefield valor or injury).
The digital badging systems being developed are designed to recognize that learning in an information- enabled world occurs constantly -- and more and more often -- outside formal classroom and laboratory settings. There's not much granularity in a college degree listing a resume; a badging system displaying what someone has learned (and where and how) could, if the standards for badge creation and issuance are standardized and held high enough, become a new “people’s currency” in the educational realm.
Mozilla teamed up with the MacArthur Foundation (the “genius grant” people) last year to offer a competition for organizations that could develop the best digital badging systems. Winning entries came from the likes of NASA, Disney, and Intel, but also from 4-H, the National Manufacturing Institute, and the Urban Affairs Coalition.
Meanwhile on the west coast, educational renegade and billionaire entrepreneur/investor Peter Thiel ‘s foundation has created the Thiel Fellowship, which offered bright young budding entrepreneurs $100,000 over two years not to go to college. Billed as “a radical rethinking of what it takes to succeed,” Thiel is specifically challenging the notion that college as we have known it is the best life preparation for young people in an era of radical economic and technological change.
These just-over-the-horizon initiatives may not represent existential threats to today’s higher education establishment. But it is quite clear that Internet-driven methods of wiring around the traditional notions of college are coming. Breaking the higher education industry’s monopoly on pathways to success for our kids should help make America’s colleges more responsive, more cost-aware, and more innovative as we move into our technologically-enabled future.
Watch CNBC’s “Street Signs” and "The Kudlow Report" on Tuesday, April 24th for “The Price of Admission” special reports about higher education, focusing on student loans and whether college is really worth the cost.
Dave Maney is Founder and Chief Executive Officer of Economaney LLC, a content-driven media company focused on painting the most vivid possible picture of the radically morphing global economy ten years out. Maney is a successful entrepreneur, business educator, and former journalist who previously co-founded Headwaters MB, a Denver-based merchant banking platform provider, and before that, Worldbridge Broadband Services Inc., a telecommunications network services firm. He began his business career at the San Francisco Chronicle Publishing Company as Assistant to the President of the newspaper division and as a business journalist at the company’s Illinois and Massachusetts newspapers. Prior to that, he had been an assistant to the New York State Senate Majority Leader.
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