Friday, January 11, 2013

The End of the University as We Know It

American Education is in the Dumpster
American Education is in the Dumpster (Photo credit: brewbooks)

In fifty years, if not much sooner, half of the roughly 4,500 colleges and universities now operating in the United States will have ceased to exist.

The technology driving this change is already at work, and nothing can stop it.

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.

We’ve all heard plenty about the “college bubble” in recent years. Student loan debt is at an all-time high - an average of more than $23,000 per graduate by some counts - and tuition costs continue to rise at a rate far outpacing inflation, as they have for decades.

Credential inflation is devaluing the college degree, making graduate degrees, and the greater debt required to pay for them, increasingly necessary for many people to maintain the standard of living they experienced growing up in their parents’ homes.

Students are defaulting on their loans at an unprecedented rate, too, partly a function of an economy short on entry-level professional positions. Yet, as with all bubbles, there’s a persistent public belief in the value of something, and that faith in the college degree has kept demand high.

The figures are alarming, the anecdotes downright depressing. But the real story of the American higher-education bubble has little to do with individual students and their debts or employment problems.

The most important part of the college bubble story - the one we will soon be hearing much more about - concerns the impending financial collapse of numerous private colleges and universities and the likely shrinkage of many public ones.

And when that bubble bursts, it will end a system of higher education that, for all of its history, has been steeped in a culture of exclusivity. Then we’ll see the birth of something entirely new as we accept one central and unavoidable fact: The college classroom is about to go virtual.
We are all aware that the IT revolution is having an impact on education, but we tend to appreciate the changes in isolation, and at the margins. Very few have been able to exercise their imaginations to the point that they can perceive the systemic and structural changes ahead, and what they portend for the business models and social scripts that sustain the status quo.

That is partly because the changes are threatening to many vested interests, but also partly because the human mind resists surrender to upheaval and the anxiety that tends to go with it.

But resist or not, major change is coming. The live lecture will be replaced by streaming video. The administration of exams and exchange of coursework over the internet will become the norm. The push and pull of academic exchange will take place mainly in interactive online spaces, occupied by a new generation of tablet-toting, hyper-connected youth who already spend much of their lives online.

Universities will extend their reach to students around the world, unbounded by geography or even by time zones. All of this will be on offer, too, at a fraction of the cost of a traditional college education.

How do I know this will happen? Because recent history shows us that the internet is a great destroyer of any traditional business that relies on the sale of information.

The internet destroyed the livelihoods of traditional stock brokers and bonds salesmen by throwing open to everyone access to the proprietary information they used to sell. The same technology enabled bankers and financiers to develop new products and methods, but, as it turned out, the experience necessary to manage it all did not keep up.

Prior to the Wall Street meltdown, it seemed absurd to think that storied financial institutions like Bear Stearns and Lehman Brothers could disappear seemingly overnight. Until it happened, almost no one believed such a thing was possible. Well, get ready to see the same thing happen to a university near you, and not for entirely dissimilar reasons.

The higher-ed business is in for a lot of pain as a new era of creative destruction produces a merciless shakeout of those institutions that adapt and prosper from those that stall and die. Meanwhile, students themselves are in for a golden age, characterized by near-universal access to the highest quality teaching and scholarship at a minimal cost.

The changes ahead will ultimately bring about the most beneficial, most efficient and most equitable access to education that the world has ever seen. There is much to be gained.

We may lose the gothic arches, the bespectacled lecturers, dusty books lining the walls of labyrinthine libraries - wonderful images from higher education’s past. But nostalgia won’t stop the unsentimental beast of progress from wreaking havoc on old ways of doing things.

If a faster, cheaper way of sharing information emerges, history shows us that it will quickly supplant what came before. People will not continue to pay tens of thousands of dollars for what technology allows them to get for free.

Technology will also bring future students an array of new choices about how to build and customize their educations. Power is shifting away from selective university admissions officers into the hands of educational consumers, who will soon have their choice of attending virtually any university in the world online. This will dramatically increase competition among universities.

Prestigious institutions, especially those few extremely well-endowed ones with money to buffer and finance change, will be in a position to dominate this virtual, global educational marketplace. The bottom feeders - the for-profit colleges and low-level public and non-profit colleges - will disappear or turn into the equivalent of vocational training institutes.

Universities of all ranks below the very top will engage each other in an all-out war of survival. In this war, big-budget universities carrying large transactional costs stand to lose the most. Smaller, more nimble institutions with sound leadership will do best.

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