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The Coming Higher Education Bust: “Some Will Survive” ^ | March 1, 2013 | John Rubino

Posted on 03/09/2013 10:20:32 PM PST by Kevmo

The Coming Higher Education Bust: “Some Will Survive”

. by John Rubino on March 1, 2013 · 17 comments

To understand how close many US universities are to catastrophic failure, let’s start with the story of Robert (not his real name, but all the rest is true).

He’s 19, a freshman at a state university, a smart kid with eclectic interests but no sense of what he wants to be when he grows up. His favorite class, which he had to battle to get into, is an upper-level creative writing seminar taught by a successful author in which six students, all serious about the subject, submit original work and critique it each week. He’s also taking “computer science as a career” taught by a disgruntled professor who shows lots of videos while never missing a chance to tell the class how little he cares about the subject, and weight lifting, which operates on the honor system; Robert promises to lift weights and the school promises to give him an A.

What’s notable about this menu is that the two fluff courses cost the same as the much more serious and harder-to-duplicate creative writing seminar. Robert’s parents, appalled by the difference between his tuition bills and theirs of two decades ago, are aware of the varying amounts of quality and value they’re getting for the big checks they’re writing. And they’re responding like consumers. They’re looking into local community colleges that offer intro courses in core requirements like psych and sociology for much less, with the resulting credits being transferable to most four-year colleges. They’re researching online schools that also offer cheap, transferable credits for low-level coursework taken from home. And they’ve signed Robert up for an online “health coaching” program that will make him a certified health coach (at worst a nice, unusual resume filler) while generating nearly a full year of credits that several colleges in the region will accept. The idea is for Robert to gobble up a bunch of cheap credits and then transfer to a four-year bricks-and-mortar university for his last couple of years, thus acquiring a degree from a name-brand school for far less than four years of full-price tuition.

Variations on Robert’s theme are happening everywhere, as a combination of technology and sticker shock leads increasingly well-informed parents and students to distinguish between the truly-valuable offerings of mainstream universities and commodity courses and activities that can be had elsewhere for a fraction of the price. The result: a tsunami of creative destruction is bearing down on US higher education.

Wired magazine recently interviewed author and consultant Clayton Christensen, who puts some theoretical meat on the bones of this assertion. In the first part of the interview he explains the concept of disruptive innovation, through which big, complacent organizations are crushed by smaller competitors making low-end, cheap products that gobble up markets from below. Think cheap Japanese cars destroying the US auto industry, steel mini-mills bankrupting Big Steel, and so on. Now it’s Big Education’s turn:

Clayton Christensen Wants to Transform Capitalism

Howe: If you had to list some industries right now that are either in a state of disruptive crisis or will be soon, what would they be?

Christensen: Journalism, certainly, and publishing broadly. Anything supported by advertising. That all of this is being disrupted is now beyond question. And then I think higher education is just on the edge of the crevasse. Generally, universities are doing very well financially, so they don’t feel from the data that their world is going to collapse. But I think even five years from now these enterprises are going to be in real trouble.

Howe: Why is higher education vulnerable?

Christensen: The availability of online learning. It will take root in its simplest applications, then just get better and better. You know, Harvard Business School doesn’t teach accounting anymore, because there’s a guy out of BYU whose online accounting course is so good. He is extraordinary, and our accounting faculty, on average, is average.

Howe: What happens to all our institutions of advanced learning?

Christensen: Some will survive. Most will evolve hybrid models, in which universities license some courses from an online provider like Coursera but then provide more-specialized courses in person.

“Some will survive”…that’s a nice, understated way of saying that many won’t survive. And those that don’t will be the ones that have spent fortunes on non-academic fluff like state-of-the-art rec centers and NFL-caliber football stadiums, while assigning grad students to teach amphitheater 101 classes – all while raising tuition by 10% a year to levels that force students to graduate with tens of thousands of dollars of debt and highly uncertain job prospects. Those schools will be caught between the best, truly-valuable universities and junior colleges, online classes and “alternative” programs with transferable credits. The space in between won’t generate enough revenue to support their bloated costs.

Academia will become an even tougher place for generic PhDs, while turning into a candy store for creative entrepreneurs. So whether this is a good or bad thing depends on where you are in the academic food chain. The typical history major from a mid-range school will be unemployed and default on his loans. The undistinguished academic administrator will be fired and, like a mediocre newspaper editor, find zero new openings available. Entrepreneurs with solutions to the problems of cost, access, and quality will be the Mark Zuckerbergs and Steve Jobs of the next decade. Kids with parents able to shop aggressively and creatively will get good, cheap educations.

In other words, capitalism will work its usual magic and when the dust clears US higher ed will have been transformed from dysfunctionally-overpriced to consumer-driven, varied and highly-advanced. With a lot of pain and casualties along the way. To which parents like Robert’s would say, “bring it on, the sooner the better.”

TOPICS: Education
KEYWORDS: chspe; education
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1 posted on 03/09/2013 10:20:32 PM PST by Kevmo
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To: All; y'all; et al


Here’s my modest proposal for education reform.

We have been discussing ways to fast track kids through high school to avoid the liberal agenda and other idiocies:

Proposal for the Free Republic High School Diploma.


2 posted on 03/09/2013 10:24:07 PM PST by Kevmo ("A person's a person, no matter how small" ~Horton Hears a Who)
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To: Kevmo

bump for future reference

3 posted on 03/09/2013 10:56:19 PM PST by 21twelve ("We've got the guns, and we got the numbers" adapted and revised from Jim M.)
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To: Kevmo

It will take several generations, because there are many generations of university grads who have emotional ties. They all vote and will pressure Congress to subsidize their college of their youth then see it go bankrupt. Just look how alumni react if their college decide to do away with football, basketball etc etc. They rather see tuition increases so they can run a pro sport team along with high cost stadium and coaching staffs. If Americans cannot afford tuitions, colleges simply recruit foreign ones who pay their tuitions upfront. Globalism offers universities options if Americans will not buy their services. Arab pinces will come to US so they can spend four years escaping their stict Islamic societies, and Chinese students are willing to pay for expensive US tuition because slots for Chinese universities are still limited and US offers a good fall back option. Plus many corrupt Chinese officials want their kids in the US just in case they must leave the country in a hurry. When Main Street Americans don’t have the money for goods and services, corporate America and universities can offer their goods and services to to foreigners who have money.

4 posted on 03/10/2013 12:08:18 AM PST by Fee
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To: Fee

Won’t take that long. There are many folks like me, with the degrees and the credentials that have been shut out of the education establishment.

What happens when you start your own business and start to tap into all these frustrated young people? Things will move, and move quickly.

The only people who are really benefitted by the system as is are all over 50. Everyone of my peers have gone overseas or are working outside of the establishment.

5 posted on 03/10/2013 12:57:24 AM PST by JCBreckenridge (Texas is a state of mind - Steinbeck)
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To: JCBreckenridge

I’m overseas and will probably never come back to the USA.
I will give up my passport so that the IRS will leave me alone in the future.

I can always sneak across the border if I ever want to come back.

6 posted on 03/10/2013 1:23:44 AM PST by Bon mots (Abu Ghraib: 47 Times on the front page of the NY Times | Benghazi: 2 Times)
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To: Kevmo
My suggestion:

Encourage employers to use SAT and ACT scores and internships to identify bright and teachable applicants.

Two reasons;

1) Most of the work done in the U.S. is learned on the job regardless of whether or not the employee has a college degree.

2) Little of the work done in the U.S. historically required a college level education. A solid 8th grade education was more than enough. Honestly, my parents and grandparents would laugh at the idea that the check-in person at the Marriott hotel now needs to be a college graduate.

7 posted on 03/10/2013 3:54:01 AM PDT by wintertime
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To: Kevmo
One more suggestion:

There is plenty available on the Internet now. What has been lacking is certifiable qualifying exams. What we need are “We Test” centers that can test the applicants knowledge and certify that the person taking the exam is who he says he is.

Coursera is working on this now. They say that all people have a typing rhythm that is as identifiable as their fingerprint. It should soon be operational.

8 posted on 03/10/2013 3:59:42 AM PDT by wintertime
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To: Kevmo
Finally,.....I would LOVE to see a our government’s K-12 socialist-entitlement and godless schools go bust.
9 posted on 03/10/2013 4:00:53 AM PDT by wintertime
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To: Fee

Foreigners aren’t stupid. Why would they waste their money if Internet education with certifiable testing and qualifying were cheaply available to them?

10 posted on 03/10/2013 4:03:43 AM PDT by wintertime
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To: wintertime

Nice thought, but I’m not sure I agree with your assertion #1. The most important professions for our future growth require hard science education. It is not likely that, for example, a chip designer or mechanical engineer would learn the required math on the job.

Economic growth will be driven by technological innovation and development, not by hiring a bunch of people to wait tables at Chili’s and screw lug nuts onto cars on an assembly line.

11 posted on 03/10/2013 5:37:43 AM PDT by dinodino
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To: Kevmo

“You know, Harvard Business School doesn’t teach accounting anymore. . .”

No doubt the diversity and ethics classes are outstanding at Harvard Business School.

12 posted on 03/10/2013 5:57:52 AM PDT by Soul of the South (Yesterday is gone. Today will be what we make of it.)
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To: Kevmo
I graduated from college in the 60s with an engineering degree, and went to work for a large company. A close friend had a father who was a tenured professor at a nearby state university, and I was told his salary. It was 150% of my starting salary. I only dreamed of earning so much.

These days a tenured college professor earns several times (several hundred percent) that of a starting engineer. Kudos to the professors, but it's one of the reasons college is so expensive. I earned my way through college as a co-op work-study student. The same program today, from the same university, doesn't even pay enough to cover tuition. Then, it paid enough to cover tuition, books, living expenses, and a 3 year old car (a sporty convertible).

On top of that the college bureaucracy has exploded. Non-teaching positions were but a fraction of teaching positions then, and are multiples now. A government organization will always metastasize into a bloated cancer. They always have. It's time to put the free market back into university education. Some of the methods parents used in this article will help. On line and "free" courses will too. Let's hope it doesn't take too long.

13 posted on 03/10/2013 6:09:15 AM PDT by norwaypinesavage (Galileo: In science, the authority of a thousand is not worth the humble reasoning of one individual)
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To: Kevmo

There are big changes ahead for Higher Ed. But this article is full of bunk. Harvard is still teaching Accounting despite what this story claims. And if you want any major or even medium-sized employer to open up for business in your state or city, they want to know what training and educational opportunities are available to provide trained workers in their field. Biomedical research, Accounting, Healthcare, all the various aspects of Technology, Construction Management, Architecture, etc. You aren’t going to attract those companies without a pipe line to provide those industries a skilled and already trained work force.

14 posted on 03/10/2013 6:51:20 AM PDT by PFC
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To: dinodino
1. The most important professions for our future growth require hard science education.

I absolutely agree.

At the age of 18 two of my homeschoolers finished B.S. degrees in mathematics so I fully understand that for the economic health of our economy that the STEM professions will be the most important, but that work will be reserved for those with the highest IQs. Please note that I did not recommend that all college attendance be eliminated for all people.

For my children, most of their STEM courses were offered in a very rigid and lockstep manner. Some were available only once a year. As for the humanities, many of these, today, can be taken by way of the Internet. Even with the primitive Internet resources that we have today, my children's time spent on campus could have easily been reduced by 25 to 30%. They could have easily finished B.S. degrees in mathematics by the age of 16 or 17.

Once upon a time, ( not so long ago) men did learn to be engineers on the job. My father is an example. He worked for an energy company and was one of their highest ranked ( and paid) engineers.His education was a combination of mentoring, night college classes at Drexel Institute of Technology, and workplace college courses. He directed his company's portion of the emergency power systems for Mercury and Apollo space missions.

For most of the work done in the U.S. ( for example, night manager of Wendy's or check-in clerk at the Marriott) a solid and certifiable 8th grade education, combined with internships, mentoring, Internet course work, some college night classes, and workplace courses should be **more** than enough. That the supervisor of the car rental cleanup crew needs to have attended college would be absolutely laughable to my grandparents and great grandparents.

Sadly, given the high numbers of high school **graduates** sitting in community college remedial courses, few students are graduating from high school with even an 8th grade education.

Employers demand college for their employees for two reasons. ( I know because I was once an employer)

1) They can.
2) It is just about the only way to guarantee that an employee is reasonably literate. College attendance does not mean they understand simple fractions or decimals.

If I had received resumes with lists of **certifiable** Coursera or Khan Academy mastery of a solid 8th grade education they would have won an interview far faster that even those attending community college. Gee! At least I would know they knew the difference between a millimeter and 1/8th of an inch.

15 posted on 03/10/2013 6:54:00 AM PDT by wintertime
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To: norwaypinesavage
I come from a family of Drexel engineers. Today, this university is one of the most expensive in the nation. Mr. Drexel, the founder, would be appalled!

Please read my post #15.

16 posted on 03/10/2013 6:57:07 AM PDT by wintertime
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To: norwaypinesavage

On line and “free” courses will too. Let’s hope it doesn’t take too long.

Hopefully, it will mean less time spent in our government’s K-12 socialist-entitlement and godless schools, as well.

If a child has mastered addition and subtraction, he should **immediately** progress to multiplication and division. If he can prove that he reads and writes at the 5th grade level he should move on to 6th grade. This idea of having to lock-step one’s way through the K-12 labyrinth is complete insanity.

And....homeschoolers have, and are, proving every day that children are fully capable of college level work at very early ages. ( Some, even before they hit their teen years.)

17 posted on 03/10/2013 7:09:52 AM PDT by wintertime
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To: Kevmo

This is the first article I’ve seen on the subject. I never hear about it on the radio and never on TV.

And this is a huge issue.

I find that when a child is told that he will be paying for his own school, creativity and expertise in the workings of the internet take over.

The major cause of tuition costs rising so ridiculously is the lack of consumerism.

I knew tuition cost was rising way quicker than the rate of inflation ten years ago.

Why are people not looking at this and saying no>

I hear parents complaining about what goes on, for instance, a son or daughter cannot understand the broken English of a professor or so, and cannot get a good grade (he certainly isn’t learning).


I would not pay $30,000 per year for that. NO

18 posted on 03/10/2013 7:55:51 AM PDT by stanne
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To: wintertime

I have ran my own tutoring business since graduation back in ‘07. What I have found is that 40 hours of tutoring is equivalent to about a year, sometimes two of normal instruction. I have helped high school students make the jump to college because the college used to send me their most difficult students. Mostly because they didn’t want them! There really is no need for most of what the students do in school - most of it is busy work.

19 posted on 03/10/2013 7:59:01 AM PDT by JCBreckenridge (Texas is a state of mind - Steinbeck)
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To: wintertime
All good points. To me, the biggest hurdle in the "creative destruction" of higher education in the U.S. is the accreditation standards for many professionals. In most states it's nearly impossible to get licensed in many professions (law, accounting, engineering, medicine, etc.) without having a degree from an accredited institution.

If that obstacle can ever be dealt with, the whole house of cards will come crashing down pretty quickly. This is why so many of the articles you see on this subject (like this one here) are based on anecdotal stories from people whose majors (journalism, for example) don't involve formal professional licensure.

20 posted on 03/10/2013 8:20:26 AM PDT by Alberta's Child ("I am the master of my fate ... I am the captain of my soul.")
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