Tag: universities

All you can learn for $99 a month

Buffet-style education?  Heck yeah.  The company is probably one you’ve never heard of (I hadn’t) but I already see it’s value and foundation: efficiency + quality + freedom = a better way for motivated learners to get degrees.  The company is StraigtherLine (based in DC) and it provides a carte blanche approach to education for a low monthly fee.  Partnering with colleges around the US for accreditation, it can eschew the rigors of meeting an accreditation but also provide credits as part of the monthly fee (I’m guessing that they assume students will average a certain number of days per course, ensuring their ability to cover course credit costs per student per course passed).

This model has its detractors and rightly so.  This is a major shakeup of the status-quo in American style (which in a sense is the global standard) higher education.  It’s a bet that 100s of millions–perhaps billions–of dollars are caught up in the system, an inefficiency brought forth by the “college amenity package” which currently consists of A/C dorms, game rooms, student centers, weekend trips, free internet, student clubs and activities, research grants, etc.  The whole shebang which constitutes the contemporary college experience.

That being said, I have to agree with the Washington Monthly‘s take on the so-called ‘education bubble’ (see a few earlier posts about this as well);

It’s tempting in such circumstances to take comfort in the seeming permanency of our colleges and universities, in the notion that our world-beating higher education system will reliably produce research and knowledge workers for decades to come. But this is an illusion. Colleges are caught in the same kind of debt-fueled price spiral that just blew up the real estate market. They’re also in the information business in a time when technology is driving down the cost of selling information to record, destabilizing lows. (Washington Monthly – “College for $99 a Month” pg 1)

It makes perfect sense that the arrival of ubiquitous, free information paired with easier to access internet connectivity means that costs will be driven down (what doesn’t make sense is that, until now, colleges have largely bucked the trend, charging what they want and increasing those charges at higher than justifiable rates):

Colleges charge students exorbitant sums partly because they can, but partly because they have to. Traditional universities are complex and expensive, providing a range of services from scientific research and graduate training to mass entertainment via loosely affiliated professional sports franchises. To fund these things, universities tap numerous streams of revenue: tuition, government funding, research grants, alumni and charitable donations. But the biggest cash cow is lower-division undergraduate education. (pg 3)

So what happens when that bottom falls out?  If Straighterline.com is marginally successful then there’ll be rivals partnering with as many accredited colleges offering the same programs.  Those colleges might even court several low cost providers to hedge their bets.  The unaccredited low-cost providers will cut out an entire swath of inefficiency (freshman lectures) leaving a gaping whole in university and college enrollments (cause those students will just pay the couple of hundred bucks and transfer in the max credits).  Where a university or college might have garnered $9000 from a student before (for 3 classes let’s say) the student now pays a few 100 and gets a jump start for him/herself and a bonus in his/her checkbook.  Colleges and universities will become leaner.  They’ll be forced to realize their competitive advantage and adopt a laser like focus to milk as much dough as they can from it (this is a positive in my humble opinion).

Honestly, this already exists for a lot of states that are smart about tiering their education: California is perhaps my favorite example.  As a “freshman” I can go to Community College (Santa Barbara has a particularly beautiful and esteemed on), I can finish 2 years of college (60 credits+!) and use them at any UC school in the state.  The total cost? 1200 bucks plus student fees (which includes a bus pass).  That being said, SBCC is hugely subsidized by the state.  So really, if a private company can do it profitably is that so wrong when a state can only do it by losing money?  Remember that CA just struggled to figure out a 44 billion dollar deficit.  Maybe outsourcing these courses to Straighterline  (instead of subsidizing them) could have saved some time, effort and money.

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