New New. Models, Rules. Higher Education:

Transcription

1 Higher Educatio: New New Models, Rules HIGHER EDUCATION IN THE CONNECTED AGE The Iteret eables ew models. I the commercial world, for example, we have ebay, Amazo.com, ad Netflix. These ew models operate with a differet set of rules tha do traditioal models. New models are emergig i higher educatio as well for example, competecy-based programs. I additio, courses that are beig provided from outside the college or uiversity are receivig credit, either through trasfer or for the learig achieved. These courses may be MOOCs or may be offerigs from a for-profit compay such as StraighterLie. The path from course to credit represets a otraditioal model. What are the ew rules that will accompay these ew models i higher educatio? The followig three essays explore the chages that might be ahead. Louis Soares, Vice Presidet for Policy Research ad Strategy at the America Coucil o Educatio, outlies a geerative model of state policy ad istitutioal practice. He suggests that learig techology should be drive by learig outcomes ad that learig techologies are a key mechaism for achievig trasparecy i the learig process. Addressig the questio of quality, Judith S. Eato, Presidet of the Coucil for Higher Educatio Accreditatio, describes how course quality might be esured through a ew mechaism. She recogizes that progress caot be deied for too log ad that stallig progress does ot serve the eeds of learers. Fially Burck Smith, CEO of StraighterLie, illustrates how olie courses could be predicated o a differet set of fiacial rules. He asserts that the ew model ad the ew rules might be better for may learers. ILLUSTRATION BY HANK OSUNA, SEPTEMBER/OCTOBER 2013 EDUCAUSEreview 69

2 Creatig a Eviromet for Learig Techologies: Toward a Geerative Model of State Policy ad Istitutioal Practice By Louis Soares I a August 22 aoucemet, the Obama Admiistratio brought reewed federal policy focus to iovatio i higher educatio i the Uited States. The aoucemet of a ew college/ uiversity policy ageda, Makig College Affordable: A Better Ageda for the Middle Class, highlighted the role of state policy ad istitutioal iovatio as keys to improvig access ad success for millios of Americas. 1 The admiistratio s ageda provides icetives for states to maitai fudig for their higher educatio systems ad icrease accoutability through a $1 billio Race to the Top grat fud. The ageda also exhorts higher educatio istitutios to adopt techology ad pedagogical iovatios such as MOOCs, credit based o learig rather tha seat-time, hybrid classrooms, ad techology-eabled course redesig. The admiistratio is providig $260 millio First i the World iovatio fud to test ad evaluate promisig ew models of higher educatio. This dual focus o states ad higher educatio istitutios is appropriate. Good policy ad educatio practice should iform each other. After all, states ad their public ad private higher educatio istitutios are where the rubber meets the road o college affordability, quality, ad completio. With regard to techology ad the pedagogical chages it ca eable, the policy formatio versus educatioal practice iovatio cycle is particularly critical. As techology-eabled educatio practice evolves (ow almost i real time), what works ad what ca ad should be scaled become critical for policy formatio. Although state policy activity i the area of MOOCs, credit for learig, ad other learig techology solutios has bee icreasig i recet years, it has a haphazard feel: the policy formatio cycle ad the educatio practice cycle are ot i syc. 70 EDUCAUSEreview SEPTEMBER/OCTOBER 2013

3 Higher Educatio: New Models, New Rules Learig techologies ad the educatioal approaches they eable are amog the tools that ca spark iovative educatioal strategies to address U.S. educatio priorities icludig access, affordability, ad completio. Ufortuately, the curret state policy eviromet does ot ecourage the adoptio of these techologies i a geerative way i which prove practice iforms policy formatio. Defiitio ad Characteristics To create such a eviromet, state policymakers eed a defiitio of learig techology i the cotext of postsecodary educatio. We begi with a exploratio of learig. Historically, i practice ad i public policy, the assumptio has bee that faculty ad studets iteract to produce learig. This assumptio uderpis how curricula are developed, which campus buildigs are built, how may faculty get hired, ad how much subsidy public colleges ad uiversities receive to educate studets. Differet tasks ad resources, i tur, ifluece this learig process: istructio delivery; course/curriculum/program developmet; access to textbooks ad libraries, tutorig, ad metorig; classroom/learig maagemet; ad assessmet ad credetialig stadards. With particular regard to faculty members developmet ad delivery of courses ad curricula, higher educatio has treated this as artisa work, with the vast majority of courses developed ad delivered as oe-offs by idividual professors. Ideed, this treatmet ca be immortalized i state formulas for fudig higher educatio i silos for istructio, studet Ufortuately, the curret state policy eviromet does ot ecourage the adoptio of these techologies i a geerative way i which prove practice iforms policy formatio. services, ad academic support. This divides the artisa work of faculty from the other tasks, services, ad resources that make learig possible. Techology, however, is fudametally challegig these assumptios by isertig itself ito the teachig ad learig process. Learig techology is, thus, the capability to help studets master ew kowledge ad demostrate its use, facilitated by the iteractio of four compoets: hardware (e.g., microchips, computers, telecommuicatios equipmet); software (e.g., digital books ad learig tools, itelliget programs that iteract with learers to help them master cotet ad with faculty to help them maage the learig process); the Iteret/web (which allows for real-time access ad collaboratio amog learers ad faculty); ad the best research i learig sciece (the study of how people lear). At the itersectio of all these compoets is olie educatio. Uder this too-geeral term sit some of the most promisig learig techologies for addressig affordability, quality, ad completio challeges: Iteractive courseware: low-cost, highquality software that delivers istructio by actively egagig the studet with cotet ad applicatios of kowledge, ideally liked to learig maps that visualize the jourey to completio Diagostic assessmets: a ew geeratio of assessmets that provide graular data o studets kowledge, payig particular regard to readiess for college-level work Learer relatioship maagemet software: software that provides studets, faculty, ad staff with tools to moitor learig progress i real time ad that flags momets whe itervetio is eeded The power of these techologies lies i their ability to persoalize the learig experiece ad adapt istitutioal resources to learers eeds, thus optimizig the likelihood of a quality credetial eared as quickly as possible for a reasoable price. Persoalize meas that the techology delivers istructio or couselig, or helps faculty ad staff do so, ad allows for the gatherig of data combied with ways to display the iformatio to adapt practices ad policies. Together these tools, with their ability to persoalize istructio, are eablig the developmet of alterative, low-cost higher educatio models that ehace quality, icrease studet persistece, ad reduce costs. Armed with a workig defiitio of learig techology, policymakers also eed a short list of learig techology characteristics that have implicatios for policy. Learig techology requires capital ivestmet. Developig courses, curricula, ad degree programs mediated by learig techology takes time ad moey. I the old oe-off classroom-based model, faculty members salary covered most developmet costs. I oe sese, developmet was iexpesive, but the delivery the actual teachig by the faculty was labor-itesive ad expesive. Learig techology flips that equatio: developmet costs are higher, with teams egaged to desig curricula ad outcomes, build a learig platform, develop software; ad repurpose faculty ad staff; but delivery costs are lower ad ca eve be amortized over time, ot ulike a capital ivestmet. I most states, fudig formulas do ot curretly accout for this iheret differece i how educatio is developed ad delivered. The istability of state fiacig year-over-year makes it difficult to fud loger-term ivestmet. 2 Learig techology is a team sport. Course ad program developmet mediated by learig techology is doe by teams composed of faculty members, learig scietists, huma-computer iteractio experts, ad software egieers i 72 EDUCAUSEreview SEPTEMBER/OCTOBER 2013

4 order to make the best use of multidiscipliary kowledge for desigig effective learig eviromets. These teams articulate a iitial set of studet-cetered, measurable learig objectives ad desig the istructioal eviromet to support studets i achievig those objectives. The otio of a team sport ca be exteded across istitutios ad eve across states, callig ito questio curret state fiace models that make distictios betwee i-state ad out-of-state studets. Learig techology is drive by learig outcomes. Almost by defiitio, for learig techologies to do their work, the desig teams must hardwire ito the techologies a set of decidedupo learig outcomes: cotet that studets must kow ad be able to demostrate that they ca apply. Learig techologies, assisted by faculty/staff, ca the help studets master the kowledge ad obtai the outcomes. Learig techologies track progress, ad studets ca move o oce mastery is achieved. The learig-outcomes focus has a corollary: task ad resources that were oce held separate (i.e., istructio, studet services, academic support) ted to be repurposed or blurred i the pursuit of studet learig. Needless to say, this competecy-based approach calls ito questio ot oly the etire time-based model for fiacig erollmet but also the may silos that states use to develop their fudig formulas. With this approach, SEPTEMBER/OCTOBER 2013 EDUCAUSEreview 73

5 Higher Educatio: New Models, New Rules assessmet ad itervetio ca start at ay time. For example, studets ca be assessed i high school for college readiess ad either be accelerated to college-level work or provided with itervetios to help them get up to speed disruptig the curret separatio of state fudig for K12 ad higher educatio. Learig techology requires trasparecy. Learig techologies allow us icremetal glimpses ito the learig process glimpses that were ukow a decade ago. For learig techologies to be effective ad scaled, this iformatio eeds to be shared. Whereas studets, faculty, ad staff obviously eed to kow about the learig process, admiistrators ad policymakers also eed to kow what s goig o at the program, departmet, istitutio, ad system levels so that they ca iform policy as those levels. A corollary is that educatio mediated by learig techology ca be very persoal, with the trasparecy of iformatio allowig studets to better participate i their ow educatioal success. Learig techology opes up competitio. If istitutios across state boudaries desig a course ad if learig outcomes are what matter ad if mastery ca be measured, the what differece does it make who or what does the istructio or the assessmet? The ubudlig of higher educatio could become a reality. State regulatio of higher educatio mediated by learig techology is far from beig developed to the poit of hadlig this level of uace ad competitive potetial. Learig-outcomes ad mastery-based educatio opes the doors to ay orgaizatio that ca help studets lear, creatig a ew world of postsecodary educatio competitio. Toward a Geerative Model of State Policy ad Istitutioal Practice Learig techologies hold the promise of makig college more affordable while maitaiig quality. I order to ivet ad experimet with ew learig techologies ad itegrate them ito pedagogy, we eed the state policy formatio cycle ad the istitutioal practice cycle to be i syc. Both policymakers ad istitutioal leaders must have the courage to allow for the evolutio of system-level coversatios that are iformed by the learig techology characteristics To ivet ad experimet with ew learig techologies ad itegrate them ito pedagogy, we eed the state policy formatio cycle ad the istitutioal practice cycle to be i syc. described above. The followig are some ways that state policymakers ad higher educatio leaders, workig i partership, ca thik about policy formatio i light of learig techology characteristics. These suggestios fall ito three broad categories: fiace, regulatio, ad iovatio policies. Fiace Policies Explore retur-o-ivestmet metrics for higher educatio systems leveragig the trasparecy ad measuremet that embedded learig techologies make possible. States already gather a good deal of fiacial iformatio o their istitutios: average spedig per studet; average spedig per degree coferred; estimates of costs associated with excess credits ad with studet attritio; cost, price, ad subsidy structures ad the proportio of average costs that are subsidized by studet tuitios; margial cost per studet by program ad level of istructio; ad average costs of shared services icludig overhead. Do these measures reflect the learig techology realities described above? For example, do capital budgetig rules ad regulatios facilitate smart ivestmet i learig techologies? Set aside strategic ivestmet fuds specifically targeted to loger-term ivestmets that meet public priorities for affordable, quality postsecodary educatio delivered with learig techologies. Adapt fudig formulas that allow istitutios to bled fuds targeted to discrete services (e.g., istructio, studet support services, ad academic support) i ways that allow them to use the right mix of learig techologies to help studets complete their educatio ad get a credetial. Regulatio Policies Coduct a policy audit to determie which regulatios ad other policy barriers impede the developmet ad use of learig techologies, while esurig that ew providers meet rigorous quality stadards. Experimet with a miimum credits eared through learig techologies requiremet as a way to ecourage adoptio of these types of solutios give they demostrate efficacy. 74 EDUCAUSEreview SEPTEMBER/OCTOBER 2013

6 I large, iterstate metro areas, reduce barriers to cross-istitutio ad cross-state collaboratio o the developmet of programs mediated by learig techologies, aligig efforts to a automatic trasfer of credit for these programs. Iovatio Policies Ecourage state-backed veture fuds to ivest i techology startups that are creatig ew learig techologies, possibly implemeted i partership with philathropies that share the missio of scalig the use of learig techology Create competitive grat fuds to explore the itegratio of emergig learig techologies, such as MOOCs, ito alterative educatioal pathways to credetial attaimet These policy suggestios are oly a samplig of the geerative power that ca emerge from withi the policy formatio ad educatio practice cycles if policymakers ad higher educatio leaders ca fid commo groud. Collaboratively developed fiace, regulatio, ad iovatio policies will foster the adoptio of powerful learig techologies for providig studets with high-quality, low-cost pathways to the timely completio of a postsecodary educatio credetial. Where the rubber meets the road, states ca pave the way. Notes 1. Office of the Press Secretary, Fact Sheet o the Presidet s Pla to Make College More Affordable: A Better Bargai for the Middle Class, The White House, August 22, 2013, /08/22/fact-sheet-presidet-s-pla-make -college-more-affordable-better-bargai-. 2. Although Ope Educatio Resources (OER) ad Massive Ope Olie Courses (MOOCs) have recetly made low- or o-cost learig techologies seem to be at our figertips, the reality is that we are still some distace from ways to esure quality i istructioal delivery, assessmet, ad credetialig usig these resources Louis Soares. The text of this article is licesed uder the Creative Commos Attributio- NoCommercial-NoDerivs (by-c-d) 3.0 Uported Licese. Louis Soares (lsoares@aceet.edu) is Vice Presidet for Policy Research ad Strategy at the America Coucil o Educatio (ACE). SEPTEMBER/OCTOBER 2013 EDUCAUSEreview 75

7 A Quality Platform for No-Istitutioal Higher Educatio By Judith S. Eato No-istitutioal educatio is upo us: collegiate istructio is icreasigly beig offered outside of colleges ad uiversities. The most dramatic example, of course, is Massive Ope Olie Courses (MOOCs), which are garerig so much attetio of late. However, the o-istitutioal sector is made up of a umber of additioal providers that are ot MOOCs but that share a umber of MOOC characteristics: olie, courses or parts of courses, ofte part of a episodic educatio experiece, odegree, ot-for-credit, ad uaccredited. I additio to Coursera ( ad MOOCs, the oistitutioal sector icludes a wide variety of providers: badge providers, such as Mozilla ( providers that review competecy-based educatio ad prior learig, such as the Coucil for Adult ad Experietial Learig ( ad private providers of low-cost courses, such as StraighterLie ( lie.com/) ad Saylor ( All of these providers offer educatioal cotet or a review process or both. The emergece of the oistitutioal sector is ofte described as iovative ad is sometimes described as disruptive. As may have poited out, the growth of this sector is also part of a ubudlig or disaggregatio of higher educatio istitutios geerally. I ubudlig, the core academic fuctios that have log bee arrayed uder the authority of colleges ad uiversities are shiftig to other providers. These fuctios iclude the determiatio of academic stadards ad who ca study, as well as educatioal offerigs, degrees ad credetials, teachig ad learig programs, ad curriculum developmet. The o-istitutioal sector is ow carryig out some of these core fuctios: ayoe ca take a MOOC; StraighterLie develops ad offers coursework; ad Mozilla s badges are a form of credetialig. All are egaged i teachig ad learig i some form. What couts as effective performace or quality i the o-istitutioal sector? What are the iteral quality-review mechaisms used by these providers? Is some form of exteral review eeded or desirable? What if the o-istitutioal sector comes to play a larger, more sigificat role i the postsecodary 76 EDUCAUSEreview SEPTEMBER/OCTOBER 2013

8 Higher Educatio: New Models, New Rules educatio experiece of a icreasig umber of studets? What happes if the ubudlig or disaggregatio of higher educatio geerally becomes the orm? Accreditatio ad the No-Istitutioal Sector Typically, the first respose to a call to address quality i higher educatio has bee: We have accreditatio to do this. Accreditatio a o-govermetal, exteral, peer-based, ad stadards-based review of colleges ad uiversities has examied ad judged higher educatio istitutios ad academic programs for over 100 years. More tha 8,300 istitutios ad 21,000 programs are curretly accredited. However, based o resposes to a recet Coucil for Higher Educatio Accreditatio survey, the accreditatio practice is ot curretly addressig MOOCs or the other providers i the o-istitutioal sector. 1 At the same time, accreditatio has a effective track record for respodig to iovatio i higher educatio, goig back may decades. Whe commuity colleges came o the scee i large umbers i the 1960s, accreditatio was there to esure quality. Whe olie learig emerged i the 1990s, accreditatio was agai there to esure quality. Ad, most recetly, accreditatio has played a sigificat quality-assurace role i the eormous growth of educatioal compaies i the for-profit sector, especially publicly traded corporatios. Accreditatio is pervasive, beig deeply egraied ot oly i higher educatio but i the geeral society. Govermets deped o accreditatio as a reliable authority to affirm academic quality whe makig taxpayer fuds available to millios of studets ad thousads of istitutios. The private sector corporatios, employers, foudatios relies o accreditatio whe makig private fuds available for tuitio assistace, research, ad programs. Studets cout o accreditatio as a public affirmatio of the academic legitimacy of a istitutio or program; they deped o accreditatio to sigal the worth of the degrees ad credits they ear ad to ease trasfer of those credits. Accreditatio is the core idicator of the academic legitimacy of a college or uiversity, whether here i the Uited States or outside the coutry. If accreditig orgaizatios were to take o the resposibility of exteral quality review of the o-istitutioal sector, their work aligs with these providers o a umber of poits. The o-istitutioal sector has a pathway fuctio, coectig to accredited traditioal istitutios through the pursuit of credit for o-istitutioal offerigs. I a umber of istaces, the educatio that is offered is collegiate, sharig 78 EDUCAUSEreview SEPTEMBER/OCTOBER 2013

9 these characteristics with colleges ad uiversities, but it is delivered differetly. Both the accredited istitutioal sector ad the o-istitutioal sector are eager to protect studets ad society by idetifyig substadard or rogue offerigs. Accreditatio ca be the vehicle through which traditioal istitutios lear about the quality of the oistitutioal sector. Alteratively, some questio this aligmet ad the desirability of accreditatio movig ito the o-istitutioal sector. They poit out that the review of o-istitutioal educatio would require a break with fudametal practices i accreditatio: Accreditors review istitutios ad programs, ot courses. No-istitutioal educatio is, at most, coursework. Accreditors focus o credits ad degrees. No-istitutioal does either at least thus far. Accreditors review collegiate educatio. How much of o-istitutioal is at the collegiate level? Accreditatio is grouded i provider-structured higher educatio. No-istitutioal is ustructured by desig studets pick ad choose. From the perspective of a oistitutioal provider, to be accredited would carry a public ackowledgmet of its basic value ot equivalet, but similar, to the offerig of a istitutio i the traditioal sector. At the same time, a regime of exteral quality review may ot fit well with the imbleess ad flexibility o which the o-istitutioal sector relies. A Quality Platform For whoever addresses the quality questio for the o-istitutioal sector, key issues emerge. What do we wat to kow? Do the same quality expectatios of the istitutioal sector apply to the o-istitutioal sector? Do we eed separate stadards? Who should udertake a quality review? How would a review proceed? Oe respose is to build a Quality Platform : a set of quality expectatios that defie ad are appropriate to the o-istitutioal sector. The platform would be focused solely o these providers ad would have as its goal the affirmatio of their performace, reliability, ad effectiveess. If the Quality Platform is applied successfully, providers will be publicly ackowledged with a seal or affirmatio as a Quality Platform Provider. The work could be udertake by accreditig orgaizatios, existig higher educatio associatios, or ewly formed orgaizatios withi or outside of higher educatio. The capacity of ad the practices carried out by a Quality Platform could be hadled by a variety of etities. A Quality Platform review would begi by examiig the iteral qualityreview practices of providers i the o-istitutioal sector, followed by a exteral review. It would focus first o studet achievemet: What do studets kow ad what ca they do as a result of takig oe of these educatioal offerigs? The review would be grouded i the purpose of the educatioal offerigs, cosiderig such fudametals as whether the offerigs are iteded to be stad-aloe, to cotribute to a idividual s overall growth ad developmet, or to be a pathway to college credit (e.g., through review of a studet s oistitutioal educatio by a college or uiversity). Platform stadards could be developed to examie the capacity ad performace of the provider. Reviews could be carried out by educatioal experts, may of whom would be peers. The review would require a strog commitmet to trasparecy, icludig comparisos amog like offerigs. The reviews could be periodic, perhaps every three years. Where Do We Go from Here? No-istitutioal educatio is emergig as a additioal or alterative higher educatio experiece for a umber of studets. This educatio takes place outside traditioal colleges ad uiversities ad may grow to play a sigificat role i studets efforts to obtai credits ad degrees or achieve other educatioal goals. We are talkig ot oly about MOOCs but also about private course providers, badge providers, ad providers of judgmet about competecy-based educatio ad prior learig. We are talkig about the ubudlig or disaggregatio of core academic fuctios becomig the orm. If we are o a path that leads to a sigificat expasio of educatioal offerigs from the o-istitutioal sector, we eed to address key questios about the quality of the capacity, processes, performace, ad results of these offerigs. What are the providers attemptig to achieve? What have studets leared, ad what ca they do? Exteral quality review, whether udertake by accreditig orgaizatios or others, ca assist i esurig that studets are learig, that offerigs iteded to ultimately be used for college credit or aother purpose are soud, ad that studets ad society are protected from substadard offerigs. The Quality Platform is oe meas to orgaize the stadards ad processes of a exteral quality review for the o-istitutioal sector. Note 1. Coucil for Higher Educatio Accreditatio, Accreditatio ad Extra-Istitutioal Educatio Survey, July August Judith S. Eato Judith S. Eato (eato@ chea.org) is Presidet of the Coucil for Higher Educatio Accreditatio (CHEA). SEPTEMBER/OCTOBER 2013 EDUCAUSEreview 79

10 The Perfect Market Challege By Burck Smith to the Subsidy Structure of Higher Educatio Though hard to kow exactly, probably over half of the U.S. higher educatio market several hudred billio dollars per year is drive by taxpayer subsidies ad philathropic largesse. Startig with the Morrill Lad-Grat Acts i the mid-to-late 1800s ad cotiuig with the G.I. Bill after World War II, state-supported commuity colleges i the 1960s ad 1970s, ad today s Pell Grats ad subsidized-loa programs, taxpayers have subsidized higher educatio uder the assumptio that higher educatio is a imperfect market: that is, there are ot a sufficiet umber of sellers (colleges/uiversities), there are ot a sufficiet umber of buyers (studets), ad barriers to etry (buildig a campus) are high. I such coditios, the market for higher educatio is uderserved. Accordigly, the govermet spurs supply by payig for colleges ad uiversities ad spurs demad by payig for studets. Accreditors determie who ca receive these fuds. All of this worked well for sixty years. Util, suddely, it does t. Ecoomists tell us that whe there are a sufficiet umber of buyers, a sufficiet umber of sellers, miimal barriers to market etry ad exit, ad sufficiet iformatio for buyers to make iformed purchases, markets efficietly allocate goods ad services. For cosumers, this meas that competitio is drivig the price of a good or service somewhere very close to the cost of delivery. However, because few markets are perfect, oe of the primary roles of govermet is either to fix or to create market imperfectios. Govermet might set miimum quality stadards that all providers must meet for example, establishig auto safety regulatios. Govermet might try to address exteralities that are ot captured i the price of a good for example, settig gas mileage regulatios or creatig a carbo tax. Govermet might break up 80 EDUCAUSEreview SEPTEMBER/OCTOBER 2013

11 Higher Educatio: New Models, New Rules moopolies ad cartels to esure that o suppliers have udue pricig power for example, ivestigatig Microsoft or ay mergers rejected uder the Sherma Atitrust Act. Govermet might protect moopolies to esure service provisio for example, protectig public utilities ad cable televisio cotracts. Govermet might choose to subsidize idustries where desired supply ad demad does ot exist for example, subsidizig higher educatio. Today, more tha two-thirds of colleges ad uiversities offer olie courses for credit (sufficiet sellers), ad more tha oe-third of studets have take a olie course for credit (sufficiet buyers). Further, the cost of digital cotet ad software has plummeted to the poit that olie-course delivery costs are radically cheaper tha face-toface delivery costs thereby removig ecoomic barriers to etry. The market The disicetive to award credit for other people s courses is the same disicetive that hardware ad software providers face whe decidig whether to allow compatibility with their products. for olie courses, ulike for face-toface courses, has become close to perfect (somethig the Iteret is very good at eablig), yet oly those providers approved uder the existig accreditatio structure are allowed to offer olie courses for credit. Not surprisigly, the savigs that studets ad taxpayers should be realizig from a lower cost of delivery are, as yet, urealized. Over 90 percet of accredited colleges ad uiversities price olie courses the same as or higher tha face-to-face courses. Why? I higher educatio, accreditatio together with the public subsidies to which it is tied prevets course-level price competitio. Accreditig bodies were built to evaluate istitutios ad degrees ot courses. To receive ay govermet subsidies directly or from studets, a higher educatio istitutio must be accredited. To be accredited, a provider must offer full degrees, ot idividual courses. Providers are judged o their iputs such as faculty credetials ad departmets rather tha o their outputs. Colleges ad uiversities have complete cotrol over their creditrecogitio policies. Fially, accreditors are staffed ad fiaced by the higher educatio istitutios themselves. This meas that it is difficult to disaggregate the higher educatio experiece because the college/uiversity must be a course budle, istitutios must 82 EDUCAUSEreview SEPTEMBER/OCTOBER 2013

12 have similar cost structures ad iputs, colleges ad uiversities ca dey credit from providers that are threateig their busiess model, ad there is little icetive to chage that model. To put it more sharply, if a MOOC or a course provider such as StraighterLie ( develops the world s best olie calculus course, a studet could ot access ay taxpayer subsidies to take that course. If the studet took the course ayway, he or she would have to persuade his/her istitutio to award credit for the course. The istitutio has a disicetive to do so because it wats the studet to take its courses at its prices. The disicetive to ubudle is the same disicetive faced by record compaies as per-sog dowloads replaced the te-sog album or by the cable idustry whe customers lobby for sigle-chael purchases. The disicetive to award credit for other people s courses is the same disicetive that hardware ad software providers face whe decidig whether to allow compatibility with their products. To get a sese of how much cheaper olie course delivery is tha face-toface delivery, cosider what it costs to deliver a olie Psychology 101 course to 30 studets. The course cotet ad the maagemet software are free or very cheap. The average per-course wage for a adjuct professor is uder $3,000. So, the professor s labor is about $100 per studet. Add i expeses for proctorig ad maagemet, ad the cost is still ulikely to get beyod about $200 per studet, per course. However, to avoid havig studets migrate from high-reveue face-to-face courses to low-reveue olie courses, most colleges ad uiversities price their olie courses the same as or higher tha their face-to-face courses. Whe tuitio, fees, ad subsidies are added together, istitutios receive $1,000 $3,000 per course. So this meas that colleges ad uiversities o matter their tax status profit from olie courses. These profits are used to subsidize other parts of a istitutio s budget. SEPTEMBER/OCTOBER 2013 EDUCAUSEreview 83

13 Higher Educatio: New Models, New Rules This substatial profit margi explais a umber of recet treds i higher educatio. First, the for-profit sector was the first to realize the profitability of drivig dow the cost of delivery while keepig prices the same. More recetly, public ad o-profit higher educatio istitutios have tured to outsourcig compaies that will quickly stad-up a olie program i exchage for percet of the reveue from that program. I effect, the istitutios ad the outsourcers, rather tha the studets ad taxpayers, are capturig the productivity ad the costsavig beefits of olie course delivery. This puts accreditors i a difficult positio. O the oe had, accreditors are beig asked by policy-makers to ecourage iovatio ad allow ew models to flourish. O the other had, their membership s profit margis for olie courses will be dramatically udermied if such models are formally embraced as part of higher educatio. The truth is that the curret accreditatio system was ot built to regulate a market where providers do ot require substatial fixed costs to offer credit-worthy courses ad where studets ca easily move from oe provider to aother. The curret accreditatio ad subsidy structure is ot suited to regulatig markets with perfect characteristics. But if the curret accreditatio system is t suited to regulatig olie courses, what might work? Here are a hadful of possibilities, orgaized from the least radical to the most disruptive: 1. Do othig. Sadly, the politics of higher educatio subsidy reform are such that paralysis may be the most likely outcome. Should this be the case, the umber of studets seekig traiig ad educatio opportuities outside of the curret accreditatio ad subsidy structure effectively forgoig the subsidies beig offered will cotiue to grow. Further, perverse policy outcomes will become icreasigly promiet such as the poorest studets beig forced to take the most expesive classes because they ca t afford the much lower fees of ew providers. 2. Establish accepted trasfer policy stadards for all. Whe a studet trasfers credit from oe istitutio to aother, the receivig college or uiversity kows little about the course for which it is awardig credit. The receivig istitutio does ot kow whether the course was olie or face-to-face, if idetity verificatio or ati-cheatig strategies were employed, the studet s grade relative to the grades of the rest of the studets i the class, or the iteral validity of the assessmet 84 EDUCAUSEreview SEPTEMBER/OCTOBER 2013

14 Higher Educatio: New Models, New Rules structure. Give rampat grade iflatio ad extesive cheatig, basic hygiee for trasfer could be adopted ad applied to all providers. Although meetig such stadards would be volutary, ay provider watig to export credits could be required to meet the stadards. 3. Create course-level accreditatio. Though oe-third of all studets trasfer before completio ad though credits are routiely imported from other sources for example, from other colleges/uiversities, StraighterLie, dual erollmet, the America Coucil o Educatio s College Credit Recommedatio Service (ACE CREDIT) there is o courselevel review process recogized by the U.S. Departmet of Educatio. Already ACE CREDIT ad the Natioal College Credit Recommedatio Service (Natioal CCRS) provide course-level review structures. These could be icluded i the patheo of recogized accreditors. Eve though a ecoomist would lobby for equal subsidizatio of all providers, a shrewd politicia might limit Title IV fudig to those colleges or uiversities accredited by existig bodies but might exted o Title IV beefits (e.g., eligibility for tax deductios, 529 pla spedig, Departmet of Labor grat programs) to those istitutios accredited uder a ew structure. 4. Detach federal fudig from olie courses. Because olie courses exhibit market characteristics that differ from those of face-to-face courses, federal subsidies could be dramatically reduced or elimiated for olie courses. Prices for courses would 86 EDUCAUSEreview SEPTEMBER/OCTOBER 2013

15 plummet. Ideally, such a strategy would be paired with trasfer requiremets such that the ewly usubsidized olie market could iteract with the subsidized face-toface market. 5. Cosolidate all subsidies ito a Lifelog Learig Accout. Higher educatio ews has bee domiated by the cogressioal debate over the rise i Stafford loa iterest rates. Despite all the had-wrigig, this policy chage impacts a miute percetage of the etire subsidy stream flowig to higher educatio. Util the etire subsidy stream is cosidered, idividual reforms are likely to do little to drive prices dow. Because the market has chaged, the subsidy structure should chage too. Today s higher educatio market resembles other efficiet markets such as food or housig more closely tha it re- sembles a market drive by scarcity. Though likely politically ifeasible, a more appropriate subsidy structure would be the cosolidatio of all subsidies ad the provisio of a sigle Lifelog Learig Accout to idividual studets. Socially desired adaptatios could easily be icluded to make the accouts more ecoomically progressive. Barely a day goes by without a oteworthy associatio, college/uiversity presidet, or academic pudit proclaimig that the higher educatio busiess model is broke. Ideed, prices caot cotiue to go up while sources of studet support cotiue to fall ad studets cotiue to have thousads of accredited ad uaccredited educatioal optios from which to choose. Already, a icreasig umber of studets are migratig to u-accreditable providers who ca offer credit pathways ito accredited higher educatio or directly ito employmet. Whether it is black market products durig wartime, speakeasies durig Prohibitio, or jitey cabs at the airport, whe a govermet-regulated market becomes too dysfuctioal, ew markets emerge. Policymakers, spurred by chagig patters of studet demad, will eed to decide whether to subsidize all of higher educatio or just accredited colleges ad uiversities Burck Smith. The text of this article is licesed uder the Creative Commos Attributio (by) 3.0 Uported Licese. Burck Smith (bsmith@ straighterlie.com) is the CEO ad fouder of StraighterLie. SEPTEMBER/OCTOBER 2013 EDUCAUSEreview 87