The coming 20+ year disruption in Higher Education

This is a post on the problems & solutions in higher education from someone clearly not qualified to make those observations. The only information I have is the 79 pitches from entrepreneurs large and small who are all trying to disrupt Higher Education from around the world. Besides that over 500+ articles, blog posts & discussions with several professors at the top colleges in the world.

The Higher Education market is largely a US dominated one. With over 4500 private, public and semi-public colleges and universities, this market is over $475 Billion. Over 9% of US GDP and close to $1.3 Trillion (pdf) is spent on education overall. While there is more spent on K-12 education, the higher ed market has more spend per student.

Most of the money spent by students in on tuition. Over 57% of the higher ed spend is on tuition. This goes towards educators, libraries, textbooks, facilities, etc.

The average 4 year college cost is reaching $30K+ per year for private colleges. Given that over 70% of US students end up with over $30K in debt after college, this clearly unsustainable.

With the advent of MOOC (Massive Online Open Courses) I personally believe it is only a matter of time before many of the 4500 colleges shut down. I personally think 50% of colleges in the US will close down in 10+ years. Similar for Indian colleges – over 50% of colleges in India will shut down in 20 years.

Most private colleges make money from endowments, grants, and then from tuition – in that order. Most of the moneyed institutions have “rich” students who then become alumni and donate to the college, many of the smaller colleges dont.

The average private college takes 2000+ students and charges about $30K per student. Lets say that is $60 Million per year.

Now imagine that the private college wants to take 20,000 students (online) instead. [They could also take 100,000 students, since nothing is going to stop them from doing that]. All things being equal and factoring in inflation, and the cost to run the university being largely the same, they would be able to charge $3K per student per year and still do well.

It is not a dream. It is going to happen. In 10-20 years, or likely sooner, but it is going to happen.

Would you rather get a degree from MIT and be taught by the top professor at MIT or a local college professor who may not have the level of depth and knowledge about the subject as the MIT professor?

You can do this from Saudi Arabia, Australia and India. That’s because even the folks in Newton, Mass, who live <100 Miles from MIT will be doing the same.

Most learning is going online. In a massive way. Higher education is as well.

Now, I understand the concerns.

A) The Internet do not replace the interaction you get in a face-to-face setting.

B) How can you build relationships with your students and network with them – which is the biggest value of a college 10 years hence? and

C) Online learning is still largely unproven.

All that will get itself sorted out with other offerings to supplement the MOOC.

In the future you will have interactions (office hours) remotely managed by professors.

In the future you will learn from your peers together as much as you will from the professor – which will build the relationships.

In the future you will have more teaching aids and tools to help you sort, identify and collate your learning better than textbooks.

That future is less than 10 years away.

I am going to shift gears and now try to talk to future parents.

What should you do? What are the things you can do to make sure your kids are going to be successful? This is primarily if your kids are between 0-10 years old.

First and (I cannot understate this) let your kids find their way.

If you can make the investment, buy them a tablet and let them learn stuff using the machine.

If you can get them to follow structure courses online (for older kids), I’d recommend Khan academy and other sites like those.

We dont have Television at home, but I am not convinced that’s the right approach for everyone. If you can get rid of the television, do it. I’d highly recommend it.

Kids will play more games than use the tablet for useful stuff initially but that novelty wears off in a few years. The % of core gamers and those that are addicted to gaming is still small. I am not saying ignore it, but be less worried about that than no exposure to games at all.

I dont think most parents will give up the school environment all together, since they need the kids to be “someplace” other than home when they head to work, but I would focus a lot less on grades at school.

In fact, grades will become irrelevant in 15 years, increasingly replaced by “show me what you did” instead of “how did you learn”. Why?

If you are MIT or Stanford and you want 20K students to take your course, you are likely to get less picky a decade from now. 

[Side note: Similar to startups these days, when being evaluated by investors, the focus is on product & traction, not on idea, grades tell me how you studied, not what you learnt].

The goal of these colleges will go away from “exclusivity for some” to “knowledge for all” very soon. That’s the direction they are all heading. Will MIT as an institution or the lecture halls go away? – not likely. They will be the purview of the few rich kids who can spend $100K per year to be housed in 5 star luxury comforts. For the rest of us, a computer and an internet connection will suffice.

This next paragraph is going to unsettle a few folks, but hear my argument.

Focus on spending money *now* to help your kids, than saving money for the future. Most parents I know end up trying to save for education – by putting money in 529 plans, education savings plans and the like. I would use as much money you plan to save for the future into their education right now. Give them any edge they can get now and you will end up spending 1/3rd of what you originally planned for later.

That’s because the cost of higher education is going to drop dramatically for most students.

So who will hurt from these disruptions?

1. University deans, college presidents and the endowment chairs, who make over $1 Million per year.

2. Smaller unknown colleges who will see their enrollments drop dramatically and will likely have to shut down.

3. 529 plan administrators.

For the rest of us, quality higher education is going to be highly accessible.

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15 thoughts on “The coming 20+ year disruption in Higher Education”

  1. Bang on! It is just a matter of time. And I am doing what you have suggested. My kids have learnt to go to Khan Academy etc, if they have any doubts in science, maths etc. and they find the explanation better than what they can get in classes!!

    1. Could you pls share how old are your kids? I have a 9 year old son whom I want to introduce to Khan academy as well. Not sure if there is enough content for that age group on the academy.. That s a task I have to check out the content..

      1. Mukesh,

        I should have said kid (I have two kids — one 9, another 14) as I had the 14 year old in mind. She uses Khan Academy for science and maths. For the 9 year old, it could be a little early, but I encourage my 9 year old to search google for information, learn word meanings etc.

      2. Oh cool.. I do encourage my 9 year old to use google and wikipedia as well.. I also plan to open an account in quora for him as well so that he can post his queries there and see what answers he gets (will be monitored though)..

  2. The moment employers start opting for people with online degrees (basically treated on par) is the time the disruption will gather pace. This is a very interesting (and potentially lucrative) space. If you are good, you are ready to go… no matter where you come from.

  3. Reblogged this on CODES OF LIFE and commented:
    Well said, Mukund! MOOCs are the first step forward to a revolution in education. The best possible way to evaluate someone’s learning in such a disruptive market is to prove by doing; collaborating; executing an idea and not by grades. Current challenge in MOOCs & the Universities/Initiatives offering them lie in accrediting the knowledge gained by a student – who are used to a piece of paper defining their education/grades. Even if the students/learners are not keen on obtaining grades this becomes a necessity because several prospective employer dismiss this as hobby learning. Just like educators; if the employers are coming to terms with this shift in the learning process and accept MOOCs.. it will be a win-win to all involved.

    Looking forward to a world of learning; where curiosity is well-fed; ideas are collaborated & executed; learning is accredited by performance; and the outcome accepted by the industry. Nithya.

  4. I personally believe MOOC will impact talent development within organisations. It is an ideal way to update/upgrade ones knowledge on core skills to perform, contribute and collaborate better.

    Big organisations, should jump right into it and start developing MOOCs within their organisation in partnership with Universities. I can see this happening sooner than the future of transformational educational system.

  5. Thanks Mukund for the great post. I have also thought about this disruption in the making and personally think that the root cause of the higher education problem is the reducing relevancy of the education provided in this course, that leads to lack of employment to all, while at the same time escalating student debt.

    I did a post about the same and my version of the future of higher Ed @ http://rmukeshgupta.wordpress.com/2013/09/11/the-real-higher-education-challenge/

    What do you think about these solutions, both from the perspective of the colleges or universities..

  6. The best thing i love about online education is the efficiency and comfort. I took up the task of learning statistics early this year. Was able to complete almost a semester’s worth of material in around 5 days (10 hours of study a day) including all problems / quizzes etc. Felt very confident. And then i was hooked. I still devote around 5 – 6 hours a week on online learning. This has the power to literally “accelerate” the entire human civilization.

  7. http://academicearth.org/online-college-courses/

    Though most online courses on statistics are more geared towards application. It is meant for people from other fields who are interested in knowing applied statistics. Your neice will it at a more deeper mathematical level since she is specializing in it. Currently, many advanced science courses are not available online (with an exception of computer science).

  8. Nice piece Mukund.

    Before we started DeZyre, we did an offline survey to gauge how serious is this claim that “students cant ask doubts in an online class”. So we sat through over 20 offline classes and found that less than 10% of the class asked any doubts. They mostly don’t due to peer perception issues.

    In the average DeZyre online class, over 30% of students ask doubts on our online forum.

    Another myth proven wrong!

    In the not too distant future, we believe that college degrees will be necessary but not sufficient to get a good job. Recruiters are going to ask you “What technical skills” do you have. These technical skills can only be taught by industry professionals outside the rigidity of a university curriculum. Online platforms are the only way to scale access to these industry faculty.

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