Monday, April 08, 2013

What is college worth?

Twenty years ago, the argument for higher education, particularly a 4 year bachelor's degree, was pretty sound.  Private Universities averaged about $15k/year and state schools were about 1/2 of that number.

In the last 20 years a combination of factors - increased ease of student borrowing, low interest rates, explosive demand for higher education and aggressive college expansions - have pushed a college degree up from $40-$50k to nearly $250k at the most expensive schools. 

At this point it seems fair to ask -- is it worth the cost?

This is a difficult concept for many of us to comprehend. We grew up in an America where you did well in school to get into a good college to get a good job to have a 40 year career with a Fortune 500 company.  Well, the last part of that equation is now gone for good.  Today's children will have to constant reinvent themselves learning new skills throughout their career to stay relevant and employed. 

However, this doesn't necessarily mean college is outdated in this world.  In a world where 60% of graduates are unable to find work in their degree field and of those that can find work the average starting salary is just under $45k, a $250,000 bill seems out of line.

So, I've mentioned before the groundswell occurring in the higher education world that is moving at breakneck speed.  There are some really amazing companies that are working to bring higher education to everyone for free or some nominal cost.  Some states have begun taking the bold step of offering credit for massive open online classes. 

Here's my vision: If I were the governor of a small state that lacked a major state university (Rhode Island, Maine, the Dakotas, and Delaware come to mind) and if I was fighting population trends I'd have a plan.  First, I'd partner with a major MOOC like edX or Udacity and immediately offer credit for classes taken online if a student passes a proctored exam.  I'd set class prices at $495 per 3 credit hours for the first 3 years (which could be done as fast as the student can work - maybe he's aggressive and wants to finish in 18 mths -- go for it).  Now you'd probably have 30,000 students or so and they'd each have spent about $15,000 to get to this point.  For their Senior year I'd have these students come to our new campus where they'd finish their college career with a mix of traditional classes and internships at 3 different companies.  Hopefully, many of these kids would chose to live and work in my state after their senior year.  Maybe they'd start a business or maybe they'd just tell everyone what a great time they had in our state.  We'd be at the forefront of educating the next generation 21st century workers with 21st century skills using 21st century tools. 

As this model grew in popularity the major institutions would see applications start to decline.  Pretty soon the best and brightest wouldn't be fighting to get into second rate schools.  This lower demand would lead to more competitive college pricing.  Soon a 4 yr degree might again cost $50k-$100k.  Everybody wins.

Having said all of this, if one of my kids gets into MIT or Princeton you know I'm writing a big fat check so I'm all talk :)

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