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Why Not Reform Higher Education?

July 13, 2008

“At private US four-year institutions, the ‘price’ of college rose to an average of $30,367 for the 2006-07 school year – up 208 percent over the last two decades. At public four-year institutions, the rise was almost 216 percent. Overall inflation in that period? Consumer prices rose about 84 percent.”

Neil McCluskey, New York Post, May 30, 2007

The cost of a college education over twenty years increased 208% compared to an 84% increase for consumer prices? What’s going on here?

“Business as usual” is what’s going on. Nothing has changed in the 19th business model of higher education. Students are more or less educated in a twelve or thirteen year process beginning at age 5. If they come from middle class families whose parents work for businesses or in white-collar jobs, these children are expected to go to college and earn a baccalaureate degree. Even those who get a break on college tuition and some other costs can expect to borrow $80,000 to $100,000 over four or five years while Judy or Jim accumulate a sufficient number of academic credits to earn a degree.

An investment of $100,000 and deferment of entry into the job market by five years has consequences. A college education that costs that much in time and treasure is not a good economic investment relative to learning a technical skill and entering the workforce one or two years out of high school. “Another Way to Win” is the title of a book by two Penn State professors who know the score and argue that 50% of students in college today should forget a four-year baccalaureate degree and find an institution that credentials them to perform highly skilled technical tasks.

Pittsburgh Technical Institute not Carnegie Mellon University; Strayer not Colorado University; Johnson and Wales not Columbia College.

So some adjustment in the priorities of hundreds of thousands of college students could push higher education towards reform. The other push for reform could come from the U.S. Department of Education. Margaret Spellings, Sara Martinez Tucker and Vicki Schray should listen to their colleague, George Miller, who thinks that testing is good, but changing how colleges are accredited is also good.

At the American Enterprise Institute in September 2007, George Miller—former member of the Secretary’s Commission on the Future of Higher Education, financial expert, and former chairman of the Board of Regents of the University of Texas—set forth a plan for what he called “prospective accreditation.”

Forget waiting in line for ten years to attain national or regional accreditation, simply submit audited financial statements to FSA, the division at the Department of Education that manages Title IV tuition assistance and student loan programs. If they pass muster, you’re in business and can sell your education products to students who may access federal loans to pay for tuition.

What would that do?

Suddenly higher education would become bankable. Investment money would stream into programs to start new colleges and universities, especially ones that use a 21st century business model such as the business models followed by proprietary companies such as Capella University, Walden, University of Phoenix and American Public Education.

In less than a decade the number of colleges competing for student dollars would burgeon by 1,000 new institutions and the fun would begin. Many of those colleges would offer programs to acquire practical skills others would appeal to college graduates with specialized programs that credential working adults to shift careers or earn more income in their current employment.

Few, if any, of these new institutions would have classrooms. None will offer a campus environment. All would feature low overhead, professional and focused training, offered at night or via the Internet, programs leading to specific outcomes. And, of yes, none would require Ph.D’s. Successful businessmen would teach entrepreneurship, technicians would teach aspiring technicians without needing to earn the baccalaureate degree.

What could be better for American higher education, taxpayers and students?

What could be worse for the education Establishment?

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