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An EdTech Response to 'What Should a Year of College Cost?'
June 6, 2012 - 9:00pm

Dean Dad kicked off a great discussion in his column yesterday asking "What Should a Year of College Cost?". His post, and the dialogue that followed, got me thinking about this question from an academic technology perspective.

Dean Dad seems to not really be asking about costs but about prices. How much should a year of college be priced? Prices and costs are very different things, as prices may or may not have very little to do with costs (fixed or variable). Buy a bottle of vodka at a Miami nightclub and you will pay a 5000% price premium.  Prices provide information about both what the seller is willing to charge and what the buyer is willing to pay.  

And it is a mistake to talk about a "tuition price", as the reality is that there are many different prices for a year of college. Like an airline ticket, the same year of college at the same institution will cost different people different amounts.

How can a "technology perspective" help illuminate Dean Dad's question? The answer is that prices, at base, reflect dynamics of supply and demand. And technology can influence both these factors. We are accustomed to thinking of technology as a cost, one that drives up tuition prices. This view is incomplete. Technology can, and should, lower tuition prices by providing positive impacts on the demand and the supply of a year of post-secondary education.

Supply: Technology is one component of raising the productivity of higher education. If we can increase the number of students enrolled faster than increasing the costs to educate these students then we can raise productivity. Increasing enrollments, however, is difficult with a fixed supply of classroom and dorm space. Building new classrooms and dorms is expensive. I believe that every institution of higher education (including the most selective institutions) should commit to increasing our supply (number of applicants we accept) by 20 percent over the next four years. If we are worried about falling in the rankings because we are "less selective" then we should find some way to overcome this fear. The key to increasing the number of students without building more space, or sacrificing any quality, is to strategically and systematically invest in blended and online learning.   The cost of educating each additional student will decline, and this productivity jump should result in lower tuition prices for everyone.  (Not to mention the savings that can result through increased retention when blended and online options become available).

Demand: But if every college and university increased the number of accepted students by 20% wouldn't we run out of students? Isn't the pie of available students somehow fixed? For selective institutions this is clearly not an issue. If your acceptance rate is less than 15% (or 25% or even 33%) you can feel safe in increasing the number of admitted applicants without sacrificing quality one bit. For higher education as a whole it seems obvious (at least to me) that if we could raise productivity and therefore lower tuition that the demand would increase. Our problem in public higher education is not too few applicants but too many. Lowering tuition prices by raising productivity is, however, only one strategy. There is a huge unmet demand for specialized programs and course delivery methods that meet the needs of working adults and other non-traditional learners. Today the for-profits are working to meet this demand. Non-profit higher ed institutions should compete with the for-profits in every market.

The real question that Dean Dad, and all of us, should be asking is "how can we increase the productivity of our institutions?".

Any thoughts on this question?

 

 

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