Governor Rick Perry of Texas recently challenged educators to offer degrees costing $10,000 (A College Degree for $10,000). “He has lost his damned mind!” I thought. Reflecting on this possibility, I searched for statistics on revenue and expenditures. I found data in the Mini-Digest of Education Statistics (NCES Mini-Digest).
The following abbreviated data from 2006-07 suggest varying revenues and expenditures by institutional type:
â— Public Institutions: State appropriations were the largest source of revenue at 24 % of total. Expenditures totaled $239 billion, $25,130 per full-time student. The largest expenditure was instruction, which accounted for 28 %. The next largest expenditure was research, which accounted for 10 %.
â— Private (not-for-profit) Institutions: They received 31 % of revenue from investment return. Expenditures totaled $125 billion, $42,060 per full-time student. Not-for-profit institutions’ largest expenditure was instruction, which accounted for 33 %. The next largest expenditure was institutional support, which accounted for 14 %.
â— Private (for-profit) Institutions: Private (for-profit) 4-year and 2-year institutions received 88 % of their revenue from student tuition and fees. Expenditures totaled $12 billion, $12,880 per full-time student. Their largest expenditure was student services, academic and institutional support, which accounted for 64 %. The next largest category was instruction, which accounted for 24 %.
Public institutions rely on state appropriations to exist, while institutions in the private sector found other means of earning revenue. This suggests private (for-profit) institutions earn more from students via tuition and fees and spend less per student than other institution types on instruction.
I have residence life experience working in the public and private (for-profit) sectors. Within the public sector, we usually have a director, associate director, assistant director, office staff and professional full-time managers of the residence halls. In private housing, we had a director, an assistant director and student staff managing the halls. I wore several hats in the private sector: student development, supervisor, maintenance, judicial, marketing, housing assignments and custodial. Being “business-minded” was instilled in employees, a quality often lacking in the public sector. I still remember my director from the private sector saying, “You can't play if students don't pay.” Around leasing time this was her reminder that we needed students to reapply for housing.
This may startle some, but Perry's “challenge” could soon become reality. Students may not pay 10K for a Bachelor’s degree but if managed correctly, they could only cost the state 10k.
In Timothy Feriss' 4 Hour Workweek, he discusses the idea of “Automation,” meaning building a sustainable and automatic stream of income. It includes several techniques like drop-shipping, Google Adwords and Adsense, and outsourcing, all techniques a university could use (Timothy Feriss: Outsourcing Life). In some cases it has already begun.
The private (for-profit) sector residence life program I worked for was outsourced to a third party housing provider that leased land from a university. The company built and maintained the buildings, operating the program with its own employees. This cost the state nothing and, instead, put money in the state’s pockets (if a state can have such things).
Still not a believer? Think of this. Drop shipping is a product delivery method where the seller accepts payment for an order, but the customer receives the product directly from the manufacturer. In these arrangements, the retailer is the middleman between the manufacturer and the customer (Wise Geek). Think of online universities and of the professors who teach part-time from their homes. The state could rid itself of “brick and mortar” classrooms and arrange a teaching contract between the professor and the students, allowing the professor to decide where, when and how learning would take place. Cost to the state? Nothing.
Regarding Google “adwords,” where companies run ads on Google's site, university websites attract a substantial amount of web traffic. Universities could negotiate ad space on their website for items relevant to students (i.e. fashion merchandisers, booksellers, and travel companies).
Governor Perry stated that the 10k dollars would include textbooks. According to The College Board, the average student spends over $1000 toward textbooks. This price could be mitigated by doing away with them. Touro University International (now known as Trident University International, my alma mater) doesn't use textbooks. They utilize scholarly articles and case studies to produce learning, following the Robust Learning Model (Robust Learning Model).
Anything is possible but while a $10,000 degree is a good idea, let's get real. Online education is just starting to gain weight, now comes the generic degree? Who would want one? No, a better question is, who would accept them?
Terrance Bradford-Muhammad is a student affairs professional currently pursuing his PhD from the California Institute of Integral Studies. His research interests include the transformation of the U.S. higher education system, student retention, communication ethics, and Progressive Islam. Check out his blog at www.bradmuhasblog.com