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7 Arguments Against "The Creeping Capitalist Takeover of Higher Education"

Continuing the conversation with Kevin Carey. 

April 10, 2019
 
 

If you read one long article this month about the future of higher education, then have that article be Kevin Carey’s The Creeping Capitalist Takeover of Higher Education.

The second article you should read is the 4/10/19 IHE piece What Kevin Carey Got Right (and Wrong).

Why all the fuss about the Carey article?  Including a piece that I co-wrote with Eddie Maloney called OPMs Are Losing the Battle for Hearts and Minds.

For my money, there is no smarter and better-informed analyst of higher education trends than Kevin Carey.  In the spirit of collegial debate and dialogue (as I may very well be wrong as well), I offer the following 7 constructive critiques:

#1 - Carey Writes:

"...there have been remarkable advances in online learning in the last decade. Nearly every prestigious college and university now offers multiple online degrees taught by skilled professors. And many of the courses are really good—engaging, rigorous, truly interactive.”

Actually, Kevin is not wrong here.  In fact, this sentence is totally 100 percent correct.

I’m very happy that Kevin recognizes the quality learning that is possible with online education.

What I wish is that the article had gone a bit deeper.  Carey talks about $107,484 online programs (USC’s online Master of Social Work) and $6,600 program (Georgia Tech’s online Masters in Computer Science) as analogous degree programs. 

But are they? 

Costs for online learning programs align with both brand and delivery method. 

A low-residency program with small classes, synchronous learning sessions, and individualized instruction by highly accomplished faculty will cost more than programs that have none of these attributes. 

The lesson is that not all online education is the same. It is important to make careful distinctions when judging quality and value.

#2 - Carey Writes:

"They are also a lot cheaper for universities to run. There are no buildings to maintain, no lawns to mow, no juice bars and lazy rivers to lure new students. While traditional courses are limited by the size of a lecture hall, online courses can accommodate thousands of people at a time.”

As anyone who has ever designed and run an online education program knows, quality does not come cheap. 

If a school wants to build an online program that is commensurate with its brand - and the quality of residential programs - then that institution must make a number of expensive up-front investments. 

Building a high-quality online program requires a team approach. Faculty, instructional designers, media educators, librarians, and other learning professionals need to work together. 

The cost for faculty and non-faculty educators to collaborate to create, run, support, and continuously improve online courses and programs is only one part of the expense. 

Online programs need to be marketed to find qualified students (which we will return to below). 

Students need to be closely supported throughout their studies.  As online programs tend to enroll working adults (and parents), the ongoing mentoring and coaching to help students persist to graduation is hugely important.  Support needs to be available 24/7. 

All of this is expensive.

The smaller an online program is, the less that these costs can be spread across all students.  There is this idea that universities are only building giant online programs. 

The reality is that higher education is full of small online programs that enroll less than 100 students per year.  Small programs offer great quality for students and a terrific teaching experience for faculty.

What they don’t do is kick-off tons of extra money.

#3- Carey Writes:

"So far, colleges have been more aggressive in launching online graduate programs. But there’s huge potential for undergraduate education, too, including hybrid programs that combine the best of in-person and virtual learning.”

Kevin is totally correct. But I think that he misses the real opportunity. 

What traditional schools could do is to use blended (hybrid) programs to increase campus utilization - therefore growing student throughput - and increasing the enrollments. 

Selective schools have been cautious in growing their student bodies as they don’t want to diminish quality.  (Or maybe harm their selectivity). 

Blended learning should allow the universities with the largest demand for undergraduate spots to increase the number of students that they enroll by moving towards briefer and more intense residential periods.  

Today, too many classrooms at selective universities sit empty for too many hours. Moving towards blended learning would enable the scheduling of classrooms (and residence halls) to be built around the “residential” periods of the hybrid programs. 

If selective schools can admit more students, then they can offer more financial aid to more people.  That would at least be a start in addressing the privilege imbalance - " more students from the top 1 percent than the bottom 60 percent” - that we see at some universities.

The problem is that this solution to move to blended learning for undergraduate education will only benefit a small number of schools, and a small number of learners. 

Most undergraduate education today is not residential.  The average college student is not an 18-22-year-old recent high school graduate, but a working parent. 

Community colleges educate a plurality of our undergraduate students. 

It is hard to imagine that we would save money creating high-quality blended programs for the vast majority of undergraduates who now attend public postsecondary institutions. 

The cheapest educational method we have is to put lots of students in a classroom with a single professor. 

And if we care about students persisting to graduation (with the 6-year graduation rate around 60 percent), then we will want to support students through their studies. Moving towards online learning increases the amount of student support needed. 

#4 - Carey Writes:

"And yet nearly every academic institution, from the Ivies to state university systems to liberal arts schools, has refused to pass even the tiniest fraction of the savings on to students. They charge online students the same astronomical prices they levy for the on-campus experience.”

Higher education, like every other mission-driven industry, does many things that - on their own - are difficult to justify financially. 

Universities run large numbers of degrees, courses, and programs because of the value that the organization places in having well-rounded students.  Not because they make money. 

Schools offer scholarships and financial aid to improve access. 

Research that is difficult to fund through external grants is funded by internal resources. 

The list goes on and on and on.

The way that universities pay for all the stuff that loses money is to try to do stuff that makes some money. 

The funds from an online master’s program - if that program makes money - helps to support the other work of the university. 

The only way that many liberal arts schools have been able to continue to offer undergraduate liberal arts programs have been by growing their portfolio of (largely online) masters programs. 

#6 - Carey Writes:

"This is because many colleges don’t actually run online programs themselves. They outsource much of the work to an obscure species of for-profit company that has figured out how to gouge students in new and creative ways. These companies are called online program managers, or OPMs….”

To respond to this sentence, we need to understand why universities partner with these companies.  There are many flavors of school/OPM partnerships, and many reasons why universities choose to go down this road, but I’ll highlight 3 reasons why a school will work with an OPM.  They are: 

A.      Risk (Or De-Risking)

B.      Opportunity Costs

D.      Capabilities

Before talking about each, we should go back to Kevin’s description of how OPM enabled online programs “gouge” students. 

Remember, students pay the same tuition whether or not the school has worked with an OPM on the online program.  If a student is being “gouged”, then they are being overcharged with all online programs.

Okay, back to the 3 reasons why schools work with OPMs.

The first is risk. Or de-risking. 

In the traditional OPM/school arrangement, the OPM assumes all the costs for program development, marketing, student support, technology, etc. etc.  If an online program fails to enroll enough students, then the OPM company loses money, not the school. 

Moreover, universities can start new online programs without raising or borrowing money, or pulling funds from one project or priority to another. 

The real knock against this model is that OPMs are offering expensive capital

Risk-averse schools can avoid making the hard choices that accompany the investment to start new online programs. 

De-risking online learning through OPM partnerships has perhaps been the most attractive proposition for many university leaders, but it shouldn’t be.  Universities need to figure out how to be a bit more comfortable with taking some risks.

The second reason that schools go with OPMs for online programs is opportunity costs.  This second reason is associated with de-risking, but it goes beyond financial. 

Schools have only a limited number of people who can work on educational programs.  Every hour of instructional design time that is spent on an online program is one less hour of instructional design time for a residential course. 

OPM enabled online programs also move online course development from a fixed set of university costs to a variable set of costs.  An OPM can more easily staff up to support a new online program, as they are spreading that cost across many programs. 

Universities, like most organizations, find it easier to grow than to shrink.  If the online program does not work, then they are stuck with expensive (fixed) costs in people and other infrastructure. 

Finally, there is the matter of capabilities.  Schools work with OPMs because online program management providers can do some things that most universities find difficult.  Chief among these challenges is marketing. 

The competition for students for master’s programs is fierce.  It is exceedingly difficult for most institutions, even brand name schools, to enroll master’s students into online programs outside a limited geography. 

Recruiting students from across the country and the world is hugely difficult.

An OPM allows a school to spin up new online programs with a minimal upfront investment, and then bring those programs to a scale where they can deliver revenues to the institution to fund other priorities. 

#7 - Carey Writes:

"What this means is that an innovation that should have been used to address inequality is serving to fuel it. Instead of students receiving a reasonably priced, quality online degree, universities are using them as cash cows while corporate middlemen hoover up the greater share of the profits.”

The best argument against an OPM is not to say that the model is inherently bad. 

Or that by their very nature, OPM enabled online programs are bad for students. 

The best anti-OPM argument is to find a way for a university to do for itself what an OPM can offer. 

Schools that develop internal OPM capabilities, and have some appetite for risk, are not paying the cost for expensive capital. 

These schools can keep the tuition revenues that would have gone to the OPM.  And these schools can avoid outsourcing core competencies, like instructional design.

It may be the case that universities who decide to build online programs will follow the model of Georgia Tech, and offer low-cost degrees at scale.  This decision, however, is independent of the decision of whether or not to work with an OPM. 

Nowadays, both Coursera and edX are looking much more like traditional OPMs than providers of free online courses.  Both the for-profit Coursera and the non-profit edX are moving rapidly into degree programs. 

These programs will be built with schools using some flavor of the OPM model, with Coursera and edX taking on both some of the risk and some of the work.  Coursera and edX programs will be built to scale to large numbers of students at relatively low tuition costs. 

It would be ironic that the very idea that Kevin so dislikes, the OPM model, serves to fuel a rapid growth of affordable online degree programs.

What else do you think needs to be said about The Creeping Capitalist Takeover of Higher Education?

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