The Cost of Higher Education

One of the predictable outcomes of the technology revolution is that the cost of providing education should gradually fall to zero. In time, the marginal cost of providing most aspects of education, especially "higher education," should be negligible.

Why?

First of all, the body of knowledge that is imparted in higher education grows only glacially. From year to year, you can think of it as almost constant. We also know a lot about how people learn and we know that people can learn from using computers, ebooks, and the like. These things are cheap and getting cheaper.

Does it help to have classrooms? Yes, but only marginally. Often computer programs and well crafted films can provide better instruction than the classroom. Businesses, like the Teaching Company, have exploited the idea that courses on CDs can teach as effectively, perhaps more effectively, than herding students into classrooms.

We know that the really great teachers spend less and less time in the classroom of American higher education institutions. This is a blanket recognition that the classroom may not be a high priority for American higher education institutions. Indeed, we know that classroom instruction has not been a major priority of the so-called elite higher education institutions for many years.

We know that one-on-one mentorship can help in higher education. But, over time, there is less and less one-on-one mentorship in American higher education, especially at elite schools. The more "elite" the school, the less likely a student will ever receive any educational mentoring in the school.

So, if you think about the higher education that students actually receive in the modern American institutions of higher education, the vast bulk of that education can be produced at virtually no cost and made available to the masses. Indeed, some of this is already being done -- AcademicEarth.com is just such an example.

Why, then, is the cost of higher education spiraling out of control in America? This is a question that is rarely asked. Most of the discussion of the economics of higher education focuses on how to generate more taxpayer funding for higher education or how to provide more loan funding for students who face the massive costs of modern American higher education. But, the really interesting question is why, if providing the actual education costs little or nothing, is the cost of higher education exploding beyond the cost of producing anything else in the economy?

The answer is that modern higher education is increasingly about providing three things:

1) an active social environment that students can really enjoy -- including fitness centers, semesters in exotic foreign locations, elimination of hard, core curriculum in favor of "relevant" topics, almost complete abandonment of science and mathematics, dramatic expansion in semi-professional and pre-professional athletic programs, and the ascendancy of "soft" business majors and "inter-disciplinary curricula." This means that higher education has become more fun, less demanding, and less effective;

2) political education -- provided through centers for this and centers for that focusing on race, ethnic, gender, environment. These centers, which are extremely costly, often provide misinformation as opposed to education and are usually staffed by people whose academic credentials would make them ineligible to be faculty members in any normal academic department, even at non-elite schools. A strong pro-government orientation toward attacking alleged ills of society dovetails neatly with higher education's support for more taxpayer funding. It may not be educational, but it is useful to those who run these institutions, who spend enormous hours and dollars lobbying various levels of government for more funding;

3) certification -- the idea that a degree conveys the message that a student possessing the degree has a minimum level of education. This idea is gradually losing traction as businesses across America have discovered that degrees even from elite institutions do not mean literacy, competency or work ethic. Businesses have become much more skeptical about the qualifications possessed by the graduates of the American higher education system.

So, while American higher education institutions do a bang up job of providing the first two items above, the "certification" is increasingly seen as a hollow shell.

In short, higher education is less and less about education. It is about social and political indoctrination and unlike education, social and political indoctrination is a very expensive proposition. It is not cheap to provide a "Club-Med" environment on a University campus and to constantly update it with more and more expensive features. As the "education model" is supplanted by the "resort model" in higher education, it becomes increasingly expensive to compete with other "resorts."

If you want to develop your social skills and learn networking skills, find your way to an elite higher education institution. But, if you want an education, go online. The former path is absurdly expensive, while the latter path is almost costless.

Given these dynamics, the future is pretty easy to read. Education, real education, will ultimately be provided in an inexpensive fashion by modern technology and what currently passes for higher education will continue to morph into an elaborate, expensive, four year form of a summer vacation with mostly political content.

Employers will eventually ignore the "certification" conveyed by higher education institutions, as the value of such certification withers away. Instead employers will find other ways to ascertain the skills and qualifications of "educated" employees. Higher education will never lose its charm, but it will, in time, lose its relevance as the costs continue to explode beyond its value.

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