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Higher Education: Turning a Painful Reality Into a Thriving Digital Business

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The Chronicle of Higher Education recently released an interactive tool, Tuition Over Time, 1999-2010, which utilizes data from the annual “Trends in College Pricing” reports from the College Board and allows users to compare tuitions and fees on an institution-by-institution basis back to 1999.

From the introduction to the College Board’s 2010 report:

The recession has pushed large numbers of people who would otherwise be working full-time at secure jobs into postsecondary education. . . . Trends in College Pricing 2010 describes the unwelcome increases in published college prices these circumstances have generated and adds the more encouraging information about how much students actually pay after considering increases in available grant aid.

The rise in prices is uncontested, and the National Center for Public Policy and Higher Education (NCPPHE) argues that, despite increases in financial aid, affordability of higher education is now in decline. According to Patrick M. Callan, NCPPHE President:

Student financial assistance from all these sources has increased to $45 billion, or an increase of 140% since 1991. But these increases have not been large enough to keep pace with the increased costs of college attendance, particularly not with tuition. . . . Between 1991 and 2005 Federal Pell Grant funding increased by 84%. But the average Pell Grant currently covers only 48% of tuition at these institutions, a decline in purchasing power despite increased federal investment.

Notwithstanding the complex socio-economic and institutional challenges this raises, the situation can be summarized in simpler terms through a business lens:

Increased social need for access to high-quality post-secondary education to support social well-being and global competitiveness + Declining affordability which further limits access to education and achievement, particularly for low-income populations = opportunity

Community colleges can play an important role in unlocking this opportunity, along with for-profit partners.

On October 5, the White House held its first “Summit on Community Colleges,” led by Dr. Jill Biden — wife of Vice President Joseph Biden and a community college instructor for 17 years. Opening remarks came from President Obama, who described his plan to foster an additional 5 million community college graduates by 2020 and emphasized the role that two-year institutions can play in developing the U.S. work force of the future. The President also introduced “Completion by Design,” a competitive grant program funded by the Bill & Melinda Gates Foundation designed to improve community college graduation rates by making a five-year, $35 million investment in multi-campus community college systems in nine target states with large low-income populations (Arizona, California, Florida, Georgia, Ohio, New York, North Carolina, Texas, and Washington).

Financial strategies for using community colleges for costs savings and as a stepping-stone through which to earn a four-year degree are well established. From a 2008 piece in the Community College Review entitled, “Save $80K by First Attending Community College“:

Families are turning towards the financially savvy decision of starting on the higher education path first at a two-year community college. Many universities, both public and private, have articulation agreements with local community colleges. Therefore, attending a community college for two years before transferring to a four-year institution can save significant amounts of money.

This bricks-and-mortar strategy gains further traction in the hands of digital entrepreneurs. Schools for online learning have adapted this concept by building out national networks that connect associates programs — which benefit from flexibility, geographical range, and cost efficiency in a digital environment — to four-year completion tracks in students’ locations, with pre-negotiated acceptance for those perform to acceptance criteria.

Take, for example, Ivy Bridge College, an online program offering a choice of six associate degree tracks with online-only, hybrid (online plus bricks-and-mortar), and transfer options:

The articulation agreements between Ivy Bridge College and our university partners establish clear pathways for your acceptance and maximize the transferability of your course credits to a first-rate four-year institution. Our partnerships include a diverse network of public and private colleges and universities, many of whom guarantee admittance for Ivy Bridge graduates. Typically, transferring to an institution with an articulation agreement in place will save you up to a full term on your way to graduation.

2+2 programs allow joint application to Ivy Bridge and a 4-year school. Their access and flexibility make them ideal if you’d like to complete your Bachelor’s degree but don’t yet have an Associate’s degree. Apply only once, enroll at Ivy Bridge, follow a specific academic pathway, and you can automatically transfer into the partner institution upon completion of your Associate’s degree.

Tuition per semester, full-time (12-16 credit hours) is $4,725.

The 30,000 foot message is not unique — when traditional systems become entrenched and intractable look for agile, Web-based businesses to surface solutions that circumvent complexities and provide practical and frequently profitable alternatives.

Comparatively speaking, a business-minded Web venture will lack historical and mission-focused context. But what’s the societal cost of not providing underserved populations with “me at the center” postsecondary learning opportunities that give them a chance to participate in an increasingly competitive global workforce?

And, what’s the ultimate cost to institutions that fail to meet these challenges with decisive action and innovation?

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About Alix Vance

Alexandra (Alix) Vance is Executive Director of GeoScienceWorld. She has been President of Architrave Consulting, Chief Operating Officer at The Center for Education Reform, Executive Director of Reference Publishing at CQ Press, and Vice President of Business Development at Ebook Library. She serves on the Editorial Board of Learned Publishing and has been a member of the Board of Directors of The Society for Scholarly Publishing and author of The Scholarly Kitchen. She is a painter, social worker, and mother of two.

Discussion

10 thoughts on “Higher Education: Turning a Painful Reality Into a Thriving Digital Business

  1. Alix,
    I’m having a hard time understanding your thesis. Are you arguing that “underserved populations” (define as you will) are better served with for-profit online colleges than non-profit community colleges?

    If you look at the interactive tool and break down the data based on profit status, non-profit community colleges are a much better deal compared to for-profit Web2.0-university-businesses.

    Posted by Phil Davis | Nov 1, 2010, 9:38 am
    • No, Phil, that’s not where I am coming from. I favor options—two year, four year, public, private, traditional, and non-traditional. My point is that many traditional institutions are “stuck” and may ultimately miss significant opportunities to provide high-value services. Where traditional businesses become entrenched they will lose market share to more agile businesses (often for profit). I question the wisdom of this (and certainly see parallels in the publishing industry).

      Posted by Alix Vance | Nov 1, 2010, 9:56 am
    • It makes sense to me. The on-line for-profit 2-year programs offer the flexibility of asynchronous instruction over the Community Colleges, plus they are almost as cheap, so much cheaper than 4-year Universities. So there are two steps to the argument. First, starting with a 2-year program saves a bundle. Second, for-profit on-line programs have a big niche here too. And let’s not forget that a lot of people only need or want a 2-year program.

      Posted by David Wojick | Nov 1, 2010, 10:07 am
  2. What’s the parallel for scholarly publishing? One advantage university presses have for faculty who publish their books with them is the prestige of their imprints and the guarantee they offer of peer review plus approval by a faculty editorial board. No commercial publisher can offer anything to compete with this.

    Posted by Sandy Thatcher | Nov 1, 2010, 11:04 am
    • How about on-line textbooks and course work, that on-line schools can subscribe to or buy? A lot of textbooks are written by faculty members. At the graduate level there may be a market for individual journal articles in bulk, as well as special issue compendia. If you have a leading scholar or department there may well be an educational product niche.

      Posted by David Wojick | Nov 1, 2010, 11:43 am
    • Sandy: You will get no arguments from me regarding the benefits of working with university presses. I was actually not thinking in terms of commercial versus non-commercial presses but more broadly of the “scholarly information industry” (including university presses and libraries, scientific societies, commercial scholarly presses, et al) in the context of encroachment and competition from commercial technology firms. A sweeping generality: “we” have imprimatur, grounding in mission, scholarly context (and more) but can also suffer from infrastructure/culture drag that sometimes limits our agility and inventiveness.

      Posted by Alix Vance | Nov 1, 2010, 12:16 pm
  3. The chief impediment to “agility and inventiveness” among university presses, unfortunately, is lack of capital resources. We might have avoided the “serials crisis” altogether if universities had invested in their presses more in the wake of WW II. Now it generally takes a grant from a foundation like Mellon to get anything really innovative done in university press publishing. In this respect, alas, universities do not act enough like corporations!

    Posted by Sandy Thatcher | Nov 1, 2010, 12:22 pm

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