A major revolution is occurring. It offers the best hope of cost control in almost every category of life. Online use of computer technology is already beginning to lower costs in education.
My fundamental point is this: The present education system costs, at all levels, are unsustainable. Few realize that our nation's delayed federal student loan bailout programs are an increasing long-term threat just as Fannie Mae/Feddie Mac were, and for the same reasons. You cannot keep shoveling out guaranteed loans when individual income projections cannot possibly afford to pay them back without dire future consequences.
The online education models, now being used by almost every school, will soon become clearly dominant. The historic model of a campus, dorms, buildings with far less than 100 percent round-the-clock usage, tenured professors paid high salaries but teaching few classes,and trying to cover that with massive advertising campaigns simply is unsustainable. Online education is a pure capitalist model.
The core fixed costs are significantly reduced (buildings and other overhead that must be paid regardless of whether you have one or 1,000 students), as well as mixed costs (those that are partially fixed but vary with the number, such as utility expense variation). Most online costs are variable.
Adjunct professors are generally not paid a guaranteed salary (unless negotiated separately) but rather per student. Think how this revolutionizes the process. Professors are actually accountable.
They also must become part of the marketing effort or will not get students. Many teach for more than one university. Ironically, you are more likely to be taught by someone with advanced degrees online than in large university classrooms run by graduate students.
The classrooms are wherever the student chooses to work and wherever the professor chooses to teach. It is a mobile classroom, with both participating from anywhere in the world. All good courses (part of accreditation process) require student interaction online with each other as well as the professor. Add Skype and increasing video innovations, and the traditional classroom is nearly obsolete.
In Congress it was frustrating because every time we increased Pell Grants or student loan funding, universities raised tuitions. The universities complained about their “rising costs” but resisted ways of controlling costs.
Education Chairman and current Speaker John Boehner understood exactly what he was doing when we began to open up higher education to competition.
Opponents fought us aggressively. As a member of the subcommittee that wrote the last two Higher Education Acts, we continued to push for competition and forcing change.
Old-line defenders in the Obama administration are pushing back in a variety of ways, such as going after private schools. Free markets actually develop new concepts and control costs. Changes, however, will not occur by accident, will mostly not be publicly understood and those who lead the fight will not get much credit (but will get opposition).
But without change forced by competition, we will just do a long fade to marginal relevancy.