The New Higher Education Paradox

I’d like you, for a moment, to take yourself back to your high school days. Recreate in your mind what it was like, even down to the smell. Okay, maybe not the smell... but picture this:

You are sifting through university pamphlets, or maybe even perusing college websites in the guidance counselor’s office. Your excitement builds as you happily daydream about being free from mom and dad, meeting new people, and even learning a thing or two.

While meeting with your guidance counselor, you may recall being advised on selecting which colleges to apply. It is likely that the one major piece of advice that they extolled was “apply to a few matches, a reach, and a safety school”.



Easy enough, right?


Well, not anymore. 
Not often is it considered how you plan on paying for this education after you’ve graduated or whether you should even attend a physical college at all. Had your guidance counselor done specific research tailored for you on the job market or whether there will even be jobs that even exist for intended major after graduation? Unlikely. 


So to begin, here are a few statistics about typical four-year colleges and student loan debt:

• National student loan debt has reached one Trillion dollars.
• College tuition has increased at double the rate of inflation for the past 30 years. (Education is 4x more expensive than in 1980)
• There are 30% more graduates living at home after college than there were only four years ago.
• If you have a child now, the future cost of just ONE year of attending a private university will be roughly $130k.

The essence of this point is that it is time to get off this train and build a new vehicle for education.
We are living at a time where technology & information intersect education & value, what some are calling the “education bubble”. Most bubbles in history occur when something is overvalued and intensely believed in (i.e. real estate, tech in late 90s, etc.). However, the only difference between real estate in 2006 and higher education today is that instead of subprime mortgage lenders, we have college administrators touting the solid investment to be had. The jobs most students enrolling in college are expecting out of college simply do not exist, especially if that student is not pursuing degrees in engineering or pre-medical routes.

What does this mean?

Currently, there is an arbitrage that is simply waiting for a massive breakdown in the system, as we are witnessing just at this moment with skyrocketing student loan debt, unemployment, and future cost of attending university.
What will happen next?

There will soon be a disruption in university education for the benefit of not just our youth, but everyone globally, and it will not be solved by our government .

The present belief that learning at a physical university is the only way to be successful in life will soon become the new paradox:




If we were to continue our path, student loan debt would have a negative multiplier effect on families for generations to come. As college tuition increases and new parents must save up for their children’s education while trying to pay off their own.

As we are living in the information age, where vast knowledge can readily be obtained through simple WiFi access, it doesn’t make much sense to shell out $200k for lectures and a college “experience”. Give me $200k and I will throw you some unforgettable parties.

The only issue there is with internet education is that it does not have, essentially, the snob appeal that going to a private four year institution has given many generations (I’ll admit I remain proud of my Johns Hopkins education, but mainly because it is so difficult to get in, not because I learned $200k worth of knowledge).

So the question is, how do we change this and fix almost every current and future issue we have with the college system?

First, let’s take a look at the current system that is in place:
Employers, and in turn, parents and students deem that a four-year college education is necessary for be considered for most decent to high paying jobs. Equally as important -  the government believes this as well. US Secretary of Education, Arne Duncan, is quoted saying “We have to educate our way to a better economy. The only way we’ll get to there from here is through many more students not just graduating high school but going to college.” he is also quoted saying “Please apply for our financial aid. We want to give you money. There’s lots of money out there for you” . He seems to mean well in his intentions to get everyone educated, but is limiting the solution to traditional routes, and leaving out an opportunity for education innovation. The answer is not saddling our youth with a life-long debt right out of the gates, nor is it to promote everyone to attend an institution which may not provide value to them. To me, this is like trying to open a new door lock with your old keys over and over, when really a change of keys is really what is needed.

Ok, moving on. So essentially, the bachelor’s degree and the school one attended serves potential employers as a risk barometer. The better the college, the lower supposed risk one is taking in hiring the candidate. Currently, the majority of well respected schools are private as well as unjustifiably expensive, while the top public schools usually carry a similar price tag. 

To help poor and middle class students attend many colleges, the government may issue grants or loans to help ease the burden, which in turn signals to those colleges to increase tuition. If the government stops issuing grants and loans, those colleges may decide to keep tuition at this level, as they will still retain the wealthy students that apply every year, leaving the rest to attend a lower costing and subsequently less desirable institution. However, if schools lower tuition, that could risk them losing the prestige by becoming fiscally devalued compared to other top schools.

A Solution to the Madness: A Mass Shift in Perspective 

The reason most Americans will not stop going to college, no matter the price is because this system is in place and the snob value of attending is still relevant. We as music listeners didn’t go straight from CDs to MP3s, did we? The same transition and weaning will occur in education. The change will be gradual, and we needed it a decade ago.

This change will be achieved steadily by offering accredited and comprehensive online classes on a platform taught by world-class professors while giving students the option of pro-rating the rest of the credits. The professor teaching the online class can receive royalties from the larger amount of people signing up for the online class than would attend the class in person. Also, depending on the design of class, like Stanford’s online Computer Programming and Artificial Intelligence courses, the institution can make a tremendous amount of money on the back-end by placing the top students in jobs once they finish. Not to mention many of these courses could be tracked by analytics and even be optionally transparent in displaying students progress and performance. By lowering the cost and providing to many, we will have solved one major issue of scarcity and price barrier, when educating our youth. This serves as a real leveled playing field.


It is also very important to initiate this trend starting with the top institutions. Once you’ve enabled the world’s best professors with an accredited global teaching platform that is recognized by other top institutions, others will have no choice but to follow suit.

In order to make a systemic change in the university system, we also must be able to recognize where universities have a right to charge a premium. This would be in the use of labs, dorms, and proctoring of tests, all of which contribute and facilitate the notion of online learning. Beyond these amenities and environments, there must be the option for students to take as many as half of their college courses online, which could initially cut down student loan borrowing by 30%. Eventually, this could lead to 80-100% of courses to be digital, leaving college campuses to serve as a place for auxiliary & physical learning, an incubator for an academic environment, and a physical place to proctor tests.



After this initial quantum leap, when the idea of taking college credits online from top institutions (Stanford, MIT, Harvard, etc.) becomes more naturally accepted, we will see more of a transition from classroom to web. But I guarantee you this, it all won’t happen in one fell swoop. The technology of world-class online learning must be structured so that the universities can see that it will be beneficial for them in showcasing their talent as well as padding their bottom lines. The top universities are perfect place to start this movement, because they will see the most benefit, all the while lowering their tuition to attend, thus attracting the best and brightest because of it. Colleges all across the country will see this trend and have to adapt to this “elite” new way of learning. To break this down simply: You tend to feel stupid standing up at a sporting event or concert, when the people in front of you are sitting comfortably with an equally good view, but if they are to stand, then you too must stand as well. This is how I view colleges in America. Once we show the top schools, who are “sitting courtside”, that the view is pretty damn good and even more comfortable when seated, it allows for other bloated institutions to do the same thing.




I believe the time is now to adapt by using technology to fix some of our most pressing issues in America. Rather than sending our youth into a lifetime of indentured servitude, let’s start by developing effective and affordable ways of getting a college degree.


Check out this NYTimes article for some more info on the current student loan debt crisis:
http://www.nytimes.com/2012/05/13/business/student-loans-weighing-down-a-generation-with-heavy-debt.html?pagewanted=all