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Thread: Who will be the last to pay a quarter of a million dollars for a college education?

  1. #1
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    Default Who will be the last to pay a quarter of a million dollars for a college education?

    This is a reposting of a contribution I made to the Medallion Learning blog and my own personal education blog.

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    At the nation’s most expensive college, a four-year education now costs upwards of a quarter of a million dollars (Northeastern, we’re looking at you). Debates about the value of this education continue to rage. Most recently, the 2014 PayScale College ROI Report (1) allows readers to rank nearly 900 undergraduate institutions based on metrics including 20 year net ROI and annual ROI.

    Let’s set aside for a moment the necessary simplifications embedded in the report’s methodology. Harvey Mudd College tops the 20 year net ROI ranking at just shy of one million dollars. At nearly 12%, the Georgia Institute of Technology leads the way on annual ROI. At the other end of the spectrum, Shaw University trails the 20 year net ROI pack at NEGATIVE $156,000 and the annual ROI list at -11.9%. That’s if you graduate—only a quarter of its students do.

    Overall, the average 20 year net ROI for the ~900 schools comes in at about $230,000 with an ROI a shade less than 5% a year. Sadly, only half of all students embarking on this expensive path even graduate. Imagine that you’re one of these fortunate students. Just what is it that you’re getting?

    The Lumina Foundation, working with Gallup, tackled that question as part of its 2013 study, “What America Needs to Know About Higher Education Redesign” (2). The message from colleges and universities to its students rings positive—96% of chief academic officers at these institutions assert extreme or somewhat confidence “in their institution’s ability to prepare students for success in the workforce.”

    Great news! Or is it? What do those doing the hiring think? That storm cloud rolling in brings the opinion of business leaders—only 11% strongly agree that “today’s college graduates have the skills and competencies that their business needs.”

    Clearly, a disconnect exists between what colleges and universities offer and what employers need. What’s a poor student to do? Six figures is a lot to pay for a degree that doesn’t deliver … but don’t try getting a white collar job without one.

    While it’s fair to be skeptical of Lumina’s finding that only 9% of business leaders claim “where the candidate received their degree is very important in hiring decisions” (sorry, Harvard; bad news MIT; you’re out of luck, Stanford), one cannot avoid the fact that a full 84% share that “the amount of knowledge a candidate has is very important in hiring decisions.”

    Where are students turning to bridge the gap? More and more, online. Online courses and certifications offer students the chance to efficiently and effectively replace some or all of their brick and mortar “hours in the seat” with competency-based learning that appeals to employers. More than half of all employers (54% per Lumina) now report the likelihood of hiring “a candidate who has a degree from an online higher education provider OVER a candidate with the same degree from a traditional higher education institution.”

    No doubt, the higher education experience offers more than just access to the workplace: a protected step away from the family home, illuminating interaction with peers and mentors, acquisition of knowledge for knowledge’s sake, well-rounding as a human being. For far too many, however, the price of that education exceeds the ability to pay. The all too common failure of that education as career preparation just adds injury to injury.

    For reasons of content and cost, higher education finds itself poised on the cusp of major change. Not all that many tomorrow’s from now, someone out there is about to become the last one to pay a quarter of a million dollars for yesterday’s higher education.

  2. #2
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    With one about to enter law school and a second half way through a pre-med undergraduate experience, I feel the pain of the price tag. The "online experience" of higher education is a fascinating concept, and as technology improves seems to be gaining in plausibility and acceptability. The point raised regarding the social aspects of the college experience can't be ignored (although the cost of obtaining that needs reasonable boundaries). Will we wind up a nation of recluses incapable of basic social interaction? Probably not, but there is a true growth that happens when you're stuck in a dorm with dozens of like-minded students that would be very difficult to replicate online. What the online offerings need is reputation and credibility - something they sorely lack today. As someone who hires professionals with advanced degrees, I'd have to say that I would take a hard look at the validity of an online degree, and in general, would lean away from it.

  3. #3
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    Agreed, the social component to learning is key. As you note, paying tens of thousands of dollars a year for that component is another matter. If I were an 18-year old interested in an inexpensive college degree, I might find an apartment near a brick-and-mortar campus. I'd take my courses online but participate in campus life. Sure, I might not have access to everything (fitness facilities, dining halls, etc.), but I could probably even make my way onto intramural teams.

    Several universities are moving down the online path. Among them, two that I'm aware of are Georgia Tech and Southern New Hampshire University (SNHU).


    • Georgia Tech has an online computer science master's degree for what I've seen reported as $8k (this piece says $7k)

    • SNHU has several thousand "brick and mortar" students and almost 10 times as many online



    A bit farther afield, there's the Minerva Project. Here's a nice description of it:

    Quote Originally Posted by Inc.
    According to Nelson, the goal of Minerva Project, which raised $25 million in venture funding last year, is to provide students with a richer educational experience than they could get even at the world's best universities, and for a fraction of the cost. That means the school will not only offer traditional majors, but also mandatory courses on how to become better critical thinkers. In fact, says Nelson, the first four classes, which last all year, focus exclusively on analytical skills. After that, students will be free to select from Minerva's 20 traditional majors.

    In addition to being well-educated, Nelson wants Minerva students to be citizens of the world, which is why after attending freshman year in San Francisco, students will spend the next six semesters in six different countries. "That way you get the best formal and informal education you could possibly have," Nelson says.

    With room and board, the full cost of a year at Minerva is $28,850, but the company is waiving all fees for its founding class of 15 next fall. After that, it will offer financial aid like any other university. But while the low cost is likely to be the biggest lure for students, the biggest deterrent may well be the fact that employers will, by and large, be unfamiliar with what a Minerva degree means, a problem plaguing nearly every upstart education company around today. After all, there's more to a Harvard education than the education itself. A Harvard degree requires no explanation.

    According to Nelson, however, convincing businesses that Minerva graduates will be qualified job candidates has been "the easiest of all our tasks. Employers are less than satisfied with the product they get out of the best universities, so when we explain our methodology, it becomes a pretty easy sell."

    Earlier this year in a visit to the Inc. offices, former Nebraska Senator Bob Kerrey--executive chairman of Minerva's nonprofit research arm--said his biggest worry was gaining academic accreditation. But by aligning itself with the Keck Graduate Institute, Minerva is much more likely to get accreditation than than it would on its own.
    We're trapped between employers saying that the current higher education system isn't working and those same employers skewing their hiring strong in favor of that broken (and unaffordable) system. Sooner or later, something has to give ...

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