How to pop the college tuition bubble

“For a growing number of students, entering the lucrative college-educated realms of the economy is like being smuggled across the border—you can get to the promised land if you try hard enough, but you arrive in a state of indentured servitude to the shady operators who overcharged you for the trip.” So writes Ed Sector’s Kevin Carey, who offers A Radical Solution For America’s Worsening College Tuition Bubble. The only way to control college costs is to introduce competition, Carey writes.

New providers of higher education could be made “eligible for payment via Pell grants, federal loans, or other current and imagined federal aid systems if they agree to a few baseline conditions,” such as price regulation and transparency. “They would be required to provide public information about how much their students learn, and have their access to federal aid rescinded if students are not learning enough.”

. . .  a pair of well-known Stanford professors are currently teaching an Artificial Intelligence course to about 200 Stanford students—and more than twenty thousand students around the world, online. The non-Stanford students won’t receive credits from Stanford, but they will receive official documentation from the professors as to how they scored on course tests and their overall rank. Under this new system, those professors would be free to set up their own business teaching Artificial Intelligence over the Internet, and students would be free to pay them with federal aid. Other providers might take advantage of the fast-growing body of open educational resources—free online courses, videos, lectures, and syllabi—and add value primarily through mentoring, designing course sequences, and assessing learning.

To remain eligible for federal financial aid, old-line colleges would have to accept transfer credits granted by the new providers.

And because they will be inexpensive and attached to verifiable data about how much students are learning, they will make a compelling value proposition when competing with traditional colleges that have no such data, charge more money, and are weighed down by legacy expenses and change-resistant cultures.

Existing colleges and universities will have to adapt or die, Carey writes.

Making sure those new-style credits are transferable will be tricky. Colleges today often reject credits earned at other accredited institutions.

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  1. Competition alone won’t solve the problem… it might if the degrees offered by various schools were comparable, but as long as there are the Ivies and other top schools the upper limits of tuition will continue to rise. No high school senior has Online U as their primary school. There is a still a large social stigma against online schools and no government policy will change that.

    The only way to pop the bubble is to sharply decrease federal-backed loans. The loans have artificially increased demand for college education and as a result driven up the price. Will there be individuals who are capable of succeeding in college who won’t be able to pay for it? Yup, but they’ll be as likely to succeed in a non-college career path.

    • It seems self-evident that pumping vast amounts of subsidies into a market will drive up prices but the urge to get something for nothing, on the part of parents of prospective college students, and the obvious self-interest of the entire college establishment makes cutting subsidies a pretty tough sell. Still, given the size of the problems of student debt and continuously escalating college costs, necessity may force the solution that good judgment couldn’t.

  2. Cardinal Fang says:

    I took the Stanford online Artificial Intelligence class. It was fantastic; I learned tons, and I was able to make online and eventually in-person connections with other students. Dr. Norvig and Dr. Thrun did the world a service in making the class available to students all over the world who otherwise couldn’t have taken it.

    BUT. The 200,000 students who signed up for the class, and especially the 20,000 who completed the advanced track by doing the homeworks and exams, are not at all representative of American college students. The class offered no reward except the excitement of taking it and the knowledge gained by taking it. Nobody got any new credentials.

    Only students who love learning, or who hoped to use the information in their current jobs, would sign up for a class which didn’t yield a credential. Most American college students are not like that. Rather, they are in college for the non-academic college experience and the credential of a degree, not the fun of learning.

    Moreover, I don’t think there was much cheating in the AI class, because in the absence of a credential, there wasn’t much reason to cheat. But online classes that offer credentials would have rampant cheating as lazy dishonest students sleazed their way to a degree.

    So the AI class was wonderful, and I can’t praise the professors enough. I hope Stanford continues to offer the online classes. I signed up for three for this quarter. But I’m afraid the model is not a general cure for the college tuition bubble, because it won’t work well for the average student.