How creative destruction is altering the economics of higher education
If you have college-bound children or are still in school yourself, you are only too keenly aware of the high price of education: $20,000, $40,000, $60,000 a year and up.
While tuition costs for traditional higher education seem to be soaring in multiples way above the cost of living index, market forces and technology are also converging to offer new approaches.
For example, as Kevin Carey reports, an online education provider calledStraighterLine offers online courses in subjects such as accounting, statistics, and math — for a flat rate of $99 a month, plus $39 for each course started. The company offers Web-based course materials, videos, podcasts, and collaborative online study groups. According to the report, StraighterLine courses were designed and overseen by professors with PhDs. Again, all for $99 a month, or a fraction of the cost of traditional institutions — or even online institutions.
StraighterLine was founded by Internet entrepreneur Burck Smith, who “envisions a world where [students] can seamlessly assemble credits and degrees from multiple online providers, each specializing in certain subjects and — most importantly — fiercely competing on price.” StraighterLine partners include CharterOak State College, Fort Hays State University, Lake City Community College, Potomac College, and Kaplan University.
Will traditional higher education follow the path of other industries, such as automakers, banks, and newspapers into the financial abyss? Carey makes the observation that “Colleges are caught in the same kind of debt-fueled price spiral that just blew up the real estate market. They’re also in the information business in a time when technology is driving down the cost of selling information to record, destabilizing lows.”