NCPA - National Center for Policy Analysis

An Innovative Idea to Reduce Higher Education Costs

September 19, 2013

The cost of U.S. higher education is at the forefront of the national consciousness. With significant political backing, fervent public cries for reform, the ever-increasing emergence of new providers and the gradual acceptance of even elite Ivy League schools to embrace innovations, it is quite possible that a new vision of higher education is emerging, one that can truly stretch the higher education dollar, says Daniel K. Lautzenheiser of the American Enterprise Institute.

  • Tuition has more than doubled in real dollars since 1980, growing far faster than inflation.
  • Total student loan debt cracked the $1 trillion threshold.
  • As labor costs decrease in most industries because of technological advances, they will increase in more stagnant industries such as higher education.

What's the future of higher education?

While online education is not new, colleges and universities have often priced their online offerings at the same level as in-person classes, despite being far cheaper to deliver, and have used the profits to subsidize their on-campus activities.

  • The potential of low-cost online courses is most evident in the emergence of massive open online courses (MOOCs).
  • In 2011, Stanford University professor and Google scientist Sebastian Thrun offered his course on artificial intelligence for free online, attracting 160,000 students from more than 190 countries and demonstrating MOOCs' potential while ushering in a flurry of media attention.

Competency-based learning is attracting the attention of national figures. The combined effect is to allow students, anywhere, to progress at their own pace through course material so long as they demonstrate competency, with minimal upfront costs in buying books or relocating to a physical campus.

Public debates over college affordability and corresponding policy solutions need to shift gears. Instead of trying to radically change the cost structure at existing schools, we ought to seek to create a more vibrant and open higher education marketplace that focuses especially on providing valid, low-cost courses and credentials. This includes MOOCs and competency-based learning.

Source: Daniel K. Lautzenheiser, "Getting More Bang for our College Bucks," American Enterprise Institute, September 9, 2013.


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