The Coming College Revolution
July 2, 2014
The traditional college model will soon be transformed into one that is more flexible, cheaper and mobile, according to the Economist.
Most students still recognize the benefit of a college education, with a degree increasing lifetime incomes by as much as $590,000 in net-present-value. However, even though colleges and universities are churning out millions of graduates this year, rising costs, changing demand and emerging technology are leading to a "reinvention of the university."
- The cost of higher education has been rising by 1.6 percentage points more than inflation every year over the past two decades, due in part to government funding and the premium employers place on degrees.
- According to an Oxford University study, nearly half of all occupations are at risk of becoming automated in the next few decades, meaning that people will need to strengthen their human capital.
- Technology enables students to be educated at fraction of the cost of attending a university. "Massive Open Online Courses" (MOOCs) allow colleges to offer cheaper classes to employees and students.
These three forces will lead to more prestigious colleges selling their MOOCs around the world. Mediocre schools, on the other hand, may see decreased revenue and school closures. While this might hurt those schools, the new model could benefit students, reducing the costs of higher education and making it more accessible to students, including older workers in need of retraining.
Source: "Creative Destruction," Economist, June 28, 2014.
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