Is ‘$99 a Month for College’ Really a Cute Little Kitten?

John SenerBy John Sener

In a recent blog post on his Connectivism web site, George Siemens uses the term “cute kitten syndrome” to describe how practitioners commonly treat open education resources — cute, cuddly, beyond reproach — but he offers some constructive criticism anyway.

While reading “College for $99 a Month,” I couldn’t help thinking about cute kittens. Who could be against cut-rate college? We all know how expensive higher education has gotten in the U.S.; the movement to make college more affordable for more people is laudable and much needed. Awww, $99 a month for college, isn’t it cuuuuute? Somebody, though, needs to be thinking about the shots, the litter box, and who’s going to feed it.

Although this is a magazine article with the requisite human interest hooks to heighten reader interest, it’s still a fair question to ask whether or not $99 a month for college, and the business model it implies, really is a cute little kitten in the first place. My take: it is a worthwhile innovation on balance. Catastrophic for universities? This kitten’s got some lumps and warts — the cuteness in this case fades upon closer inspection.

The storyline we’re supposed to absorb appears to be something like this:  the Internet makes cheaper education possible ($99 a month!). Smart innovators are trying to make this happen with the support of eager students and Free Markets. Self-serving faculty and inauthentic, short-sighted accreditors are trying to stop this from happening. But in the long run, consumer choice will win out, and students will learn cheaply! And most everyone will live happily ever after (except for the universities and maybe the accreditors too). The End.

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OK, I don’t want to be too sarcastic here because the article has a lot of good points and some useful information. As a coherent whole, however, I’ve read the thing several times and still can’t make heads or tails of it. The superficial storyline is simple enough to grasp, but its connection to the reality it purports to describe falls apart upon closer examination.

Like Craigslist, StraighterLine threatens the most profitable piece of a conglomerate business: freshman lectures, higher education’s equivalent of the classified section.

Where is the evidence that freshman lectures are the most profitable “piece” of the higher education “business?” Is the comparison between freshman lectures and classified advertising apt? Not really.

The most basic mistake here, of course, is trying to view higher education as strictly a business. Yes, they have revenues and costs. But, name another “business” whose customers are also its products, its performers, and its benefactors. Or one which “sells” every unit it “makes” at a loss, i.e., the gap between tuition and actual costs. (OK, besides most Internet companies.)

Beyond that, the comparison to classified advertising is misleading. According to various sources, classified ads accounted for 40% of total newspaper revenue in 2000; that dropped to 25% in 2008. Does tuition from freshmen account for 25-40% of revenue for IHEs? Figures are hard to find, but if we consider that IHEs have multiple sources of revenue (grants, government & foundation funding, partnerships, etc.) and that freshmen only comprise at most 30-35% of the tuition revenue (far less for universities with graduate programs), it doesn’t appear that tuition from freshmen is anywhere near as important to IHEs as classified advertising has been to newspapers.

Is college getting less affordable for more and more students? Absolutely. Do IHEs guard their underclass revenue streams jealously? You bet they do. I know an instructor who taught the exact same course at the local community college and the nearby university. If a student took the course at the community college, the local university refused to accept transfer credit for the course even though it was supposedly a “sister institution.” Stories like these abound and are one of the reasons we are cheering for solutions that effect change. But is freshmen tuition the soft underbelly of the IHE revenue model? Not feelin’ it…

The only expensive thing left in higher education was the labor, the price of hiring a smart, knowledgeable person to help students when only a person would do. And the unique Smarthinking call-center model made that much cheaper, too.

Has the author priced building construction or football uniforms lately? More to the point, what are the labor costs in intro courses where TAs, large class sizes, and community college-level tuition rates abound? There is an important point here: StraighterLine and others (present and future) offer their services as an improved alternative with a lower cost structure.  But the actual reality is rather more complex than the storyline implies.

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Big changes need to happen from without and within, but characterizing the existing structures as simply “artificial barriers” is frankly a bit naive and ultimately counter-productive. We can and must do better than that.

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Where there are cute kittens, there are also usually ugly trolls playing the role of villain and making the kittens look that much cuter. In this article, the ugly trolls are the accrediting agencies:

…the biggest obstacle…was a process called accreditation….And the most prestigious accreditors will only recognize institutions: organizations with academic departments, highly credentialed faculty, bureaucrats, libraries, and all the other pricey accoutrements of the modern university. These things make higher education more expensive, and they’re not necessary if all you want to do is offer standard introductory courses online….The accreditation wall will crumble, as most artificial barriers do.

It’s easy to typecast accreditation agencies as trolls: they’re bureaucracies, they have complex rules and make stupid decisions sometimes. Just get out of the way, you mean accreditation agencies, and let us offer our standard introductory courses in full market freedom! Uh, not so fast. Accrediting agencies are not just “artificial barriers” — they provide tangible and valued benefits (here’s a representative list). “Down with the system!” is just, well, so ’60s and ’70s. Big changes need to happen from without and within, but characterizing the existing structures as simply “artificial barriers” is frankly a bit naive and ultimately counter-productive. We can and must do better than that.

Colleges may have another decade or two, particularly given their regulatory protections. Imagine if Honda, in order to compete in the American market, had been required by federal law to adopt the preestablished labor practices, management structure, dealer network, and vehicle portfolio of General Motors. Imagine further that Honda could only sell cars through GM dealers. Those are essentially the terms that accreditation forces on potential disruptive innovators in higher education today.

Actually, accreditors are more like the EPA in this example. Their policies can be maddening — I waited five years for an EPA-acceptable Smart car to arrive in the US, and then they send us a 40mpg model instead of the 60mpg one? (And of course, we’ll never see a street-legal Smart roadster here.) On the other hand, do we really want hordes of cheap and truly unsafe cars fattening up our traffic death statistics, which is what would happen if there were no EPA regulations?

Likewise, accreditors and their regulations should not somehow disappear from the equation, but accreditors should be looking more closely at alternative models which save students money, and looking very closely at models like StraighterLine. The rest of academe should be too. Is what StraighterLine et al. offer of sufficient quality? If it’s better than 400-person lectures, then why shouldn’t it be acceptable? Are we missing something important by going to the StraighterLine model? If so, should we be looking harder at incorporating it into existing courses? These are good questions to be asking, and I’m glad that StraighterLine is causing enough irritation to bring this issue to greater attention.

In short, we need a less fairytale and more systemic approach to dealing with this situation. Catastrophic for universities? Oops, there goes StraighterLine’s business model along with their clients. Surely Burck Smith and the rest of us can come up with a better, non-catastrophic solution…

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steve_eskow40 Click here to see the response from Steve Eskow.