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In college, my roommates undertook a random multi-year project to build a fictional character. His name was John W. Moussach Jr., a former student who became a “prosperous Midwestern industrialist.” Initially, articles in campus publications appeared under his signature, and he managed to register for various campus events.
After moving into the internet age, my roommates gave it a digital presence by creating a Wikipedia page, then LinkedIn and Facebook accounts. Some of us have received phone calls looking for him. Once my roommate Dave replied that he would be really happy if the caller could help find John W. Moussach Jr. as he owed Dave $ 10.
The Wikipedia entry Moussach referred to various articles and aphorisms, and although an enterprising editor has since determined that none of these individuals actually existed, digital remains can still be found. By popular acclaim, the best quote from Moussach is:
We’ve all heard the quote from Will Rogers “I’ve never met a man I didn’t like”. In my youth, I met a World War I veteran who had met Will Rogers. The veteran told me, “I never met a man I didn’t like until I met Will Rogers.”
– John W. Moussach Jr.
Creating John W. Moussach Jr. took a ton of seemingly aimless work. Unfortunately, the same is true of the state of online learning. Of course, tens of thousands of online degree programs in the United States have made higher education more accessible than ever. But unlike the impact of online delivery on all other services, so far online learning has failed to make higher education in America more affordable.
According to BMO Education Sector Report 2019, the average cost per credit in the state for an online bachelor’s degree program is 14% higher than for the same field programs. And a 2017 survey by WCET found that 54% of institutions were charging students online more. In another investigation, 23% said they billed more and 74% billed the same.
Whatever numbers you think of, it’s clear that very few online programs charge less. Rio Salado Community College’s thunderous effort to reach the “educational deserts” with online courses at $ 250 per credit (“unusually high for a community college ”) is perhaps less a matter of serving educational desserts than serving educational desserts on your own.
Imagine if you want a bizarre United States – even more bizarre than the current one – where the reduction in federal and state funding for higher education has been exactly offset by the lower cost of delivering programs online or even blended. Pell grants – now capped at $ 6,195 – still make a serious dent in the cost of college. We wouldn’t see a wave of headlines about how the state’s flagship universities are now unaffordable and do not reflect the diversity of their states. And overall student debt is no more of a problem than it was in the 1980s and 1990s.
Why did it not happen? There are plenty of complaints. Colleges and universities blame the high cost of developing and operating small-scale online programs, despite obvious savings in facilities, staff, and ancillary service wrecks and jetsam provided to students on campus.
Marketing is a major culprit, as generating leads – then converting leads into enrolled students who actually show up on day one of an online course – can cost over $ 5,000 per student. The blame has recently spread to online program managers, companies that are partnering with higher education institutions to launch online degrees and have a financial stake in high tuition fees as most partnerships are based on revenue sharing (but now face has a crowded market and limited growth prospects for expensive online degrees).
The most exciting news about online pricing is The new 2U baccalaureate in Data Science and Business Analysis with the prestigious London School of Economics. That’s $ 25,000 (not per year, for the entire degree), an incredible bargain compared to the Ivy League’s first online bachelor’s degree: Penn’s $ 71,000 Bachelor of Applied Arts and Sciences. Coursera has a comparable program with a lesser-known branch of the University of London, but has focused its OPM efforts on masters programs that are priced close to the same level.
How ironic that a traditional OPM like 2U is leading the way rather than one of the MOOC providers, which started five years ago with such a price promise. Remember Georgia Tech’s Online Master of Computer Science priced at Udacity at just $ 6,630? It was a unique case. EdX has been very active in launching masters programs around the $ 25,000 price point, first at Boston University, Indiana, ASU and Georgia Institute of Technology, and now Purdue. But edX’s partnership with ASU to provide a free (MOOC) first year of college has now been abandoned; the 25 percent discount did not generate much interest.
Of course, none of these initiatives stand up to the institution making the biggest difference for the most students with a low cost online program. Western Governors University – an overnight sensation 20 years in the making – now enrolls more than 110,000 students in skills-based online programs that cost about $ 6,500 per year. WGU’s pricing has helped define what it means to be a public online university. Corn $ 16,500 – the average cost incurred by graduate students – is not cheap by online standards. Can you name another online service that costs $ 16,500? That’s why I think even WGU – the miracle on Great Salt Lake – is just a prelude to a paradigm shift in online pricing.
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To get an idea of what might happen to the pricing of online degree programs, take a look at mobile telephony in India. In the first half of 2016, around 10 major Indian mobile companies competed in selling SIM cards for calls and data; it costs 1000 rupees (about $ 14) to buy 6gb of data. Then a new entrant owned by India’s richest man Mukesh Ambani opened his store with a radical model: free calls for life, data billed at less than 10% of what competitors were charging, and completely free for the first three months.
Six months later, Ambani Jio had 100 million customers – the fastest product adoption in history. (It took Apple five years to sell 100 million iPhones.) Today, Jio is India’s largest telecommunications provider, with 322 million subscribers; only three competitors survived.
Jio did it by taking a very different approach. Before selling a single plan, Ambani invested heavily in building a high-capacity, all-fiber national IP network, so that all voice calls would go through the Internet like Skype. As a result, unlike competitors with capacity constraints, Jio’s marginal cost for delivering voice calls and gigabytes of data was effectively zero.
Jio’s strategy was to make data so cheap and of such high quality that it would dominate the market and make Indian consumers dependent on internet data. Then he would take advantage of his vast network and launch new digital businesses in areas such as entertainment, banking, health and education. Indeed, rather than demanding payment from his audience, Jio’s plan was to sell his audience.
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Could there be a higher education Jio? This is possible for two reasons. First, the marginal cost of a quality online education will never be zero, but it could be much lower than you think. We’ve seen instructor-led online programs (no MOOCs, not skills-based) in the United States where the marginal cost of teaching is $ 50 per student per three credit course. Programs using offshore instructors can be even cheaper. AI assisted chatbots and Discussion forums are already increasing engagement and further reducing costs. And like Jio, revolutionary pricing tends to avoid spending thousands of dollars to attract and enroll every student.
But also like Jio, there is another source of income available for online education providers that reach a comparable scale. Instead of maximizing student tuition income, the higher education Jio will sell talent to employers (i.e., rather than demand payment from the public, sell the public).
Talent is valuable to employers, and they are willing to pay; the US staffing and recruiting industry alone is worth more than $ 150 billion. So, just as Jio has invested billions in its network, the Jio of higher education will build an infrastructure of deep and meaningful connections with employers producing high quality employment outcomes (unlike the current relationships that colleges and universities maintain, which often look more like a “favor or donation“).
By lowering prices by an order of magnitude combined with the prospect (and possibly the promise) of quality jobs from its employer infrastructure, the Higher Education Jio will attract talented students from the start and motivated because, like Jio, it seems like a much better deal. Better talent at the gate means better talent at the gate, and the steering wheel begins to roll. As colleges and universities survive by continuing to flog their status and the myriad benefits of the campus experience, one wonders how long their online pricing would last; Jio’s competitors were forced to immediately lower prices by 80 percent, and to no avail.
The higher education Jio is unlikely to be a traditional higher education institution. As Trace the Urdu notes, it is not impossible to offer quality online education at a low cost, “but it may well be impossible given the constraints that exist in a public university. The current intersection of existing colleges and universities with both the capital and the motivation to create the Jio of higher education is a zero whole. In addition, no school of any kind has the ability to establish the required employer infrastructure.
When the Jio of higher education arrives, even successful Midwestern industrialists like John W. Moussach Jr. will line up to enroll. And to paraphrase the famous Mr. Moussach, I never met a man I didn’t like until I met men who were charging the same (or more) for their online degree programs.
