The first article, from The Chronicle of Higher Education, discusses the concept of “badges” that are awarded by various websites, training companies, individuals, etc. The concept is that the badge is relatively easy to earn (to keep the learner motivated and engaged) and indicates that they have achieved a certain skill level or learning competency.  At the Khan Academy, students receive a “Great Listener” badge for sitting through 30 minutes of video lectures and can earn an “Awesome Listener” badge after completing a full hour of video lectures.  In addition, visitors and users of that site can earn badges indicating “Master of Algebra” or “Challenge Patches.”  Similarly, MITx is a newly announced venture by Massachusetts Institute of Technology (MIT), slotted to be released in an experimental prototype version in the spring of 2012 and designed to recognize people who complete MIT’s online courses and successfully pass the tests and quizzes.  MIT has an arrangement with OpenStudy to offer badges to students who are helpful in course discussions.  The John D. and Catherine T. MacArthur Foundation has a $2 million grant to test the badge platform in education.  With the Foundation’s support, The Mozilla Foundation (best known for the Firefox browser) is “building an Open Badge Infrastructure to enable the interoperability and collection of badges” which will “support badges from any issuer across the Internet.” 

Both The Chronicle of Higher Education and Inside Higher Education wrote about the tenured Stanford professor who has left to form a startup, Know Labs.  Sebastian Thrun and a colleague taught an artificial intelligence MOOC (Massively Open Online Course) this summer to more than 160,000 students and he plans to commercialize that type of course through the Udacity portal owned by his startup, Know Labs. Thrun’s venture will not only offer courses developed and taught by him but also by others.  One of the first courses that Udacity will offer is “Building a Search Engine” which will be seven weeks in length and which will be taught by David Evans, Associate Professor of Computer Science at the University of Virginia.  Thrun is betting that the word (grades/recommendation) of a highly regarded professor will win over prospective employers or current employers of students taking courses.

Richard Vedder, an economist at Ohio University, wrote an article for the Chronicle’s Innovations blog entitled “Beware: Alternative Certification is Coming.”  Most of the article talks about Straighterline’s lower priced college course offerings and the announcement last week that Straighterline is offering students the opportunity to take the Educational Testing Service (ETS) iSkills test and the Council on Aid to Education’s (CAE) Collegiate Learning Assessment (CLA) test (the one made famous by New York University Professor of Sociology and Education, Richard Arum and University of Virginia Assistant Professor of Sociology, Josipa Roksa in their book, Academically Adrift: Limited Learning on College Campuses).  Vedder also discusses the Khan Academy and MIT certification offerings.  My favorite paragraph from his article relates to his discussion of the first week of beginning economics courses when professors explain the point that:  “If the price of something rises a lot, people look for substitutes.  Resources are scarce and they [people] maximize their utility by shifting away from high priced goods or services to the lower priced good or service.”

The comments sections in the online postings of these articles range the gamut from commending the idea to ridiculing it.  I happen to think that these alternatives to traditional higher education are to be expected as part of the continuing onslaught of alternatives for a service that many can either not afford or believe is overpriced.  As Christensen states in his books about innovation (specifically Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns and The Innovative University: Changing the DNA of Higher Education from the Inside Out), it’s not always the disrupter that succeeds, but sometimes the incumbent who adopts the disruptive technology and deploys it successfully.

One of the issues that I see with badges is the issue of identity verification and assuring that the person who earned the badge is actually the person who did the work.  Just like the recent SAT test taking scandal on Long Island, if I have a talent at taking a certification course and there are no checks and balances in the system, I may be able to take the course/test for others using their identity.  That problem can be solved, but some solutions are more expensive than others and the expensive solutions may overweigh the cost of the badge or the alternative certification. 

As soon as employers start accepting the badges, the value equation for higher education will lower, putting additional stress on a system that is already stressed by its high prices.  If employers value the training of a superstar professor over a university, that will be another disruptive force to the sector.  The situation reminds me of the scenarios described by Nicholas Carr in his book, The Big Switch (which I wrote about in my blog in July 2008).  Carr’s premise is that the lower cost of technology switches the power from institutions with lots of capital to the individual entrepreneur who is able to “rent” powerful servers and technology from vast farms owned by Google, Microsoft, etc.  Having accreditation and a fancy campus with many faculty and staff may not overwhelm a solo professor/instructor able to convey valuable knowledge to students and to “certify” them by awarding a badge.

The fact that “badges” and other forms of alternative certifications are surfacing daily is another example of the evidence that traditional higher education is overpriced and under siege.  According to a recent Pew Research Center survey, the primary reason that students don’t attend or complete college is financial.  In fact, 57% of adults responding in the survey said that the higher education system does not provide good value for the investment and 75% said that it is not affordable.  The trend is for U.S. employers to seek workers with at least some post-secondary education.  If our colleges and universities are unable to provide employers with graduates with these credentials, it opens opportunities to corporations, organizations, or even individuals offering the alternative credentialing.  Colleges and universities should look to some of these alternatives as viable means to providing a lower cost education as well as a way to preserve or grow their existing enrollments.

Unlike Clayton Christensen who writes about innovative companies as a Professor of Business Administration at Harvard Business School (thus making his transition to writing about innovative universities less surprising), DeMillo’s background is in engineering and computer science.  His observations, however, stem from his background as a professor at a traditional “brick and mortar” school.  From his position inside the hallowed halls of academia, he notes that the institutions in the middle, those between the elite institutions (top 75) and institutions that admit everyone, are the ones that are in trouble with a value proposition squeeze coming from above (elite) as well as below (business model to serve anyone or everyone at a lower price point).  DeMillo stresses that modern universities are businesses (contrary to some of the myopic ideologues who insist that non-profit institutions don’t have a business model) and are competitive organizations run by smart people.  Similar to Christensen, DeMillo argues that the class-oriented society and culture of higher education creates a faculty-centered model that is difficult to break out of for institutions undergoing competition for enrolled students.  (For a review of Christensen’s book, Disrupting Class: How Disruptive Innovation Will Change the Way to World Learns, see my August 2008 blog article.  To see my review of Christensen’s book, The Innovative University: Changing the DNA of Higher Education from the Inside Out, see my August 2011 blog article.)

DeMillo states that in any market, the winners are those with competitive brands, price, or value.  Brand is difficult to build for all but the elite colleges and universities, price continues to increase for almost all institutions and in most cases is becoming uncompetitive, and value is a concept seldom understood by the faculty at most institutions.  Because most college presidents are promoted from the ranks of academics, they are ill-equipped to understand the importance of strategic planning and understanding competitive threats from business disruptors like creative proprietary institutions.

DeMillo states that his book is “ultimately an essay about value.”  Most of the world does not understand the traditional American business model for higher education that is faculty-centered and resource inefficient, not to mention costly.  If American universities want to “survive” (DeMillo’s choice of words) over the next generation, they must apply the following three lessons of our global economy to their operations:

1. Focus on value and deliver a degree that is priced reasonably and that is of reasonable quality.
2. Focus on costs by controlling them in ways that are unthinkable by faculty-centric institutions to include:
a. Deskilling (greater use of adjuncts)
b. Better use of physical plants
c. Better use of materials
3. Establish an individual institutional reputation versus continuing to chase the elite institutions at the top.

DeMillo takes the time to review and report on activities of proprietary or for-profit institutions that he credits for being student-centered because students provide their main source of income.  DeMillo states that enrollment growth is a good thing at a for-profit in that it increases revenues and profits and allows the institution to reinvest those profits in additional services and programs.  Traditional institutions determine their charges from a fixed cost model designed to measure the cost of hours of instruction in the classroom with little consideration for the appropriateness of the charge or the specific relevance of matching labor delivered to competitive market costs.  Online programs run by proprietary institutions price based on services consumed or delivered and unencumbered by a high fixed cost structure; because of this, they are able to provide a competitively priced product with a value recognized by the students they serve.

Institutions in the middle are subsidized by public funds, sponsored research, endowments, or church support.  Tuition fluctuations at these institutions create revenue gaps that have to be covered by increases in one or more of the relevant subsidies.  Those subsidies are shrinking.  DeMillo states that it is not clear how much disruption institutions in the middle can tolerate, but for many, resources are stretched and stressed beyond the breaking point.  DeMillo argues that all institutions in the middle have to pay attention to price sensitive customers.

DeMillo spends some time talking about non-profit and proprietary institutions that are process centered and provides examples about efficiencies that lower the production cost for those institutions.  Another topic that he spends a little time discussing is “hacking degrees.”  Hacking is a topic that continues to be discussed by many writers including Anya Kamenentz, author of DIY U: Edupunks, Edupreneurs, and the Coming Transformation of Higher Education.  It is a controversial topic for those focused on traditional education but more strategic for those focused on the capabilities of technology and the learning that the internet and employers provide many adults.  In my opinion, it is a topic that is not covered enough in this book given its potential for impact on the higher education sector.

Like any good researcher, DeMillo provides recommendations for institutions in the middle to “survive” and thrive in the 21st century.  Broadly speaking, institutions should define their value and become “architects” for new business models.  As it applies to the definition of value, institutions should forget about who is above them, focus on what differentiates them, establish their own brand, not romanticize their weaknesses, and be open.  From an architecture perspective, institutions should balance faculty-centrism and student-centrism, use technology, cut costs in half, focus on their own measures of success, and adopt the New Wisconsin idea which is to be truthful to the community that you serve.  His recommendations are sound and grounded.  Because of the entrenched culture at many of the institutions in the middle, I doubt that few will be able to follow DeMillo’s recommended path to improving their performance and financial stability.  Those that are able to follow the path, should see improvements in reputation, enrollments, and be able to distinguish themselves from their competition.

Bailey points out that the public sector has frequently employed the expertise of private industry in various attempts to solve the nation’s problems.  For example, in March 2010, President Obama reached out to private-sector businesses, agreeing to provide some $150 billion in support of those businesses developing an alternative to foreign oil.  He said to the CEOs in attendance, “’Your country needs you to mount a historic effort to end, once and for all, our dependence on foreign oil…And in this difficult endeavor, in this pursuit on which I believe our future depends, our country will support you.’” 

In another example, Bailey points out that the Review of US Human Spaceflight Plans Committee established by the White House Office of Space and Technology Policy recommended that NASA seek private sector assistance in developing commercial spacecraft.  “The review argued that this would free NASA to focus its attention and investment on developing more advanced capabilities, particularly in deep-space exploration.”  In each of these examples, a significant problem or dilemma has been acknowledged and government has rightly recognized that private sector innovation has the business agility and market understanding to propose and execute a meaningful solution.

In the realm of education, however, the pattern of public-private cooperation has not held true.  Bailey states that “Instead of involving the private sector, education policymakers have actually created policy and funding barriers that skew support to non-profits and prevent for-profits from participating in programs aimed at improving teaching or learning.”  He uses the American Recovery and Reinvestment Act’s Investing in Innovation competition as an example of education policymakers “shutting out” private sector for-profit institutions.  He explains that Congress wrote that legislation in a way that effectively excludes the for-profit education sector. 

In explaining why government is hesitant to engage the private sector in the higher education debate, Bailey recounts some of the most pronounced criticisms of online education.  He explains that many fear that government support for for-profit universities could lead to “market distortion.”  On the other hand, systematically excluding the private sector can lead to its own variety of market distortions and fundamentally, “these concerns do not outweigh the benefits of having a thriving marketplace of private-sector entrepreneurs tackling social problems, particularly in education.”  Interestingly, there also seems to be resistance to government engagement of private sector education institutions because of a belief by some that one should not make a profit on education.  It is difficult, in my opinion, to justify this notion – especially in light of the fact that government engagement of private industry in the areas of clean energy, healthcare, and space exploration has set the precedent that it is okay to turn a profit while addressing some of the nation’s greatest challenges.  Additionally, no president of a non-profit college or university operates continuously on negative margins.  Prudent managers of non-profits are obligated to cover operating costs or explain why not.  The non-profit system actually encourages continued increases of expenditures during good economic times since the tax code questions a non-profit that continually generates a substantial surplus.  In order to reduce surpluses, additional projects are funded.  In addition, the taxpayer subsidies of non-profit entities are already very large.  In addition to allowing families of students to receive education tax credits, alumni and parents are allowed to deduct charitable gifts, and the institution does not pay income taxes on its endowment earnings, the receipt of charitable gifts, and generally, little to minimal property taxes and no income taxes are paid. 

Private enterprise plays an integral part in the fulfillment of national policy initiatives.  As Bailey points out, “Private industry routinely takes technologies pioneered by the government and turns them into cheap, reliable and robust industries.”  Why should online higher education be any different?  The federal government developed the initial product – education (via compulsory, free public K-12 education, and eventually the establishment of government subsidized institutions of higher education) – and placed significant value in obtaining that product.  In an era of considerable funding cuts and a bleak financial outlook for most institutions, it seems that now is the optimal time to engage the private sector for its opinion and ideas in order to reach President Obama’s stated education goals. 

Schneider and de Alva note that consumers are largely oblivious to the cost of an item, focusing almost solely on the price instead.  As long as the price seems reasonable (or, at least comparable to other similar products), the consumer is not likely to consider what the actual cost of the product is.  As the authors point out, nowhere can this be seen more clearly than in higher education.  Since the downturn of the economy in 2008, a deluge of articles have been published exploring the price of a college education (see the “Impact of the Economy on Higher Education” section of this blog) but little has been written for the American public about the true cost of a degree (that data is typically buried in academic policy and research reports that typically do not receive broad media coverage).  Schneider and de Alva have undertaken the daunting task of publishing the total cost of a bachelor’s degree for the American taxpayer.  Their findings are notable, assuming that those in a position to influence public policy and a broader national discussion read their paper.

The authors divided their sample into the following categories: public, private not-for-profit, and private for-profit institutions.  Beyond that,  they used a variation of the well-known rankings reported in Barron’s Profiles in American Colleges which provides six categories for schools ranging from “noncompetitive” (open admissions schools) to “most competitive” (highly selective, elite institutions).  Interestingly, American taxpayers subsidize the least competitive schools far less than they do the most competitive.  The irony is that the largest and fastest growing sector of the college population includes low-income and non-traditional students who are attending the lesser competitive schools.  These schools tend to offer greater flexibility for part-time students, working adults, and other “nontraditional” student populations.  To provide perspective on the dramatic differences in taxpayer subsidies, consider that “among not-for-profit institutions, the amount of taxpayer subsidies hovers between $1,000 and $2,000 per student per year…”  Among the most selective institutions in the nation, “the taxpayer subsidy jumps substantially to more than $13,000 per student per year.”

The amount of return (ROI) is important when considering any investment and can mean the difference between whether one makes an investment or not.  In the case of higher education and the taxpayers’ “investment,” the return is far lower than necessary to justify the current subsidy trends of the more highly subsidized institutions.  “For public institutions, taxpayers are investing more than $60,000 for each bachelor’s degree granted in the three less competitive categories, close to $75,000 in the highly competitive institutions, and more than $100,000 for each bachelor’s degree granted in the most competitive flagship institutions.”  In the less competitive schools, high dropout rates and longer time taken for completion of the degree decrease the taxpayers’ total ROI.  The highest dropout rates, however, tend to be found in the lesser competitive institutions – the same institutions receiving the least taxpayer subsidies (or none at all in the case of private for-profit institutions). 

According to their research, bachelor’s degrees earned from the private for-profit institutions offer the highest ROI for taxpayers since so little taxpayer money is invested into those schools.  The authors also consider the income taxes paid by those without and those with bachelor’s degrees.  Data shows that individuals holding a bachelor’s degree have lifetime earnings substantially higher than individuals without a college degree and therefore pay more in taxes, providing a benefit to the taxpayer. 

For example, because for-profit institutions receive no state appropriations but pay income taxes, there is a “net ‘profit’ to the taxpayer” for bachelor’s degrees earned at schools within this category.  Table 2 in the report shows that there is a benefit of approximately $6,100 to the taxpayer and over the degree holder’s lifetime, taxpayers will realize a net benefit of approximately $60,900 thanks to higher taxes paid by the graduate holding a bachelor’s degree from a for-profit institution.  By contrast, at a public school (non-/less competitive category), the taxpayer will subsidize approximately $6,000 per bachelor’s degree per year and ultimately see a total cost of $67,600 per bachelor’s degree.  Over the lifetime of the graduate’s career, the taxpayer will not see a positive ROI for subsidies provided for the benefit of the degree-holder.  The ultimate net cost to the taxpayer for a bachelor’s degree earned from a public school in the “non-/less competitive” category is $7,500.

In concluding, the authors make several recommendations that are worth re-iterating here.  First, they encourage stakeholders to focus efforts on addressing issues of college completion and retention.  This makes sense considering that the bulk of taxpayer costs associated with degrees earned at the lesser competitive schools (where the majority of students are earning degrees) is a result of high dropout and slow completion rates.  Additionally, the authors recommend that policymakers reverse “the current policies that result in providing the lowest levels of taxpayer support to the institutions that enroll the highest percentage of low-income, nontraditional, and minority students…”  Providing additional monetary incentives to these students can help boost the college completion and retention rates, ultimately benefiting the taxpayer as degree holders earn more and pay more in income taxes over the course of a lifetime.  The authors point out that if the Obama Administration’s “completion agenda” is met, taxpayer ROI at the lesser competitive schools where dropout rates are highest will increase.  The authors also recommend that policymakers take notice of the Lumina Foundation for Education’s Guide for State Policymakers which calls for  states to make strides in expanding and strengthening “’lower-cost, non-traditional education options,’” including online education.  Finally, the authors note that little data has been collected regarding the true and complete cost of a bachelor’s degree.  By understanding the real and total cost of the educational product as well as the price, policymakers can gain a better understanding of the true financial picture of higher education. 

The Economist presents data that may back the case that it’s not just the economy.  In examining data accumulated in their annual ranking of the top 100 MBA programs, they note that in 2010, the average cost of an MBA for the 85 schools outside of the top 15 was $81,911 while the average starting salary for the graduates of those schools was $81,178.  Five years earlier, the two year cost for the same 85 schools was $60,247 while the starting salary average was $78,442.  The attached graph shows that the disparity was greater ten years ago when the average starting salary was over $80,000 and the average cost was slightly less than $50,000.  The comparison could hardly be more dramatic; increasing costs of tuition have cut the noticeable advantage of attending a residential MBA program outside of the top 15. 

Elite schools like Harvard still have an advantage according to The Economist’s survey data.  Additionally, the article mentions a recent event at Harvard hosted by a large consulting firm where a member of that firm’s senior management noted while speaking to the faculty that the most valuable player on the Harvard Business School team was the Director of Admissions, a not so subtle reference to the elite students recruited to the school and subsequently recruited by that consulting firm.

While the purpose of the article is to compare costs of high end MBA programs, the comparison can easily be made across the entire continuum of accredited business programs.  The Association of Advance Collegiate Schools of Business (AACSB), one of the accrediting bodies for U.S. business schools, estimates that there are 13,670 institutions world wide that offer a business degree.  Being able to distinguish your program and your graduates from the masses is more than likely the only way that you can command a premier price going forward.  In more recent commentaries on the general state of global higher education, books like The Global Auction: The Broken Promises of Education, Jobs, and Incomes and The Innovative University: Changing the DNA of Higher Education from the Inside Out also stress the need for differentiation, tuition reductions, or both in order for institutions to maintain their competitive edge.  My theory is that regardless of your business program’s relative ranking, competing on price and product differentiation is the only safe way to ensure long term success.

Since APUS courses are offered wholly online with no time for face-to-face instruction, we developed a number of math instructional videos using Camtasia tablet software and embedded them in our classrooms to supplement the instructional materials.  Later, we decided to make our math videos available to everyone on our American Public University iTunesU site  and our APUS Youtube channel.  Comments to the individual videos, primarily in the form of thank you’s, demonstrate the usefulness and the need for technology like this.  More recently, we partnered with McDonogh School to establish a website, www.campusmath.com, to offer primarily math videos to the public for an elementary school through high school curriculum.  While I can’t speak on behalf of McDonogh School, I think that both of our institutions are aligned with the belief that math skills need to be improved and providing access to these videos to teachers, students, and parents may contribute to improved skills without providing the teachers and professors inside of a physical or electronic classroom.

The article about the Khan Academy in Wired mentions a teacher at Santa Rita Elementary in California who uses the videos from the Khan Academy to replace some of her lectures and then spends more time in class working on problem sets.  Teachers using the Khan Academy videos and problem sets have access to a dashboard that lets them see exactly where the student is stuck on a particular concept or problem.  Increasing the amount of time spent in class solving problem sets provides the teacher with more one-on-one time with the students who need assistance.  Contributing Editor Clive Thompson mentions the 1984 Benjamin Bloom metastudy that measured the effectiveness of one-on-one tutoring versus general classroom instruction (two standard deviations more effective for one-on-one instruction).  Obviously, schools cannot afford to teach everyone one-on-one but technology is capable of assisting teachers and students to improve learning outcomes.  What prompted Khan to record his videos was the discovery that viewing videos over and over again in private is less embarrassing for the student than admitting in a one-on-one session that they still don’t understand the material.  Judging from the comments posted by students on our Youtube videos, Khan’s discovery is on track.

Based on the increasing frequency of its use in the classroom, technology continues to advance at a pace faster than the implementation capabilities of many of America’s K-12 schools, colleges, and universities.  At the same time, there are a number of educational innovators who are willing to experiment.  As Clayton Christensen points out in Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns, technology will ultimately provide educators with the ability to teach students with multiple learning modalities the intended lessons without impeding the highly talented individuals from learning more.  It is my hope that few institutions and regulators impede the innovation process.  (To read my review of Christensen’s Disrupting Class, see my August 2008 blog article.)

In an article in The Chronicle of Higher Education, I read about the eduMOOC 2011 being hosted by the University of Illinois at Springfield, but at the time of Professor Couros’ keynote address, the course had not started.  However, Couros stimulated my interest in MOOCs by inviting all 900 conference participants to register for a MOOC at his university entitled EC&I 831: Social Media and Education.  According to Couros, the MOOC is free unless you want to take it for academic credit AND the course is dependent upon having the non-credit-seeking students attend.  I attempted to register immediately for Couros’ course, but registrations are closed until August.

Meanwhile, I conducted a little research on MOOCs.  Probably some of the best information can be obtained from YouTube videos assembled by Dave Cormier and his associates at the University of Prince Edward Island.  In “What is a MOOC?,” Cormier argues that a MOOC is a response to a world with information overload.  It is a course with facilitators, materials, and participants.  It is “an event in which people who care about a topic get together to talk about it.”  Participants make connections between ideas, materials, and the facilitators and participants.  The course is part of a way of building learning by creating networks that enable the participants to increase their lifelong learning.  Cormier’s “Success in a MOOC” video provides five key points for participants in a MOOC to keep in mind.  My favorite is the last one, focus.  Given that the idea of the MOOC, according to Cormier, is to facilitate a learning network in a world with information overload, it seems that participating in a MOOC with as many as 3,000 participants might contribute to that overload without a specific focus by the participant.

While I have not yet participated in a MOOC, the concept and the possibilities stimulate many ideas.  Formal online learning has enabled universities like APUS to bring together faculty with theoretical and practical experience and students who either have an interest in a field of study or practical experience in that field or profession.  Distance is not an issue.  MOOCs seize on the advantages of technology, the internet, and social media.  For a MOOC to be successful, the facilitators want as many knowledgeable people as possible to facilitate and participate.   My guess is that Alec Couros invites every participant at every conference he attends to sign up for EC&I 831.  While the conversion rate isn’t as important as it might be if you paid for advertising, the level of enthusiasm for the participants will undoubtedly be high given the topic and the currency of the material.

I can see the possibilities for MOOCs to expand beyond higher education to include associations, clubs, corporations, municipalities, etc.  If the concept is to provide an “event” to discuss a topic in which people get together and talk in an instructional way, the opportunities abound for learning, networking, and collaboration with people with the same interests.  As I mentioned earlier, I intend to enroll in EC&I 831 but I might take a peek at the eduMOOC 2011 course as well.  It appears that enrollment is still open even though the course has begun.  Let me know if you have experience with a MOOC as a facilitator or as a participant.

Regardless of the speaker or panel topic, if there was an underlying theme, it was “America’s education system is broken.  There are many good ideas.  If we don’t implement them soon, our nation will suffer.”  Whether it was James Shelton, Assistant Deputy Secretary for Innovation and Improvement, US Department of Education; Michael Crow, President of Arizona State University; Craig Barrett, retired CEO of Intel Corporation; or Joel Klein, EVP at News Corp and former Chancellor of the New York City Department of Education; all of them delivered the message that we need to reform our education system.  Dr. Crow talked about how the taxpayers of Arizona are paying twice for inadequately prepared high school graduates who have to take remedial math and reading courses when they matriculate in Arizona’s colleges.  Dr. Barrett listed the many policy studies beginning with A Nation at Risk: The Imperative for Educational Reform that identified the problems in our education system and yet little progress has been made.  Joel Klein said that the perverse incentives with K-12 leave little reason for striving for excellence in teaching and learning.

Despite the big issues that need to be solved, I think this nation has the ability to solve many of these problems.  I left the conference committed to not just focusing on higher education issues, but to see if there are ways that members of our institution can contribute to K-12 innovations and improvements as well.  We have reached the stage where it’s no longer appropriate to say that the problems are someone else’s.  Reforming education is all of our responsibilities and cooperation is needed if we want to improve the lives of the generations behind us.

In this report, Christensen and his co-authors (hereafter abbreviated as Christensen) discuss the potential for online education to be a disruptive influence on higher education with a total cost of education per student 40 percent less than the traditional universities (when you combine the state and federal subsidies with the cost of tuition). 

Probably the most relevant parts of Christensen’s paper are the recommendations at the back for policymakers and traditional universities.   Christensen says that state and federal officials must “honestly ask and answer” two questions.  The first question is “is the traditional universities’ business model sustainable?”  Christensen believes that there are few traditional universities that can answer yes to this question, particularly given the evidence that online education represents a scalable disruptive technology.  The second question is “is the primary stewardship to facilitate the best possible postsecondary education and training for the people in their state or whether they are appointed to be caretakers of the specific institutions that have historically provided higher education.”  If the answer is the former, then officials must include the disrupters in their partnership to ensure that as many as possible receive higher education.  If the answer is the latter, then low cost universities must be framed as “competitors and enemies.”

Christensen recommends that policymakers must remove the barriers to allowing low cost disruptors to gain share and cites Indiana’s partnership with Western Governors University that comes at no cost to the state because Western Governors is self-funded on tuition alone.  He and his co-authors also recommend that policymakers should encourage the move toward competency-based and next-generation learning models and not focus on traditional inputs such as seat time that lock in the traditional measure of a credit hour.  Christensen also states that we need to move beyond measuring degree attainment as a standard of achievement.  He states that focusing policy on degree attainment versus learning will have the impact of deflating the value of a degree and force people to focus more time and money on achieving advanced degrees which is not necessarily in the country’s best interest.

Christensen states that accreditation is a barrier but also states that it is not productive to fight accrediting bodies.  Instead, he recommends finding pathways around accreditation barriers.  As president of an institution that has worked hard to earn our accreditation, I am not sure that I agree with all of his recommendations with regards to accreditation but also understand why disrupters who have not achieved accreditation view it as a barrier.  I believe that accrediting bodies are an easy target when policymakers and disrupters choose not to understand the bigger picture, particularly when the accrediting bodies are not always transparent about their processes and policies.

The federal financial aid system is complex and many researchers avoid writing about it in great detail, choosing to focus on the macro issues instead.  Christensen and his co-authors not only state that the “all-or-nothing access to federal funds for institutions does not compel students to make rational quality-cost trade-offs” but they recommend an alternative system that would provide access to funding based on quality and student satisfaction measures relative to cost.  They call their new system the Quality-Value (QV) Index and propose measuring four items:  job placement, increase in graduates’ earnings relative to the institution’s tuition cost, whether alumni would choose to repeat the experience, and whether students are able to repay their loans.  Colleges would have access to these new funds based on a sliding scale relative to the QV Index.  A ranking in the top 25 percent would allow colleges to draw 100 percent of their revenue from Title IV programs, ranking between 50 and 75 would allow them to draw 90 percent from Title IV, a ranking between 25-50 would allow them to draw 75 percent, and a ranking between 0-25 would allow them to draw 50 percent from Title IV.  I find this proposed system much more creative than the proposed gainful employment regulations and much more appropriate to implement across the board in higher education regardless of the sector.  The only metric that I would alter would be the cohort default rate as currently measured since it measures repayment over three years versus looking at the higher percentage of loans that are eventually repaid and looks at overall defaults with no weighting on the dollars involved.

As mentioned earlier, Christensen provides recommendations for traditional university leaders as well as online university leaders.  First, Christensen recommends that the correct business model must be applied for the task.  He states that online universities are organized to optimize the flow of students rather than the faculty’s ability to do their research.  The authors also recommend that traditional universities develop a strategy of focus and to choose in what area they will be excellent, thus reducing complexity that allows a reduction in costs.

Lastly, Christensen and his co-authors recommend that administrators at traditional universities frame online learning as a long-term innovation that will allow them to use it to disrupt the traditional classroom experience.  Peer-to-peer teaching employed in many asynchronous online classes allows for students to learn more deeply because they have to adapt the material to fit their individual experiences and cognitive abilities.

The authors state that their intention was not to study higher education as a whole but to examine the industry’s challenges as “problems of managing innovation effectively.”  I think that their lens is a worthy examination that policymakers should consider when looking at the funding challenges that are occurring in many states.  Higher education is complex, but as the authors point out, complexity increases costs and a focus on teaching and outcomes can point the way to a reduction in costs allowing for a more affordable tuition for students.

Student retention has been an issue in higher education since the late 1800’s.  Some of the early research in the area began in the 1930’s but the volume of research studies increased substantially in the 1960’s through the present era.  Early research focused on psychological reasons for students to drop out of college but most of the literature since the late 1970’s have focused on sociological issues.

While there are many significant contributors to the research of student retention (William Spady, Alexander Astin,  Vincent Tinto, John M. Braxton, George Kuh, Ernest Pascarella, etc.), Vincent Tinto’s Leaving College: Rethinking the Causes and Cures of Student Attrition provides a fairly thorough overview of many research studies (note:  the second edition of this book was published in 1994 and new copies are difficult to find).

Tinto is given credit for developing the first theoretical construct of predicting student retention.  Three major areas of his theory involve the importance of the background characteristics of college students, the social integration of students with their college, and the academic integration of students with their professors and programs.  Subsequent research studies have focused on some of these areas and/or attempted to prove or disprove the original construct.  Colleges and universities use some of the studies as the basis for their internal retention research or external explanations of their graduation rate.

Continually, studies contribute to the theory that background characteristics of students are most influential for their persistence in college.  Among the data included in background characteristics studies are SAT and ACT scores, high school Grade Point Average, educational background of parents, and socioeconomic status of the student’s family.  Students with above average profiles in all of these areas usually graduate from college while students with profiles below the averages are less likely to attend or graduate from college.

At American Military University (AMU) and American Public University (APU), our students are primarily working adults with an average age of 30.  While there were notable studies of student retention at adult-serving institutions, I found very few that studied persistence at online universities or studied students who completed their programs entirely online.  While we knew the relative percentage of our students who graduate, we had not analyzed our student database for characteristics that may be significant indicators for a student’s graduation success.

Whenever institutions examine student retention, the analysis has to include the outcomes for students over a certain period of time.  Given that graduate students have already obtained an undergraduate degree, we eliminated them from the analysis.  We also needed to cover a reasonable period of time that would allow students to graduate, remain active, or disenroll from school.  We decided to examine statistics from approximately 20,500 students who were pursuing an undergraduate degree and who completed at least one course in 2007.  The students were grouped into three groups based on their academic standing as of December 31, 2009.  Those groupings were:  students who graduated, students who were still actively taking at least one course per year, and students who had disenrolled as of the end of 2009.

The analysis was fruitful in that it provided me with results that I could convey to our executive team for future studies and continued analysis.  One important finding was that the average length of time it took a student from that group to earn a bachelor’s degree at AMU or APU was 6.7 years.  We already knew that most of our students were engaged full-time with their military or civilian careers, so the length of time to complete a four-year degree would take longer than someone who was enrolled as a full-time student.  However, more than 85 percent of our students transfer in academic credits from a previously attended institution or from workplace training where the learning had been evaluated for academic credit.  Factoring in the average number of credit hours transferred in to our institution with the average number of courses taken in a year, the study results indicate that many successful adult students complete their academic journey over a period of time approaching 10 years.  That 10-year period may be longer if career or family obligations interrupt the flow of taking classes.

We utilized a forward regression model to determine if there were independent variables that might predict whether an individual student would disenroll from either AMU or APU.   It was not all too surprising that students from the group who transferred no credits were most likely to disenroll (our paper was listed as 31084 and will be available as part of the Printed Proceedings book available at www.digital-factory.net/aace).  Given that 121 credit hours (40 courses) are required for most bachelor’s programs and the average student at AMU/APU takes 12 credits (4 courses) per year, a 10-year commitment may be easier to walk away from in the early stages than after a substantial amount of credits have been earned.  Supporting this regression analysis outcome is the fact that 40.3 percent of the students in the group who disenrolled did so after taking only 2 classes and 65.3 percent disenrolled after taking 4 or fewer classes.  Decreasing the percentage of students who disenroll early has been a focus at American Public University System (APUS) for nearly a decade and continues.  Many on-ground programs have similar issues with new students leaving early and have programs dedicated to the first year student experience in order to improve the student experience and more fully integrate them into the social and academic culture.  Social and academic integration in online learning environments is more difficult, but not impossible and we will continue to investigate ways in which we can meet the needs of new students in their first classes.

Academic institutions like APUS that participate in the Federal Student Aid program are required to submit vast quantities of student data to the National Center for Education Statistics (NCES) through the Institutional Postsecondary Education Data System (IPEDS).  That data is made available to the public and to researchers.  The Department of Education reports an institution’s official graduate rate as the number of first-time, full-time freshmen students who graduate within 150 percent of the normal time to complete a degree program (three years for a two year degree and six years for a four year degree).  If an institution does not have any first-time, full-time freshmen, it will have a graduation rate of zero.  Many institutions that serve a large population of adult students will have very low numbers of first-time, full-time freshmen.  A useful source of data to determine the relative percentage of part-time students at an institution is to divide the FTE (full-time equivalent) students reported in a given year by the unduplicated headcount reported by the institution for the same year.  The lower the decimal calculated, the higher the number of part-time students will be who attend that institution.  If the majority of an institution’s students are part-time, the Department collects data on completions, but does not collect data about the length of time it took to complete a degree or the year in which the students who completed a degree matriculated at the institution.

Enrollments at colleges and universities that offer online programs have soared in recent years for many reasons, one of which is the convenience of working online from work or home versus commuting to a physical location for a class that may be held at times inconvenient for a working adult.  However, the consumer-friendly data that is collected by NCES relates to students who plan to be first-time, full-time freshmen and does not reflect the success rates of adult-students who matriculate and graduate from these programs.  Given that the department tracks unduplicated student headcounts and completions each year, adding two fields relating to unduplicated new students and drops for each year would provide a cohort-tracking system that could provide an aggregate completion/graduation rate for part-time students.  Many institutions serving part-time students allow seven years for those students to complete a two-year degree and up to ten years for a four-year degree.  The pace at which students complete those degrees varies based upon professional and family requirements that may conflict at times with the number of courses that a student can take.  One of the desired outcomes of our research was to provide a benchmark for similar studies as well as a suggested guideline for tracking persistence in adult-serving online degree programs.  As more and more adults return to college to complete their degrees online, finding a consistent system for measuring and reporting their progress will become more important.